California Educational Data Processing Association
DataBus - Vol. 38, No. 2
February-March, 1998
E-rate Update

Program: As application deadline approaches, many questions remain. Here is a summary and interpretation of some of the issues surrounding the Act.

Greg Lindner, Yolo County Superintendent of Schools

A number of events have occurred recently regarding the Universal Service program and E-rate. This article will summarize some of the more important issues as I see them. While most of us in education have heard quite a bit about E-rate by now, the impact of how it will effect our organizations and our sanity is not yet clear. The Act, in its original form was about 800 pages long. Subsequent Orders on the act have been from 20 to 300 pages long. It has been quite an ordeal staying on top of the issues and sorting through them. I must say, however, in California we are doing a remarkable job. Several key folks in the state have taken a lead on this important program, studied the issues and spent a considerable amount of time on them so we can all benefit. Most notable, has been Jackie Lamb of the California Department of Education. Jackie, along with Way Jane Wong, has been instrumental assisting California's K-12 schools with the E-rate program. Folks such as Jackie, Skip Sharp of San Diego County Office of Education, and myself have made such an effort because we see the huge benefits this program can have for our students. It has been a lot of work but we firmly believe it will pay off in the long run.

Jackie, Skip, and myself recently participated in our second Satellite Broadcast on the E-rate program. San Diego COE was our host and from all we have heard it went very well. What we did learn, however, was that one hour was not enough time to answer everyone's questions. Still, the satellite broadcast was a much more economical way of dispersing the information statewide. We are fortunate to have access to the SLC and to Deb Kriete, General Counsel to the Schools and Libraries Corporation. Jackie has made some very good contacts at the SLC that will benefit us all in California. Continued efforts from CCSESA's (California County Superintendents Educational Services Association) Technology and Telecommunications Steering Committee have also assisted our schools in getting the most out of the E-rate program. These groups as well as CEDPA (California Educational Data Processing Association) have put us far ahead of other states in being ready to proactively participate in the E-rate program. CEDPA's listserve has been extremely beneficial to well over a hundred technology coordinators and vendors across the state in terms of disseminating information as well as discussing certain aspects of the program.

As stated, the most recent event (as of this writing) that has occurred has been the Fourth Order on Reconsideration. These "orders" were always confusing to me until I spent the time to understand (or try to) how they work. Specifically, Congress passed the Telecommunications Act of 1996. This was a major re-write to the Telecommunications Act of 1934. Since the Act was passed, the FCC has had the task of interpreting it and implementing the rules that are to be followed based on the Act. These rules are titled, "Orders". Since the FCC issued their original Order on the Telecommunications Act, on May 8, 1996, they have issued several follow-up Orders - or as I call them "clean-up orders" that try to clarify issues that the public, vendors, and others have raised. This article concentrates on the Fourth Order on Reconsideration. Yes, there have been three others! Basically it means they have established additional rules or clarifications on issues they were reconsidering due to public input or their own motions.

This article focuses on the following highlights of the Fourth Order on Reconsideration:

The Fourth Order further clarified issues regarding Required School Documentation. The FCC re-asserted that schools must provide a summary description of services requested; conduct an assessment to confirm required components available for implementation; certify they meet eligibility requirements and certify they have or will have an approved technology plan. This last issue is important for those schools and or county offices that still have not yet received approval of their plans. The FCC has held its position though that prior to funding the technology plan must have been approved.

The FCC further went on to clarify that formal posting of RFP on SLC site is not required.

A Formal RFP is not required by SLC, however, may be required by local or state bidding rules.

Regarding State Networks, the FCC stated that a state network may be a service provider for Internet access or internal connections and receive reimbursement from SLC. However, a state network can not be both a service provider and an applicant for discount on the same items. Additionally a state network is NOT eligible to receive reimbursements for the provision of telecommunications services because it is not a telecommunications carrier as defined by law. This is significant in terms of our usage in California of CALNET. As I understand the information, CALNET however may seek discounts and pass them along to schools.

Another significant issue for schools was the FCC's clarification of what they deem internal connections. They defined them in relation to LANs and WANs as "Connections between multiple instructional buildings are considered 'internal' and covered." However, they went on to say that the buildings must be on the same campus and not pass a public right of way (Public Street). This is rather significant, as you will see later. The FCC also clarified the issue of non-instructional buildings receiving support. Non-instructional buildings are generally NOT covered unless those internal connections are essential for the effective transport of information to an instructional building. Discounts would be available for example for routers and hubs in a school district office if individual schools were connected to the Internet through the district office. Similarly, routers tying a school LAN together in the school office should result in the school office internal connections being covered. The M&O shop or Transportation Department would most likely not be covered.

Regarding Shared Services, the FCC stated that shared services can use aggregate discount. For more detail on this, call the SLC for determination of shared services. It may cover more than you think. The Act states that individual schools must get their associated discount rate; however, the SLC and the Commission have stated "...when it is not unreasonable burdensome to do so." Ask if you are unsure!

As I have done seminars across the state and spoken with people on the phone regarding the E-rate program, I am often asked about how to compute discounts for shared services. The SLC and the FCC have recently defined this, I believe in more clarity.

To determine the discount rate for shared services an entity would do the following:

Another issue that I have received many questions on surrounds the existing contract issue. The FCC heard many comments on this subject and altered their earlier rules to state the following: Regarding Master Contracts - which are significant to us in California, the FCC stated: Several of us working on the E-rate program on a daily basis have had discussions on the CMAS contracts and how they relate to the Fourth Order. We are currently seeking a written determination on them from the SLC. Once we have this issue settled, the information will be posted on CDE's web site at http://www.cde.ca.gov/ftpbranch/retdiv/k12/e-rate/ and also disseminated on the CEDPA Listserve and Yolo COE's web page.

The biggest shock to most of us in the Fourth Order on Reconsideration was the language on WANs. The FCC's position is listed below:

The issue of coverage on leasing from non telecommunications carrier for those services not offered by telecommunications carriers such as microwave, satellite, and wireless connectivity is currently being reviewed. This is a very significant issue to those schools planning to use microwave to connect their schools. Something we were planning to do at Yolo. At first glance, the simple solution was to lease the WAN from our local Telecommunications Provider. The problem is, however, they do not offer wireless services! They currently are testing them, but they do not expect an available product for at least six months. CEDPA and others are currently doing what we can to identify language in the Act that would allow us to make an argument to have these services be available from a non-common carrier. Without a wireless solution, many of our small schools and rural schools will have to settle for less than optimal or affordable solutions.

An example of the importance of this is that with a Microwave solution, we are able to implement a 10mb connection to our schools; that's the same speed as if they were in the office on our LAN (technically it is just an extension of our LAN and not a WAN). We can do this for less than $25,000 fully designed, installed and working. With an 80% discount, we can implement the solution for about $5000 - which is a one-time cost. Obviously there will be ongoing maintenance costs but they will be fairly insignificant when compared to the cost of installation and monthly recurring costs associated with leased line connections. Additionally, in some areas of the state, Microwave is the only solution because the local telco does not have digital service. So, as you can see this issue is of particular importance to K-12 schools in California.

The FCC further clarified the rules and instructions regarding the Applications as shown below:

They also clarified the issue of Tariffs vs. Contracts. This has been a issue that keeps popping up lately. Regarding minor modifications to Contracts they stated: Regarding New Schools: The SLC also expanded upon the list of Alternative federally approved poverty mechanisms. Examples of these are: There still are a number of pressing issues that need to be discussed and advocated for with the E-rate program. The issue of WANs is of significant importance to all of us. No less significant is the issue of the California Teleconnect Fund and how it works with the E-rate program. The FCC has specifically stated that schools should be able to take advantage of the E-rate program first then also be able to participate in any State programs. The CPUC is currently looking into this and has stated a position that schools should only be able to participate in one program or the other. We have challenged this position and will be presenting our case on February 4, 1998 to the CPUC. CTF provides discounts on "certain" telecommunication services of 50 percent. Another issue that has raised a number of questions is the issue of payment. How are schools going to handle the situation where a contract for new services is signed say in mid February, but the discounts do not show up until May or June? How will the vendor re-act to that? Will we need to pay in full then be rebated or will the vendor only bill our portion and wait until the government pays them? As you can see this is something the vendors obviously would like resolved as much as we do.

The final issue that has not gotten much press locally or statewide is the issue of public opinion on the E-rate program. Many East Coast papers have been writing articles denouncing the program. Many US Senators are also starting to do the same. What has been, in my opinion, lacking, is significant support from K12 stating how much we are looking forward to the program and how much we need the program. We really must get on the ball and do a better job contacting our Senators and legislatures and letting them know how much we want this program. I know more than most about the problems the program has, but I also know those will be worked out. We can not risk sitting idly by on the sidelines and letting this go away because of inactivity. So, I encourage you to write and call you legislatures and your lobbyists if you have them and let them know we want this program! Encourage your Superintendents and your professional organizations to do the same. This program has the potential to positively change the lives of our students but only if we actively participate before it's too late.

Finally, I would like to wrap this up with some URLs (Universal resource locator) with information you can turn to for additional information and help.

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