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Zeus Kerravala
Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his...
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Zeus Kerravala | April 23, 2015 |

 
   

5 Important Things to Know About E-Rate

5 Important Things to Know About E-Rate If we don’t start changing the way students interact with one another, then making the shift in the workplace is always going to be an uphill battle.

If we don’t start changing the way students interact with one another, then making the shift in the workplace is always going to be an uphill battle.

The FCC's E-Rate Modernization Order, when considered in conjunction with the growing prevalence of wireless devices, interactive displays, collaboration tools and rich content, is poised to create a whole new way of learning for students. While you might not think this is all that significant in terms of your role in unified communications, you'd be wrong.

Learning Mandate
The E-Rate order, put in place last December, aims to better align technology budgets in schools with what's needed today versus nearly 20 years ago when the FCC first developed the E-Rate plan. (In actuality, E-Rate also funds libraries, but for the sake of this article, I'm focusing on K-12 education.)

Some of the people I've talked to about the program feel the changes are long over due. However, based on a significant amount of research I did last year on the K-12 vertical, I believe the changes are well timed. While schools have been experimenting with new technology such as tablets, laptops, and Chromebooks, I think the majority of them are just starting to figure how to use such devices to change the way students learn.

When I make the statement, "change the way students learn," I'm talking about more than just using tablets for e-books. While e-books do provide some cost and convenience advantages, they don't change the way students learn -- they're still about reading. The combination of wireless devices, interactive displays, collaboration tools, and rich content is what creates a whole new way of learning. Now students can interact with the content and remotely collaborate with other students, even ones at other schools.

Had these changes come even a few years ago, I'm not sure schools would have known what to do with the extra funding. I believe we're just starting to see the transformation of K-12 and the reallocation of E-Rate funds will be a big part of this change.

What You Need to Know
Understanding the new E-Rate plan can be confusing though. One option is to read the FCC's 176-page manifesto. Given my short attention span and the lack of an audio book version, I opted instead to interview Aruba Network's E-Rate expert, Dan Rivera. From that conversation I came up with the Top 5 things you should know about E-Rate.

  1. More money than ever is available. Prior to the program change, the E-Rate funding cap, set in 2010 and adjusted for inflation, was $2.4 billion. Last July, the FCC revised the E-Rate order and brought the cap up to $3.9 billion -- a whopping pile of cash on its own. This year, unused funds from previous years add another $1.6 billion to the pot. Few people seem to be aware of these rollover dollars. Out of the 17 years of E-Rate funding, the Universal Service Administrative Committee (USAC) has only funded all of the demand twice -- in 1999 and 2010. Rollover funds occur when USAC has unspent dollars for any given funding year. Although demand has generally exceeded the funding cap, unspent funds occur when USAC is unable to fully fund an entire discount bracket. That money is put into rollover funds.
  2. The competitive bid process has changed. The new E-Rate rules bring a simplified competitive bid process. Schools that use a preferred master contract no longer have to go through the long, arduous competitive bid process. A preferred master contract eliminates the need for filing E-Rate Form 470, which is the K-12 equivalent of an RFP. This allows the deal to bypass a public bid and creates a more manageable number of options from which a school can choose. Price of the eligible components must still be the single, heaviest weighted factor, but under the simplified competitive bid process schools also can consider factors like the ability to integrate with old infrastructure.
  3. Eligible services have changed. Each year the FCC releases an eligible services list. Category 1 items are products and services used for external connectivity, including telecom services, WAN connections, and Internet access. The FCC has eliminated legacy technologies such as call waiting and pagers from the Category 1 list, and is phasing out voice services. In the near future, the only Category 1 items that will remain are Internet services and WAN connections. Category 2 will see technologies such as PBXs, video conferencing, and some servers cut, while Wi-Fi, switches, routers, and security devices will get a significant boost in allocations. Wi-Fi will see the largest increase in funding; this makes sense, as the Wi-Fi in most schools is woefully underpowered. Wi-Fi density needs to be doubled in many cases, and many schools are extending wireless outdoors to include playing fields and other areas.
  4. The discount structure has changed. The changes to the discount structure will impact large, diverse school systems the most. E-Rate is shifting to a blended discount model to increase the fairness. The discount given to a school varies by the number of kids that participate in the free lunch program, which is an indication of affluence in a particular school. A district with 20 schools could find the location with the biggest discount and use those criteria to apply for other schools in the entire district. The new program blends all of the discounts together, and all schools must use a district-wide discount based on free lunch as a percentage of all students.
  5. New deadlines are in place. Deadlines are a key now; miss a date and risk losing the funding. The application window typically opens in January of any given year and closes in late March. However, be aware of a provision specifying that Form 470 must be active 28 days prior to the closing of the window -- in other words, the last day that the form can actually be posted is in late February. If a school posts after that, all is not lost. The FCC will still accept the application, but will note it as "out of window" and assign it a lower priority. The allocation of funds is prioritized by poverty level first and then any unallocated budget is used to fill RFPs filed outside the window.

Why You Need to Care
I know in the UC industry we spend a lot of time discussing new ways to work and how to mobilize a workforce to improve productivity. However, if we don't start changing the way students interact with one another in classrooms, then making the shift in the workplace is always going to be an uphill battle. I'm glad the FCC has recognized this... but it's up to the school administrators to understand how to maximize the money made available in the new E-Rate plans.

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