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					E-rate – What is it?




     Presented by:
      Joe Melloy
     April 19, 2007
                             My Background
               Joseph P. Melloy, Sr.
   33 years with IBM
       Technical marketing, systems engineering, management
      Higher Education Technology Consultant
         1981-1993

   President, Technology Planning Group,Inc
      1993 to the present

      Higher education clients – Mid-Atlantic area

            Delaware, Virginia, Maryland, Pennsylvania, New Jersey
       K-12 clients – Pennsylvania and Delaware
            Recent activities: Vision 2015 Working Group
                 Technology plans – charter schools
       E-Rate expertise – Pennsylvania and Delaware

                                                                      2
     Contact Information

   joemelloy@comcast.net
   Cell 302-547-8517




                            3
                      Agenda
   Background of the E-Rate
   What products and services are eligible for
    discounts?
   How is the discount determined?
   When is the next E-Rate process “Year”?
   What is the process?
   HOW HAS DELAWARE DONE IN
    ACQUIRING E-RATE FUNDS?
   What is my school or district’s plan to secure
    E-Rate funding for educational technology?

                                                     4
               What is E-rate?
   Telecommunications Act of 1996 established
    “Universal Service Discount Program for Schools
    and Libraries”
   Annual $2.25 billion program
   Provides 20-90% discounts on
    telecommunications services, Internet access,
    and internal connections
   Fund made up from charges on your phone bills
   Most public libraries, public and private K-12
    schools, including charters and vo-techs are
    eligible
                                                  5
 How Has Delaware Done?

Over ten years
of the E-Rate
program…..
                          6
  The Answer:


NOT   WELL!

                7
Last Place Among Fifty States for Each
   of the Ten Years of the Program
   Source: Article: “E-Rate Discount Totals Over 10
    Years’
      Source www.nctet.org

   Total of Ten years of Discounts:
       Delaware $11,044,978.
       Similar population states:
          New Hampshire $15,875,210
          South Dakota  $42,258,467.
          Rhode Island  $58,958,867.
          North Dakota  $32,628,670

                                                       8
      DE Comparison to Nearby
             States
   NORMALIZE 10 years of data to $ PER
    STUDENT / PER YEAR COMPARISON
   State E-Rate $ #Students $ / Student/ Yr
   MD $152mm        865,561        $17.54
   PA $629mm       1,828,089       $34.42
   NJ $436mm       1,393,347       $31.28
   DE $11mm         116,342        $ 9.50


                                           9
New DE E-Rate Strategy Needed

   First, Let’s Talk About the Details of
    the E-Rate………

   Strategy will evolve by the end of this
    presentation after we look at

   THE PROCESS……..
                                             10
        Who Administers E-rate?*
   FCC
       Created program and its rules
   USAC
       Universal Services Administrative Company
       Created by FCC to run E-rate and other
        universal service programs
       Pays invoices
   SLD
       Schools and Libraries Division
       Entity within USAC that runs E-rate
       Makes no policy decisions
                                                    11
           E-Rate Funds

   Who contributes the funds
    that are set aside to fund
    technology for schools in
    schools and libraries?


                                 12
         The Answer:

We  all do!
When we pay our
 telephone bills….
  Universal   Access Charge

                               13
    Public Service Commision Report

   Delaware PSC, FCC hearing, June 14, 2005
   “Delaware end-users pay 10.2% surcharge on
    their telephone bills”.
   “In 2005, Delawareans will pay $21 million in
    this surcharge and will receive back only
    $685,000 in federal E-Rate funds. Something
    must be done to limit the size of this fund.”
   Source:
       Bruce Burcat, Executive Director
       Delaware Public Service Commission


                                                    14
     How are they distributed?
1.   WE APPLY FOR THEM.
2.   OUR APPLICATIONS ARE APPROVED,
     BASED ON THE FACTS WE PROVIDE.
3.   THE DISCOUNTS ARE DETERMINED BY
     THE ADMINISTRATIVE ENTITY IN
     WASHINGTON – USAC.
4.   THE APPROVED SERVICES ARE
     PROVIDED AT THE DISCOUNTED RATE.


                                        15
        Why Are We Talking About E-
                  Rate?
   DE schools and libraries can apply
    alongside 30,000 other schools and
    libraries in U.S
       You want to make sure you know how
        to complete forms, etc., so you can
        get the funding you’re entitled to.
       Work with a qualified consultant
        and/or utilize in-house staff to insure
        accuracy and legitimacy of all
        requests.
                                                  16
               Fair Warning!
    E-rate is not an easy process
    Only for the strong willed and determined
    Long process, a lot of paperwork, some
    frustration
    Patience is needed, in addition to
    diligence in reading correspondence
    Rewards can be great
    Never ever try to cheat the program

                                             17
     Resources to Remember*
   SLD web site:
       www.sl.universalservice.org
   SLD CSB: 888-203-8100
   Or Google search “SLC E-Rate”
   Other state E-Rate websites



                                     18
                         Applicants
   Must use E-rate Entity Number in order to participate
      One for every building in your district or library

      All applicants already have unless it’s a new building

   Must have FCC Registration Number (FCCRN)*
      Just for billed entity

      All applicants should have obtained in Yr 7

   Must have NCES code (schools) or FSCS (libraries)
      Listed on PA E-rate website under Helpful Documents

      Leave blank if none exists




                                                                19
               Service Providers*
   Must obtain Service Provider Identification
    Number in order to participate (9 digit #)
       Info on SLD web site under Vendor Area
       Service Provider/SPIN Search on SLD web site
   Not required to pay into Fund to get SPIN
       Only telecom carriers must pay
   Only sign contracts with providers that have
    SPIN
   Providers should update contact info on Form
    498, Block 11                                      20
                    Funding Priorities
   Needed - demand exceeds cap of $2.25 billion
   Priority One: Telecommunications and Internet
    Access
       All approved-inside the window-likely to be
        funded
   Priority Two: Internal Connections & Basic
    Maintenance of IC
       Funds go first to neediest applicants (90%
        discount level), then to others in order of
        discount until funds are exhausted
            Year 1 -- funded to 70%
            Year 2 – all approved applications funded
            Year 3 – down to 82%
            Year 4 – down to 87%
            Year 5 – down to 81%
            Year 6 – down to 70% - significant rollover funds
            Year 7 – down to 81%
            Year 8, 9, 10 – approximately 86%                   21
              Funding Priorities
   What does this mean?
       Always apply for all telecommunications
        services and Internet access – you’ll get
        those discounts.
       Make judgement call on internal
        connections depending on discount level
        and time available to complete
        application

                                                22
Exactly what services ARE and
       are NOT eligible?

   Current and Future Services
     You Use or Plan to Use
         Eligible Telecom Services
   MUST be provided by regulated
    telecommunications carrier
   Basic Telecom Services
       Local, long distance & voice mail
   Advanced Telecom Services
       T-1, ATM, Frame Relay, ISDN, lit fiber, etc.
   Satellite services and leased dishes
   Voice over IP (Internet Protocol) -
       ADDED IN 2007!

                                                       24
        E-Rate Discount Checklist
   Source:
       www.universalservice.org/
            “Eligible Services List”
                  Note page number in first column
            IMPORTANT:
              “Check conditions of Eligibility of
               each service or product”
               Can be done at school, district or consortium
                level.



                                                            25
Eligible Telecom Services, cont.
   Wireless Services
      Cellular service – all staff eligible

      Paging service

   Calling cards
      Not pre-paid cards

   Centrex, custom calling features
   Installation fees OK
   Can be installed before funding year begins so
    services are ready by July 1



                                                     26
          Ineligible Telecom Services

   900 Calls
   Payphones
   Cost of not-publishing phone numbers
   Cost of additional directory listings
   End user equipment (phones, beepers, cell
    phones, fax machines, etc.)




                                                27
    Eligible-Tariffed Services/MTM*
   Services that are purchased mainly from a phone
    company, such as T1
    OR
   Monthly services such as cell or Internet Access
   For which no contract is signed
   Must competitively bid every year, regardless of
    competition in your area for those services




                                                       28
              Fiber Networks*

   Dark Fiber (unlit) is not eligible
   Lit Fiber is eligible … IF
       Modulating electronics are bundled with
        the lease cost of the fiber
       Applicant will never own fiber
       Applicant cost allocates any lease of
        fiber that isn’t being used in that
        funding year.

                                              29
                 Internet Access
   Eligible:                    Ineligible:
       Subscription fee to          Filtering
        ISP
                                     Any remote access
       E-mail
                                      outside school
       Firewall fees                 property to internet
       Webhosting
                                     Blackberry services
       Internet bandwidth            presumed ineligible




                                                         30
             On-premise, Priority 1
                 Equipment*
   Permitted if bundled from telco or
    ISP
   Must certify:
       No applicant ownership – ever
       No exclusive use
       LAN functions without use of equipment
       Service provider maintains equipment
           Not applicant

                                             31
    Eligible Internal Connections
                       System operating
 Network and             software
                         Wireless Access Points
    phone wiring         Private branch
   Routers               exchange (PBXs)
   Switches             Firewalls
   Hubs                 Anything needed for
                          transport – not end
   Network servers       user devices
   Video codecs         Installation of eligible
                          internal connections
                         “Basic” Maintenance
                          contracts on eligible
                          internal connections
                            basic maintenance 32
Ineligible Internal Connections
   Personal computers    Network management s/w
   FAX machines          Routers used for remote
                             access
   Asbestos removal
                            Curriculum software
   Cameras                 Phones, beepers
   Electrical wiring       Owned WANs
   Teacher training        Salaries of SD staff to install
                             or maintain network or
                             components
                            Any equipment used for
                             remote access to network or
                             Internet
                                                          33
              Gotcha!
    Words to Never Use with SLC
   2-way Radios/walkie-        Cellular phones
    talkie (direct connect      Management
    OK as a cell service)
   Filtering                   Redundancy
   Network monitoring          Helpdesk
   Directory                   24 hour technical
    advertising/listings         support
                                Insurance policies
                                Remote access

                                                      34
Application process at a Glance*




                                   35
    UPCOMING: Year 11 - Details
   For services rendered 7/1/2008 -
    6/30/2009
   Application process begins Nov., 2007
       Five months away…..ninety day exercise.
       Write tech plan now
       Review Form 470 requirements
       File 471 when window opens (normally
        beginning of November)
            Window will close first week in February, 2008
   Must be inside window to be funded for 08-09

                                                              36
      You Must Have a Technology
                Plan!*
   Five SLC technology plan criteria
           Goals and Strategies for using technology
           Needs Assessment
           Professional Development
           Budget – including sources of funding
           Evaluation
   Must align with 470 request for services
   Must be “written” before 470 is filed
   Must cover full 12 months of NEXT funding year
   Plan must be approved by DCET (Denise Allen)




                                                        37
        Technology Plans, cont.
   “Vendors” cannot write or approve technology
    plans
   No tech plan required for basic phone service or
    long distance (includes cell and voice mail)
       Centrex is not basic phone service
   Be sure to include dates of tech plan!
   Get approval letter by July 1
       then Print/Maintain Approval Letter
   Tech plans approved for no more than 3 years
   Certify on 486 who approved plan
   Can amend technology plan if yours is not
    specific enough                            38
                Competitive Bidding

   Everyone must do it
       Even if no competition in your area
       Even if bidding under state law
       Must be done when signing any new contracts
       Must be done each year for all tariffed/MTM
        services
   Bidding on web site does not exempt you
    from bidding under state law
       Can be done simultaneously
       Only exception is if someone bid it for you

                                                      39
        Choosing the Winning Bid
   Applicant must to pick “most cost-effective bid”
   Cost doesn’t have to be only factor, but must be most
    heavily weighted factor
       For example, if you have 3 bid evaluation criteria, price
        must be at least 34% of total weight.
   Examples of other specified factors:
       Prior experience
       Personnel qualifications
       Technical excellence
       Management capability
       Cost of switching providers
       Etc.

                                                                    40
        Signing E-rate Contracts*
   Signing Contracts/Selecting Provider must be
    done before you submit 471
   Be careful not to make any decisions, sign
    anything or file any forms during 28 day waiting
    period.
   Contracts must be signed and dated by both
    parties
   Must sign contracts unless tariff or MTM service
       If selecting PEPPM, no contract needed, but you must
        be able to explain why you chose reseller A over
        reseller B
                                                           41
         Signing E-rate Contracts*
   List contract extensions and contract expiration
    dates
       These also must be listed in RFP or 470, Item 7b
   Include non-E-rate funding out clauses
   Separate internal connections/wiring portions of
    contracts for highest discount schools




                                                           42
           What is My Discount?*
   Two criteria make up discount:
       Poverty level - Federal School Lunches
       Location -rural classification




                                                 43
    Discount Matrix for Single
            School*
% of Students Eligible for
 School Lunch Program            Discounts
                             Urban           Rural

          <1%                20%         25%
        1-19%                40%         50%
        20-34%               50%         60%
        35-49%               60%         70%
        50-74%               80%         80%
       75-100%               90%             90%


                                                     44
          Alternative Measures to NSLP
                      Data*
   Goal: Discounts based on true eligibility – not
    participation.
   2 Ways to do this
       Take existing participation data and add to it
            Using sibling match
            Using existing family income data
       Conduct family income survey
            Must survey 100% of families. If 50% response rate,
             then OK to extrapolate the rest
            Maintain complete records
            Sample survey available*
            Valid for 2 years                                     45
Discount Calculations by Entity*
   Schools: Use straight matrix discount
   Districts: Use weighted average of schools’
    individual discounts
   Library: Use the total number of students
    eligible for NSLP in the school district in which
    the library is located divided by the total number
    of students in that school district, then use
    matrix discount
   Library System: Uses simple average of
    member libraries’ discounts
   Consortium: Uses simple average of members’
    discounts
                                                     46
 If You Are an Individual School*

          1             3          4              5                 6             7
    Name of School   Urban or    Total       # of Students     % Students      Discount
                      Rural       # of     Eligible for NSLP   Eligible for    % from
                      U or R    Students                          NSLP         Discount
                                                               Col. 5/Col. 4    Matrix



Oak Elementary        R         100             50             50%             80%

Always uses straight matrix discount for single schools.




                                                                                          47
                If You Are a School District*

District discounts are based on weighted average discounts,
based on individual school discounts.
               1                      3          4              5                 6            7                      8
        Name of School             Urban or    Total       # of Students     % Students     Discount         Weighted Product
                                    Rural       # of     Eligible for NSLP   Eligible for   % from     for Calculating Shared Discount
                                    U or R    Students                          NSLP        Discount           (Col. 4 x Col. 7)

Oak Elementary                       R        100            50              50%            80%                 80.00
Spruce Jr. High                      R        212            98              46%            70%                148.40
Elm High School                      R        566            273             48%            70%                396.20
 District Totals for calculating
 Weighted Average Discount                    878                                                              624.60
10c Weighted Average Discount % for Shared Services
(Col. 8 total divided by Col. 4 total. Round to nearest %)                                                      71%

                                                                                                                                   48
       If You are a Library Outlet/Branch
               or Library System*
                      1                                2               3              4                5              6               7              8
           Name of Eligible Entity              Entity Number and   Urban or   # of Students in       # of          % of        Discount from      Entity
                                                 FSCS of Library     Rural         District        Students       Students         Matrix        Number of
                                                                                                  Eligible for   Eligible for                      School
                                                                                                   NSLP in          NSLP                         District in
                                                                                                    District                                    which Library
                                                                                                                                                 is Located

Treetop Branch Library 123123                                               525
                                                                      U 987654321                   200           38%              60%          125246
Greenleaf Branch Library 123234                                       U     800                     130           16%              40%          125400
Acorn Branch Library     123122                                       U    1220                     350           29%              50%          125659
System Totals for calculating Shared Discount
10c Library Systems % (Col. 7
total divided by # of sites in Col. 1.                                                                                            50%




                                                                                                                                                   49
   If You Are a Consortium*

                           1                                                              4


                                                                               ENTITY DISCOUNT
          ELIGIBLE MEMBER ENTITIES
                                                                   Individual School: Discount from Worksheet A
Name of each individual school, school district and/or
                                                         School District: Weighted average discount calculated in Worksheet A
        library/library system in consortium                  Library System : Shared discount from Worksheet B



Treetop School District                                                               71%
Woodsville Library System                                                             67%
Forest Academy                                                                        60%
Totals for calculating Shared Discount                                               198%
10c Shared Discount %
(Col. 4 total divided by # of sites in Col. 1. Round                                  66%
to nearest %)




                                                                                                                                50
    Paying Non-Discounted Portion
   If your discount is 65%, you MUST have the
    ability to pay the remaining 35%
       Must have the nondiscounted portion in budget
   Many vendors will say they can get a “grant” for
    this amount – NOT PERMITTED




                                                        51
        How do YOU get E-rate $?
   Two choices
       Discounts on bills
       OR
       Reimbursement process
   Must select one or the other for entire year
   Try to determine choice in contract or prior
    to choosing service provider
   If you want discounted bills, call provider
    as soon as you are funded


                                                   52
         Document Retention*

   Rules now require all applicants to retain
    ALL E-rate and related documents for 5
    years from last day of service in a
    particular funding year
   If auditor visits in 4 years, and documents
    are missing, it will be the basis to recover
    all funding from that funding year

                                               53
       Documents to Retain*
   Tech plan and            Contracts signed by
    approval letter           both parties
   Consultant               NSLP documentation
    agreements               Budgets
   RFP and proof of         Purchase orders
    publication date         Packing slips
   All vendor               Asset or inventory
    correspondence            records
                             Installation records
   Winning and losing
    bids                     Invoices
                             Proof of payment to
   Professional              SLD
    development records
                                                 54
          Transfer of Equipment*
   E-rate funded equipment must remain at
    approved site for 3 full years after installation
   After which it may be moved to another eligible
    location, providing documentation is retained
    describing transfer
   If school or library closes, equipment may be
    moved to another entity, regardless of discount
       Must send letter to SLD outlining closing of school
        and transfer of equipment
       Must keep documentation regarding transfer for 5
        years

                                                              55
               E-rate Consultants
   Not a bad idea if you have complex application
   Be certain that the consultant:
       Provides training
       Is in constant communication with you
       Provides you with copies of all forms
       Provides you with periodic updates on your
        applications
       Does not sign your forms
       Does not have any relationships with vendors
   Sign Letter of Agency
                                                       56
               E-Rate Consultants
   Unique skill and experience required
   Best to work with the school or
    district
   Cost of Consultant? Depends:
       Fixed Price Contract
       Pay by the hour
       OR:
           Based on dollar savings in obtaining
            discounts for equipment, services, etc.
              Usually 25 to 30%!
                                                      57
          Future of E-rate - FCC
   New FCC Chairman, Kevin Martin
   Appears to be supportive of E-rate
   Congress will continue to evaluate
   DELAWARE –
       Public Service Commission unhappy
        that too little funds from Universal
        Access Charges are coming back to the
        state.
       State must seize the opportunity and go
        after E-Rate funds it’s entitled to!
                                             58
 WHO IS RESPONSIBLE?


WE   ALL ARE!

                       59
Follow-up: Interested in Proposal of
       Consulting Services?
 Send Letter of Intent of your
  E-Rate interest:
 Direct to:

     Joe Melloy, President
     Technology Planning Group, Inc.

     PO 149

     Montchanin, DE 19710

         OR:

       Email: joemelloy@comcast.net    60
    Thank You


Questions:


                61

				
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