E-Rate Program Overview

What is the E-Rate Program?

The Telecommunications Act of 1996 established the E-Rate program in an effort to aid U.S. schools and libraries in promoting technology and obtaining affordable telecommunication and Internet services. Awarded annually since 1998, the program funds of 2.25 billion dollars are divided into two funding levels:

Category One Services (Reccurring Telecommunication Services)

The Category One services are Telecommunication and Internet Access. These services include the following:

  1. 1. Digital Transmission Services (ATM, Cable Modem service, Digital DSL,DS-1, DS-2, DS-3, Frame Relay, ISDN, OC-1, OC-3, OC-12, Satellite, SMDS, T-1, T-2, T-3, Fractional T-1, Wireless)
  2. 2. Internet Access Service (Unbundled Internet Access, Domain Name Registration, Wireless Internet Access)

Due to the E-Rate Modernization, all voice services are phased-out. The phase-out began in Funding Year 2015, and continued until all voice services were phased out in Funding Year 2019. Voice funding was phased-out so more funds can be dedicated to closing the Wi-Fi gap. See below a table that demonstrates how much funding will be available yearly for each discount band:

Category Two Services

Due to the recent E-Rate Modernization Order, each school now has a Category Two budget, which is $150 per student, per school, over a 5 year period. It will be important to make the most of your Category 2 budget. Internal connection upgrades and projects will allow your school or library to increase connectivity to aid your students and patrons – and the higher connectivity costs that may result will still be fully eligible for reimbursement via Category 1. To maximize your Category 2 funding, please consider the following suggestions.

Funding for Internal Connections can best be utilized by planning ahead and assessing if any large projects or even small equipment purchases (such as a single switch, or a UPS, rather than system-wide upgrades) may be a good choice in 2016-2017, since these will need to be included on your application.

Basic Maintenance of Internal Connections will often be tied to equipment purchases, but note that ANY EXISTING eligible equipment is covered. If no large internal connection purchases are planned, please consider maintenance of your existing network as a way to improve and maintain your connectivity while receiving additional yearly E-Rate reimbursement until your Category 2 budget is depleted.

Managed Internal Broadband Services covers third party management of any new or existing eligible components. As a potential monthly or annual recurring cost, this type of service is also an excellent way to utilize your Category 2 budget on a yearly basis.

What is the E-Rate Modernization?

In 2014, USAC and the FCC released an order to modernize Erate, which “re-focuses the program on providing the necessary support to ensure our nation’s schools and libraries have affordable access to high-speed broadband” –FCC The goal of the Modernization Order, which takes full-effect as of Funding Year 2015 (July 1, 2015-June 30, 2016), is to close the “Wi-Fi Gap” and to bring faster, more efficient broadband into schools and libraries nationwide. In an effort to close the “Wi-Fi Gap,” as of FY2015 webhosting, email hosting and cellular data are no longer eligible, and telecom voice services are being phased out of the program. The ineligibles and phase out were implemented with the intention to fund Category 2 (Internal Connections/Maintenance) funding for all applicant discount levels.

Watch our E-Rate Modernization video below:

What is the E-Rate process?

In order to obtain E-Rate discounts and funds, an eligible institution must be 100% E-Rate compliant and meet critical deadlines and specifications throughout the fiscal year. These include:

  • Preparing a technology plan
  • Opening the competitive vendor bidding process for 28 days [Form 470]
  • Requesting the discounts and/or funds for eligible E-Rate services [Form 471]
  • Answer questions during Program Integrity Assurance (PIA)
  • Securing a FCDL or Funding Commitment Decision Letter to allocate secured funds [Form 486]
  • Preparing and submitting an invoice for obtained services [Forms 472]

How long does it take to obtain E-Rate funding?

The entire process is managed over multiple years from the initial application through receipt of discounts and reimbursements. The strict deadlines and procedures established by the Universal Service Administrative Company (USAC)/Schools and Libraries Division can be difficult to manage. E-Rate Exchange, LLC will assist you in this lengthy multi-year process.
Because E-Rate procurement is our primary focus, we understand the process inside and out. Our proven methods for planning, managing and executing E-Rate applications have resulted in significant gains for our clients over the years. We have mastered this complicated scheduling, data generation and submission so that you don’t have to.

Investigate Your Options

Contact us for an initial consultation and learn how we can remove the burden of the E-Rate application process from your shoulders.

Where can I go for more
information on E-Rate?

There are many websites geared for schools and libraries interested in obtaining E-Rate funds and discounts. Below are just a few resources that comprehensively outline and detail the E-Rate process from start to finish:


Why Outsource?

Why Outsource e-Rate Funding "I would say that if you are looking for an easy, painless way to do the E-Rate application process and save money at the same time, then definitely go with this company” read more

Chris Tully
Director of Technology
Bergenfield School District