I attended USAC training for applicants in Los Angeles on November 18th 2016 and have a few things to report.
Lowest Corresponding Price Rule
At the training course I attended, a USAC representative said that a service provider must offer the Lowest Corresponding Price (LCP) to a school, even if that school is already under contract with a service provider. Meaning the LCP rule “trumps” the contract. The Lowest Corresponding Price has to be offered to E-rate customers, if that price is offered to a similarly situated entity. The school does not need to ask for the lower price or negotiate. It is the obligation of the service provider to provide the LCP, without prompting or a request from the school.
Schools under Contract
When you are under contract with a service provider, if the contract allows “voluntary renewals” then the school will be able to renew the contract on expiration of the initial term. The renewal will mean you don’t need to issue another E-rate form 470. USAC stated they don’t define a maximum contract term (meaning they don’t define how many times you can renew) but USAC did say the contract cannot have an infinite term). I think 10 years is a good total term length of a contract. Thus, the initial term could be 3 years, with voluntary renewals possible, up to a maximum contract term, including renewals of 10 years. If you want the option of renewing the contract at term expiration make sure the contract states this. (I am sure a service provider would have no issue in putting in “voluntary renewal” language, since this increases the chance of a school remaining with the service provider).
Requesting Bandwidth on your E-rate Form 470
It is very important how you make your bandwidth request on your E-rate form 470. How you request bandwidth on the E-rate form 470 will determine whether you will be able to later upgrade your bandwidth during the E-rate funding year, or upgrade your bandwidth in a later funding year if you are under contract with a service provider.
In summary, you can only upgrade to a bandwidth that you had originally requested on your E-rate Form 470. For example, lets assume you only request 100Mb/s of Internet and Transport bundled on your Form 470. If during the E-rate funding year, you would like to purchase more bandwidth, e.g. 200Mb/s, you will not be able to, since you did not request 200Mb/s on your original form 470. The best approach to requesting bandwidth, is to request pricing for a range of bandwidth’s, including bandwidth levels between the minimum and maximum.
For example, you can request 10Mb/s minimum and 25Gb/s maximum. In the narrative section of the form 470, when you have a new service request, you can provide the additional bandwidth levels you want pricing on. For example, you could state “Please provide pricing for the following bandwidth levels: 10Mb/s, 20Mb/s, 50Mb/s, 100Mb/s, 250Mb/s, 500Mb/s, 1Gb/s, 2Gb/s, 4Gb/s, 10Gb/s, 15Gb/s 25Gb/s.” In other words, state the levels you think you may need to upgrade to.
When you select a service provider, you may enter into a multi year contract with that service provider. You should make sure the contract allows you to upgrade bandwidth during the contract term, if this is what you want. The bandwidth you can upgrade to will be allowed per the language in the contract (make sure of this) and also match the bandwidth request in the original form 470.
If you have any questions on this, please contact me at the contact info given on this website.
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