E-Rate For BeginnersService Provider Edition

FY 2020-21

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@KelloggLLC @KelloggLLCKellogg & Sovereign Consulting, LLC

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Today at a Glance

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Introduction to KSLLC

Funding

E-Rate Basics

Acronyms & Terms

Q&A

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• E-Rate

• Debi Sovereign,*Owner

• Riley Harpole

• Christina Bailey*

• Rachel Botts

• Teagan Vick*

• Jennifer Williams

• Debi Sovereign,*Owner

• Shannon Tice

• Shar Dodoo

• RHC

Meet Your KSLLC TEAM• Alex Linam

• Mandy Wood*

• Daniela Yanez

• Cam Large

• Danny Christensen

• Adam Godwin

Nic Carlsson-CEO & Jane Kellogg-Founder

www.kelloggllc.com/account_managers_aspx*Certified E-Rate Management Professionals

KSLLC 2019-20 Filing

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RESOURCES

www.usac.org/sl

Before you Begin

Step 1 Obtain a SPIN

Step 2 Responding to Bids

Step 3 Winning the Bid

Step 4 Starting Services

Step 5 Invoicing

Before You're Done

www.kelloggllc.com

Service Provider Forms

E-Rate Bidding

Product Eligibility

Sales & Invoicing

Training

USAC EPC Portal

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Service providers are expected to KNOW their products’ E-rate eligibility:http://www.usac.org/sl/applicants/beforeyoubegin/eligible-services-list.aspx

General E-Rate Information

•Federal Communications Commission (FCC), an independent U.S. government agency, established and oversees the E-rate program.

•Universal Service Administrative Company (USAC), a not-for-profit, administers the E-rate program along with three other programs.

•Schools and Libraries Division (SLD) is the part of USAC with responsibility for E-rate.

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E-Rate Rules

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Congress directed the Federal Communications Commission (FCC) to establish the E-rate program in 1996

The FCC sets rules and policies through ordersPolicies are defined in the text of ordersAppeal Decisions

Universal Service Administrative Company – Schools & Libraries Division (USAC/SLD) develops procedures for specific actions, such as how to process applications

http://www.kelloggllc.com/fcc.aspx

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E-Rate Application Process

WWW.USAC.ORG/SL

www.kelloggllc.com 580.332.1444 10

http://www.usac.org/sl/service-providers/default.aspx

www.kelloggllc.com 580.332.1444 11

Request or Update a SPIN

FCC Form 498 – Service Provider Identification Number (SPIN) and General Contact Information Form• Original must be filed on paper

• Revisions can be done online (E-File System)

• Can be submitted by company officer or general contact

• Must be certified by company officer

• USAC Helpline: 1‐888‐641‐8722

• https://www.usac.org/cont/about/outreach/online-learning.aspx

www.kelloggllc.com 580.332.1444 12

E-rate Timeline

Commitments for E-rate are made by funding year (FY), which runs from July 1 through the following June 30.

USAC refers to the funding year as the year in which most services will begin, e.g., Funding Year (FY) 2020 is July 1, 2020 to June 30, 2021.

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Acronyms & Terms

FUNDING YEARS

USAC References beginning date07/01/2020 – 06/30/2021 = FY 2020

Program year # Based on first year of the program: 19982019-20 = Program Year 222020-21 = Program Year 23

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E-Rate Timeline

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Form 470 &

(Optional) RFP

Sept-Dec

Form 471

Jan-Mar

Funding

May-Sept

Form 486

Receive Funding

E-Rate Budget

In December, 2014, The FCC set the E-rate funding cap at $3.9 billion for each funding year.

2nd E-rate Modernization Order

The cap was previously $2.5 billion

Cap is adjusted for inflation each year (beginning in 2010)

Once each year, FCC can roll over unused funds from previous funding years into the current funding year

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Who is Eligible?Schools and School Districts

Non-traditional facilities

Conditionally by state – see Eligibility Table

Libraries and Library SystemsConsortia of eligible entities

Groups that band together to aggregate demand and negotiate lower prices (regional consortia, statewide networks)

http://www.usac.org/sl/applicants/beforeyoubegin/definitions.aspx

Eligibility Table :http://www.usac.org/sl/applicants/beforeyoubegin/non-traditional/eligibility-table.aspx

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Acronyms & Terms

Non-instructional Facility (NIF): a school building with no classrooms or a library building with no public areas

NIFs are eligible for Category 1 services

NIFs are eligible for Category 2 services only if necessary to provide effective transport of information to classrooms or public areas of libraries

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E-Rate Discount (20%-90%)

Discounts are based on percentage of students eligible for the National School Lunch Program (NSLP) and Urban or rural status of entity

• Schools• calculated by district

• Total free-reduced lunch students/total enrollment

• Libraries• Use school district in which the library is located

• Library Systems• Use address of main library

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E-Rate Discount Matrix

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Eligible Services List

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Eligible Services List (ESL) process

USAC sends draft ESL to FCC each year.

FCC issues a Public Notice with draft ESL.

Comment period

Reply comment period

FCC reviews comments and reply comments.

FCC issues a final list for the upcoming funding year.

Eligible Services List

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2020 Eligible Services List

Draft ESL released August 2,2019

Available online: https://docs.fcc.gov/public/attachments/DA-19-738A1.docx

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•C1 - Services needed to support broadband connectivity to schools and libraries

•C2 - Includes internal connections needed for broadband connectivity within schools and libraries and the management and maintenance of eligible equipment.

Categories of Services

Acronyms & Terms

Recurring Services – Services that occur every month. Examples: telephone service, Internet Access. Includes basic maintenance.

Use by June 30.

Non Recurring Services – One time charges. Examples: installation fees, network equipment. Install by September 30. Extensions available if funded or changes made on or after March 1 OR upon written request.

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Data Transmission Services & Internet AccessCategory 1

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• Fiber (Lit and Dark)

• OC-1, OC-3, OC-12, OC-n

• Wireless Service (e.g. microwave)

• Satellite Services

• DS-1, DS-2, DS-3

• Ethernet

• T-1, T-3, Fractional T-1

• MPLS

• Frame Relay

• SMDS

• Cable Modem

• DSL

• ATM

• Telephone Dial-up

• Broadband over Power Lines

• Self-provisioned Broadband Network

Fiber Options

E-rate support is available for leased lit fiber, dark fiber, and self-provisioned broadband.

Eligible costs include monthly charges, special construction, modulating electronics, equipment necessary to make a broadband service functional, and maintenance and operation charges. All equipment and services, including maintenance and operation, must be competitively bid.

Applicants may seek special construction funding for the upfront, non-recurring costs of deployment of new or upgraded facilities, including design and engineering, project management, and construction of network facilities.

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Does not include staff salaries!

Category Two - Eligible Services

Internal Connections

Managed Internal Broadband Services

Basic Maintenance of Eligible Broadband Internal Connections

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Category Two Budgets

Schools:$159.67/student, per site

Minimum $9,793.04 if site has fewer than 62 students

School sites with classrooms have budgets, no budget for NIFs

Libraries:$2.45/square foot

Minimum $9,793.04 if less than 4,000 sq. ft

Large Urban Libraries (IMLS locales 11, 12, 21):$5.32/square foot

Minimum $9,793.04 if less than 1,850 sq. ft

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Eligible Services-Category 2

Eligible Broadband Internal Connections

Subject to the Category 2 Budget

• Access points

• Cabling

• Caching

• Firewalls

• Switches

• Routers

• Racks

• UPS

• Wireless LAN Controllers

• Improvements, upgrades and software

necessary to support eligible broadband

internal connections components

• Functionalities listed here that can be

virtualized in the cloud, and equipment

that combines eligible functionalities

are also eligible.

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Subject to the Category Two budget

Services provided by a third party

• Operation, Management, And/or monitoring of eligible

broadband internal connection components

The third party may manage the school or library’s

equipment or provide the equipment as part of a lease.

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Managed Internal Broadband Services

(e.g. Managed Wi-Fi)

Subject to the Category Two budget

Support for basic maintenance of eligible internal connections

such as:

• Repair and upkeep of hardware

• Wire and cable maintenance

• Basic tech support

• Configuration changes

Support for BMIC is limited to actual work performed under

the contract.

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Basic Maintenance of Internal Connections

Eligible ChargesTaxes, surcharges and other similar reasonable charges

Lease fees to rent or lease eligible components

Shipping charges

Training

Installation and configuration

Installation may be provided by a third party

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Miscellaneous

E-Rate Filing

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FCC Forms 472 (BEAR) & 474 (SPI)

FCC Form 486

Application Review & FCDL

FCC Form 471 & RAL

Competitive Bidding

FCC Form 470 & RNL

Acronyms & Terms

E-rate Productivity Center (EPC, pronounced Epic): is the account and application management portal for the Schools and Libraries (E-rate) Program. Applicants, consultants, and service providers participating will use this tool to manage program processes and to submit questions.

FCC Form 470: To start the process of seeking funding for eligible services under the E-rate Program (more formally known as the Schools and Libraries Program), applicants must initiate the required competitive bidding process by filing the FCC Form 470

Allowable Vendor Contract Date (ACD): the date 28 days after the FCC Form 470 is posted to the USAC website

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FCC Form 470

Applicants post an FCC Form 470 and may issue an RFP* to open a competitive bidding process. Used to identify and describe desired categories of service and function of the services.

Process must be open and fair.

Applicants must wait at least 28 days after the later of the FCC Form 470 certification or RFP posting before selecting a service provider, signing a contract (if applicable).

Applicant must choose the most cost‐effective solution with the price of the E-rate eligible products and services as the primary factor in the evaluation.

• *Note* RFPs are not required by E-rate in all circumstances, but may be used to describe specific needs and circumstances.

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FCC Form 470

Service providers can:Review posted FCC Forms 470 and/or download

summary information. www.usac.org/sl or https://portal.usac.org

Respond to FCC Forms 470/RFPs

Review and follow applicant requirements and local and state procurement rules

Pay attention to any specific requirements including reasons for bid disqualification

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FCC Form 470

Service providers may not:

Prepare, sign, post or file an FCC Form 470.Design the evaluation process.Participate in the review/evaluation of bids.Provide free services, kickbacks, gifts, or other inducements to ensure bid selection.Bundle eligible and ineligible costs to hide the ineligible costs.

Do not assist the applicant in any way during the competitive bidding process

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Competitive Bidding

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FCC Forms 472 (BEAR) & 474 (SPI)

FCC Form 486

Application Review & FCDL

FCC Form 471

Competitive Bidding

FCC Form 470

Acronyms & Terms

Bid: A service provider response to an applicant’s FCC Form 470 and RFP which contains services and prices and any other information requestedPrice as the primary factor: In evaluating bids, the

price of the eligible products and services must be the most heavily-weighted factor the applicant’s evaluation of bids

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Acronyms & Terms

Request for Proposal (RFP): a bidding document (not required by E-rate) which provides detailed information about requested services, locations, bid submission requirements, etc.Some states or procurement agencies refer to these

documents by other names, e.g., Invitation for Bids (IFB)If an RFP is required by state/local procurement rules, the

applicant must issue one.

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Competitive Bidding

Applicants must ensure that the competitive bidding process is open and fair

Must keep all incoming bids/correspondence with bidders and prepare to evaluate bids equally

All potential bidders have access to the information from an FCC Form 470 and RFP, and they can respond to applicant requests

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Competitive Bidding

Do not assist or help the applicant in any way during the competitive bidding process.

This prohibition includes providing clerical or data entry assistance.

If applicants ask you for assistance:

Refer them to existing sources of information, e.g., their consultant, USAC or state website, state or local competitive bidding rules or regulations

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Competitive bidding

Do not assist or help the applicant in any way during the competitive bidding process.

This prohibition includes providing clerical or data entry assistance.

If applicants ask you for assistance:

Refer them to existing sources of information, e.g., their consultant, USAC or state website, state or local competitive bidding rules or regulations

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Competitive Bidding

Lowest Corresponding Price (LCP)

Service providers are required to offer and charge applicants the lowest corresponding price, which is the lowest price that the service provider charges to non-residential customers who are similarly situated to a particular school, library, or library consortium for similar services.

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Competitive Bidding

Lowest Corresponding Price (LCP) , continued

Ensures that service providers do not charge schools and libraries more for the same services because of their E-rate participation. Exceptions can be made if the provider can show that

they face significantly higher costs to serve this customer due to volume, mileage from facility, and/or length of contract.

Applies to all service providers and for all service arrangements (tariff, month-to-month and contracted services)

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Competitive Bidding Violations

The service provider has a relationship with an applicant that would unfairly influence the outcome of a competition or furnish the service provider with “inside” information.

Someone other than the applicant or an authorized representative of the applicant prepares, signs OR submits the FCC Form 470 and certification.

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Competitive Bidding Violations

A service provider representative is listed as the FCC Form 470 contact person and that service provider is allowed to participate in the competitive bidding processThe FCC Form 470 does not describe the desired products

and services with sufficient specificity to enable interested parties to submit bid responses

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Applicants Choose Provider

After the applicant closes the competitive bidding process (on or after the Allowable Contract Date), they will:

1) Evaluate all bids received

2) Select service provider(s)

3) Sign a contract, if applicable

4) Prepare & submit an FCC Form 471

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Suggested Bid Evaluation Matrix

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Factor Points Possible

Vendor 1 Vendor 2 Vendor 3

Price of the ELIGIBLE goods and services 30 15 30 25

Prior experience w/ vendor 20 20 0 20

Personnel Qualifications 10 10 5 5

Responsiveness 15 0 15 15

Technical Merit 20 20 10 20

Price-Other Costs 5 5 5 5

Total 100 80 75 90

FCC Form 471

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FCC Forms 472 (BEAR) & 474 (SPI)

FCC Form 486

Application Review & FCDL

FCC Form 471

Competitive Bidding

FCC Form 470

Acronyms & Terms

Form 471: Applicants file an FCC Form 471 to request discounts on eligible products and services. Applicants must include information on the recipients of services, discount calculations, costs of service, dates of service, and service provider(s), and provide detailed descriptions of services. Applicants must also certify compliance with program rules.

When to File the 471: Applicants cannot file FCC Form 471 before the Allowable Vendor Selection/Contract Date (ACD), which is 28 days after the FCC Form 470 is posted to the USAC website.

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Acronyms & Terms

Funding Request Number (FRN): the identification number assigned to an FCC Form 471 Block 5 funding requestFRN Line Item: Each service entry or part number requires a

separate line item within the FRNForm 471 Filing Window: The period generally between

mid-January and mid-March (prior to the start of the funding year) when forms filed are treated as having been received on the same day

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Acronyms & Terms

Receipt Acknowledgment Letter (RAL): a notification issued by USAC to the applicant and the service provider that summarizes the information provided in the FCC Form 471

Many of the entries on the form can be corrected after submission by using the RAL

Ministerial and clerical errors can be corrected until USAC issues the Funding Commitment Decision Letter

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FORM 471 RECEIPT ACKNOWLEDGEMENT LETTER (RAL) IS NOT A FUNDING LETTER

• BE SURE TO WAIT FOR APPROVAL OF

FUNDING (FCDL) BEFORE BEGINNING

SERVICE

• OR GET WRITTEN BOARD APPROVAL

THAT THEY WILL PAY 100% PRIOR TO

INSTALLING SERVICES THAT ARE NOT

YET FUNDED!

WARNING!

• RAL IS ACKNOWLEDGEMENT

FCC Form 471

Service providers may assist with Form 471Applicant provides information on the service providers and eligible services chosenApplicant must identify the eligible sites which will receive servicesApplicant calculates and reports how much support they are seeking for the yearApplicant includes discount calculation informationApplicant certifies compliance with program rules

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Application Review & Funding

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FCC Forms 472 (BEAR) & 474 (SPI)

FCC Form 486

PIA Review & FCDL

FCC Form 471

Competitive Bidding

FCC Form 470

Acronyms & Terms

Program Integrity Assurance (PIA): the USAC group that reviews and makes funding decisions on program applications

ALL applications go through PIA

Funding Commitment Decision Letter (FCDL): a notice issued by USAC to the applicant and the service provider that contains commitment decisions on funding requests. Online in EPC beginning with FY2016.

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Application Review & Funding

During Application Review, PIA may contact the APPLICANT to:

Check the eligibility of the schools &/or libraries and their discount levelsVerify that the services requested are eligible for discountsGive applicant an opportunity to make allowable corrections to applicant’s formIn some cases, ask for additional verification of applicant’s compliance with program rulesModification Notification for minor changes

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Application Review & Funding

Following application review, USAC issues a FCDL to both the applicant and the service provider(s)Applicants and Service Providers should carefully review the FCDL for details on approved or denied requests and your next steps

If funding is reduced or denied, you or the service provider can consider filing an appeal of the USAC decision with USAC or the FCC.

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Application Review & Funding

Service Provider will work with applicant directly to begin service

Both parties must follow contract terms

Ensure procedures are in place and IN WRITING if any work is done or products provided prior to funding

Ensure both parties know the applicant selected discount method

BEAR or SPI

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FCC Form 486

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FCC Forms 472 (BEAR) & 474 (SPI)

FCC Form 486

Application Review & FCDL

FCC Form 471

Competitive Bidding

FCC Form 470

Acronyms & Terms

FCC Form 486 Notification: a notification issued by USAC to the applicant via their EPC News Feed after an FCC Form 486 has been certifiedChildren’s Internet Protection Act (CIPA): a law with

specific requirements on Internet safety policies and filtering

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FCC Form 486 - Purpose

•FILED BY APPLICANT/CONSULTANT• 120 DAY DEADLINE from the receipt of funding or the first

day to receive service, whichever is later

•Notify USAC that applicant’s eligible services have started or been delivered and invoices for those services can be processed and paid•Report applicant’s status of compliance with CIPA

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FCC Forms 472 & 474 - Invoicing

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FCC Forms 498, 472 & 474

FCC Form 486

Application Review & FCDL

FCC Form 471

Competitive Bidding

FCC Form 470

FCC Form 498

Purpose of FCC Form 498:

Establishes user IDs and passwords for online updates, submissions, access, etc.

Company officer and general contact can set up additional users and their level of access. This information populates your EPC profile.

Populates SPIN Contact Search database that applicants use to contact you and find your SPIN.

Provides electronic remittance information USAC uses to pay invoices.

In addition, all Schools and Libraries (E-rate) Program applicants (billed entities) receiving payments via the Billed Entity Applicant Reimbursement (BEAR) process need to file the FCC Form 498 in the E-rate Productivity Center (EPC) to receive payment.

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Acronyms & Terms

BEAR – Billed Entity Applicant Reimbursement (FCC Form 472) Applicant pays in full; reimbursement check pass through from USAC to service provider to Applicant

Beginning in July 1, 2016, reimbursement will go directly to the applicant, through EFT

SPI – Service Provider Invoice (FCC Form 474) Applicant pays non-discount share; SP invoices USAC directly for E-rate discount portion

• *Note* Applicants can choose their method of invoicing; service providers cannot force applicants to use a particular method.

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Invoicing

ALL SERVICE PROVIDERS MUST USE E-FILE

PAYMENTS ARE MADE ELECTRONICALLY

USAC E-File System:

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Deadlines

FCC Form 470 - Posted at least 28 days before the filing of the FCC Form 471, keeping in mind the FCC Form 471 application filing window opening and closing dates

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FCC Form 471 - Received or postmarked no later than 11:59 p.m. EST on the day of the close of the FCC Form 471 application filing window (exact date will be posted on USAC website)

Deadlines (cont’d)

FCC Form 486 – Certified online no later than 120 days after the date of the USAC Funding Commitment Decision Letter or the service start date, whichever is later

FCC Form 472/ FCC Form 474 - Received or postmarked no later than 120 days after the date of the FCC Form 486 Notification or the last date that the applicant can receive service from the provider in the funding year at issue, whichever is later

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Deadlines (cont’d)

Appeals – FCC or USAC - Must be received or postmarked no later than60 days after the date of USAC's decision letter

FCC Form 473 – Service Provider Annual Certification must be filed each year – prior to receiving invoice payments from USAC.

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KSLLC APPLICANT Process - Timeline

July-Sept: Service Providers demonstrations for applicants

August-December: Prepare RFP Questionnaire

Sept-December: Post Form 470 & RFP

Sept-January – Host fair and open bidding process

Oct-Jan – Select winning bids, gather and sign contracts

Jan-Mar – Applicant Form 471s filed online at EPC Portal

Mar-Apr – Receive RAL notices;

April 1-Installation for Category 2 equipment may begin

May-June – Funding begins

July – Start service recurring services FY2020

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Questions?

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Thank you for attending!Contact Your E-rate Professionals,

Kellogg & Sovereign® Consulting, LLC, for further questions or assistance!

1101 Stadium Drive | Ada, OK 74820 | 580.332.1444 info@kelloggllc.com | www.kelloggllc.com