E-rate TopicsMDE Data ConferenceJuly 23rd-27th

Lee Bray, MDEGary Rawson, ITS

Topics

1. Technology Plans2. Funding3. Future4. Basic Maintenance5. School/District Merging6. Open Discussion

Technology Plans

Year 2 Annual Review – Due September 21, 2012

2013 – 2016 Technology Plan – Start planning now

E-rate Funding, as of July 2012

Original Funding Cap $2,250,000,000 Current Funding Cap $2,338,786,577 Net increase of $ 88,786,577

Total Demand FY2012 $5.237 billion (up 21.5%)

Total P1 Demand 2012 $2.444 billion (up 12.5%)

Total P2 Demand 2012 $1.379 billion (90% only)

E-rate Funding Demand

Funding Year Total Demand % Change

2012 $5,236,939,650 21.5%

2011 $4,309,942,527 10.1%

2010 $3,915,889,487 -1.8%

2009 $3,986,033,329 -7.5%

2008 $4,307,572,380 16.8%

P1 E-rate Funding Demand

Funding Year Total Demand % Change

2012 $2,444,087,363 12.5%

2011 $2,172,884,435 6.6%

2010 $2,038,141,531 -0.3%

2009 $2,043,431,050 4.5%

2008 $1,954,968,906 9.1%

P1 + 90% P2 E-rate Funding Demand

Funding Year Total Demand % Change

2012 $3,822,939,650 20.2%

2011 $3,180,888,705 4.6%

2010 $3,041,558,623 6.7%

2009 $2,851,562,280 -5.6%

2008 $3,021,663,857 20.7%

P1 E-rate Funding DemandWhy the increase?

BTOP – Broadband Technology Opportunities Program

$3.5 Billion for Broadband projects

P1 E-rate Funding DemandWhy the increase?

Funding Year

Funding Requests Total Demand Avg. $ per FRN

2012 154 $6,242,661 $40,536

2011 88 $2,731,457 $31,039

2010 10 $330,199 $33,019

What changed? Bundled VoIP Handsets.

E-rate Funding in FY2012, Where does that leave us?

Current Funding Cap $2,338,786,577 P1 Demand $2,444,087,363 Remainder for P2 -$ 105,300,786

P2 Demand for 90% $1,378,852,287 P1 and P2 90% Demand

$3,822,939,650

Rollover – April 2012 $ 400,000,000 Rollover – July 2012 $ 650,000,000 Total Rollover $1,050,000,000

E-rate Funding in FY2012, Are we going to make it?

Current Funding Cap $2,338,786,577 Total Rollover $1,050,000,000

Total Available for 2012$3,388,786,577

P1 and P2 90% Demand$3,822,939,650

Difference -$ 434,153,073

Hopefully, that is close enough.

What does the future hold?

As I see it the FCC has 4 options:1. Do nothing2. Remove funding from many services

that are currently eligible3. Alter Discount table4. Increase the funding cap

FCC does nothing

If we have another 12% increase in P1 Demand for FY 2013 we will need $2,737,377,846

We cannot always count on rollover dollars1. Why? Where do rollover dollars come

from? P2 will be a thing of the past (came

close this year, didn’t it) If we have another 12% increase in P1

Demand in FY 2014 we will need $3,065,863,187 just for P1

Then what?

FCC does nothing

If by FY 2014 we have a demand of $3,065,863,187 with a funding cap of $2,338,786,577, what do you think is going to happen?

Proration, even for P1 services – to divide, distribute, or assess proportionately. 90% first, but will only get whatever percentage

the funds will allow For example, a 90% school might only get an 85%

discount, if that is what the funds allow. How will you budget for that?

FCC does nothing

I don’t think we want the FCC to do nothing

Remove funding for many services that are currently eligible

Eliminate P2 entirely (equipment and maintenance)

Cell phones Long distance POTS Web Hosting Only pay for network connectivity

and Internet Access services at the school

The program saves $, but someone loses

Alter Discount Table

No more 90% discounts on any service. One suggestion was to lower all

discounts by 5% across the board Another suggestion was to lower all

discounts by 10%. The purpose is to match potential

demands to available funding. Sounds like proration, doesn’t it.

How is lowering the discount table different from proration?

The program saves $, but someone loses

Increase the funding cap

Original Funding Cap $2,250,000,000 Current Funding Cap $2,338,786,577 Net increase of $ 88,786,577 (in 15 yrs)

Equal Demand? $5.237 billionThen applicants below 80% will apply, increasing demand

even moreIs the program fair in its current form?

Double Current Amt? $4,677,573,154

Where would the funds come from?

Funding, current or future

Basic Maintenance

Agreements or contracts must state the eligible components covered, make, model and location

Basic Maintenance is a recurring service. Must be delivered within the July 1st to June

30 timeframe (cannot be extended beyond June 30th)

Cannot be generic “Maintenance on eligible equipment”

Cannot be for a block of hours “100 hours of maintenance at $75 per hour”

Basic Maintenance

Unbundled warranties are NOT eligible Unbundled warranties allow for broken equipment

to be fixed or if it is beyond repair, replaced Unbundled warranties are considered a type of

retainer and not as an actual maintenance service This does not apply to a manufacturer’s

warranty of no more than three years that is included in the price of the equipment

OR If the retainer is tied to actual service

performed

Basic Maintenance – SoftwarePriority 2

Operating system software, such as network operating system software required to obtain operation of an eligible component, is eligible, including functionality provided with the core operating system at no cost. Additional software products available separately that provide optional operational features are not eligible for discount.

E-mail software that is a server-based, shared product is eligible. If such a software product provides substantial additional functionality that is not eligible, such as archiving, database, workflow, or groupware features, only the e-mail portion of the product is eligible and the cost of the ineligible portion must be cost allocated.

Basic Maintenance - Software

The following basic maintenance services are eligible: Repair and upkeep of eligible hardware Wire and cable maintenance Basic technical support Configuration changes

Annual software service agreements are not mentioned as eligible

“…software Client Access Licenses are not eligible as Basic Maintenance. However, Client Access Licenses for eligible software products may be eligible in the Internal Connections funding category. “

Basic Maintenance - Smartnet

Cisco SMARTnet Provides: Global 24 hour access to Cisco Technical Assistance

Center (TAC) Access to online knowledge base, communities and

tools Hardware replacement options, including 2-hour, 4-

hour, and next business day Operating system software updates Smart, proactive diagnostics and real-time alerts on

devices enabled with Smart Call Home The FCC determined that SMARTnet was an

unbundled warranty and thus ineligible

Basic Maintenance Smartnet redefined

Offerings historically included in SMARTnet to be divided, for E-rate customers, into two offerings

CiscoBase: BMIC services allowable as a one-time charge: Software downloads, bug fixes, etc. TAC access Web tools Does not include Advanced Hardware Replacement

Cisco Time & Material process: replacement parts/physical labor Established price points for replacement parts Expect Customer to establish relationship with approved E-

rate provider to implement a complete support program

Basic Maintenance

Schools or Districts Merging

Transfers From a Closed Location Equipment can be transferred to other eligible

entities - even if those entities are at a lower discount level - if the particular location where the service was originally received is temporarily or permanently closed. This includes equipment serving part of a facility, such as equipment serving individual classrooms, if that portion of the facility is temporarily or permanently closed. The transferring entity must notify USAC of the transfer, and both the transferring and receiving entities must maintain detailed records of the transfer and the reason for the transfer for five years from the date of the transfer.

Schools or Districts Merging

We just addressed what can be done with equipment.

What about the WAN circuits, Internet, Long Distance, POTS lines, Cell Phones? We have asked for clarification and have

not yet received an official answer. Unofficial answer is to upgrade

circuit/services and maintain split billing. If two SPs then do a SPIN change and do

split billing. You must notify USAC

Schools or Districts Merging

Any other questions?