E-Rate Program - Discounted Telecommunications Services
Federal Communications Commission (FCC)/
Universal Service Administrative Company (USAC)/
Schools and Libraries Division (SLD)

Non-profit private schools -- along with public schools, and libraries -- can receive discounted telecommunications services through the E-rate program.

The E-rate program is administered by the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC). The program was set up in 1997 when the Federal Communications Commission (FCC) adopted a Universal Service Order implementing the Telecommunications Act of 1996. The Order was designed to ensure that all eligible schools and libraries have affordable access to modern telecommunications and information services. Up to $2.25 billion annually is available to provide eligible schools and libraries with discounts under the E-rate program for authorized services.

Amount of Discounts

The E-rate provides discounts of 20 percent to 90 percent for eligible telecommunications services, depending on economic need and location (urban or rural). The level of discount is based on the percentage of students eligible for participation the National School Lunch Program or other federally approved alternative mechanisms. (Non-public schools and others not participating in the National School Lunch Program can use federally approved alternative mechanisms contained in the Improving America's Schools Act. Details of such mechanisms may be found in "Alternative Discount Mechanisms" on the SLD web site. 

Eligible Services

Discounts can be applied to commercially available telecommunications services, Internet access, and internal connections. Eligible services range from basic local and long distance phone services, and Internet access services, to acquisition and installation of equipment to provide internal connections.

An "Eligible Services List" is posted on the SLD web site. Be sure to check the SLD web site for this list; updates are occurring for Year 4. Any service NOT included on this list as an eligible service should be considered ineligible. Please note that not all of the eligible services may be available in all areas throughout the country. (Note: The FCC has authority to revise service eligibility determinations. Applicants and service providers are well advised to regularly check the SLD web site to learn of any possible additions or adjustments to the Eligible Services List.)

Examples of Eligible and Ineligible Services (Eligibility may in some cases be conditional)

Application Process

Schools that plan to participate in the E-Rate program will need to follow a series of steps in order for their request for services to be placed on the SLD website. The timeline for filing appropriate forms is announced annually by the SLD on their website . While this request for services (form 470) is on the website, vendors interested in providing services can access your request and provide bids on it. At the end of the required posting period, you may choose a vendor who can provide the services you have requested. Here are the steps that must be followed:

Instructions provided by SLD on the application process or http://www.sl.universalservice.org/apply/ (Note that the dates are for funding year 4. The SLD website will be updated in future years to show the dates for those years.)

To apply for E-rate Discounts, the applicant ("you") must:

1. Develop a technology plan: If you have not already developed a technology plan, you need to do so then and submit it for approval by your State or another certified approving body (see above). Note that your technology plan must be approved before you file the Form 486 and receive discounts.

2. Submit FCC Form 470 (Description of Services Requested and Certification Form): If you plan to file a Form 471 ONLY for services provided during Funding Year 4 under contracts signed pursuant to posted Forms 470 in prior years and/or pursuant to a pre-existing, multi-year contract, for which you filed a Form 470 in a prior year and which has not been voluntarily extended since July 10, 1997, you need not submit a Form 470. (Skip to Step 5 below for the next step on this precise kind of request.) For all other discount requests, you must complete the Form 470 application online at the SLD web site, or apply by mail using the mailing address indicated on the application form. No application forms may be submitted via e-mail or fax. If you file online, you must print out a hard copy of the Block 5 Certification page, have it signed by an authorized individual, and mail it to the SLD. Applicants may check the SLD web site for the posting of their requests for services. After receiving and posting your Form 470, the SLD will mail you a Form 470 Receipt Notification Letter, confirming the posting of your Form 470. All Form 470 materials which you mail, whether the entire form or the signed and dated certification page from your online filing should be directed to: SLD-Form 470, P.O. Box 7026, Lawrence, Kansas 66044-7026. If you use express delivery services or U.S. Postal Service, Return Receipt Requested, send to: SLD-Form 470, c/o Ms. Smith, 3833 Greenway Drive, Lawrence, Kansas 66046, telephone number (888) 203-8100.

3. Provide for a 28-day competitive bidding period: The posting of your Form 470, Description of Services Requested, on the SLD web site launches a 28-day competitive bidding period, during which service providers may contact you to bid on your requested services. You must wait at least 28 days from the date of your FCC Form 470 posting before signing any contract or making other arrangements for new services. However, nothing in this process is intended to supplant or replace State or local competitive bidding processes or timeframes. The Form 470 Receipt Notification Letter will indicate the Allowable Vendor Selection/Contract Date (the 28th day after the posting of your Form 470). You should not sign new contracts or select service providers, nor should you sign a Form 471, before that Allowable Vendor Selection/Contract Date.

4. Select service provider/sign contracts: At the end of the 28-day competitive bidding process, select the service provider(s) who will provide the services you have requested. Price must be the primary consideration in choosing a service provider, although other criteria may be included such as: service quality, prior experience, personnel qualifications, management capability, and schedule compliance, thus leading to the most cost-effective solution. Once the service provider is selected, a contract should be executed (except in the case of tariffed telecommunications services or month-to-month service arrangements, which are usually provided without a formal written contract). Until all of the services you are requesting have been reviewed and approved by the SLD, you cannot assume that everything you have contracted for will be eligible for discounts. You should therefore exercise caution in signing a contract and consider including appropriate conditions which make your obligation contingent upon being approved for discounts.

5. Submit FCC Form 471 (Services Ordered and Certification Form) inside the application window: After you have selected service providers and signed contracts, you will file FCC Form 471. For applicants whose Form 471 seeks discounts ONLY for services under multi-year contracts precisely as described in step 2 above, the Form 471 may be filed as soon as the Form 471 filing window opens. The entity responsible for paying the bills should file FCC Form 471. All applicants are strongly urged to file their Form 471 online. The Year 4 online Form 471 is compatible with a variety of browsers and platforms. The system will correct your errors, do math for you, generate a Receipt Acknowledgement Letter earlier than most manual filings, and ease your application swiftly into the SLD compliance review process. All Form 471 materials which you mail, whether the entire form or the Item 21 attachments and the signed and dated certification page from your online filing should be directed to: SLD-Form 471, P.O. Box 7026, Lawrence, Kansas 66044-7026. For express delivery service or U.S. Postal Service, Return Receipt Requested, send to: SLD-Form 471, c/o Ms. Smith, 3833 Greenway Drive, Lawrence, Kansas 66046, telephone number (888) 203-8100.

   As previously noted, in order to make sure the Form 471 application is within the window, all manually submitted Form 471 application materials must be postmarked no later than January 18, 2001.

   Unlike Year 3, all materials associated with Form 471 must be postmarked no later than January 18, 2001 in order for the request to receive consideration as inside the window. This change is to help SLD give applicants earlier funding decisions. These materials are:

• The Form 471 itself (whether electronic or paper)

• The Block 6 certification of the Form 471 with an original signature by the authorized person

• All attachments for Item 21

• The Block 5 certification of any Form 470 cited in a Year 4 Form 471 with an original signature by the authorized person.

Failure to make the January 18 deadline for Form 471 application materials will place the applicant's entire funding request outside the application window, and the applicant's funding will be jeopardized. Any Year 4 funding requests based on a Form 470 whose certification has not been received or postmarked by January 18, 2001 will be rejected.

6. Be prepared to answer questions on your application: The SLD may need to contact you for additional information in support of your application. Additional information or clarification may be required before your application can be entered into our system if you submitted it on paper. You will not receive the Form 471 Receipt Acknowledgement Letter discussed in Step 7 until such information is received and data entry of your Form 471 is completed, including the Block 6 certification page. You will know that data entry has been completed when you receive the Form 471 Receipt Acknowledgement Letter. Then you may be contacted by SLD's Program Integrity Assurance team, who will be seeking information to ensure that your application is consistent with program rules. You should respond to these inquiries as quickly as possible so that processing of your application is not delayed. If you do not provide the information required, decisions will be made on your application based on the information that is available, which may result in denials of your funding requests.

7. Receive and review your Form 471 Receipt Acknowledgement Letter: The SLD will mail you and your service providers Form 471 Receipt Acknowledgement Letters, confirming the services requested on your Form 471. Follow the instructions in the letter to notify the Fund Administrator promptly if the Administrator has made errors.

8. Receive your Funding Commitment Decision Letter: After your Form 471 application has been reviewed, the SLD issues a Funding Commitment Decision Letter, which is the written communication to applicants telling them the level of E-rate funding that has been allocated for their E-rate eligible services. Each service that you request will be assigned a Funding Request Number and will be approved or disapproved individually. The SLD will also notify your service providers of your funding commitment.

9. Assure technology plan approval; receive services; file Form 486: After you receive the Funding Commitment Decision Letter, you will submit FCC Form 486, the Receipt of Service Confirmation Form, as an indication that services have begun. This form allows the SLD to process your service provider(s) invoices for your discount. ("Early filing" is an option if services start in July of the funding year. See the SLD web site for more information.) When you submit the Form 486, you must certify that your technology plan is approved by an SLD-certified technology plan approver.

10. Retain records: Retain your records. You must retain for five years any and all worksheets and other records that you have relied upon to fill out Forms 470 and 471. Applicants' receipt of funding commitments from SLD is contingent on applicants' compliance with all statutory, regulatory, and procedural requirements of the Schools and Libraries Program. Applicants who have received funding commitments from SLD continue to be subject to audits and other reviews that SLD or the FCC may undertake periodically to assure that funds have been committed and are being used in accordance with all program rules. If the SLD subsequently determines that its funding commitment to you was erroneously issued due to action or inaction, including but not limited to that by SLD, the applicant, or a service provider, and that the action or inaction was not in accordance with such requirements, then SLD may be required to cancel these funding commitments and seek repayment of any funds that have been disbursed in error. The SLD and other appropriate authorities (including but not limited to USAC and the FCC) may pursue enforcement action and other means of recourse to collect erroneously disbursed funds. If applicants represent multiple billed entities, collect data from those entities, and add up that data, they should retain those data sheets for five years. If an applicant is audited, it should be able to demonstrate to the auditor how the entries in its application were provided.

11. Appeals: If you disagree with an SLD decision, you may appeal to the SLD or to the FCC, although you are encouraged to appeal first in writing to the SLD. If the SLD denies your appeal, you may still appeal to the FCC. In all cases, however, FCC rules require that your appeal be received within 30 days of the date appearing on your SLD decision letter. If you appeal first to the SLD and are denied, your appeal to the FCC must be received within 30 days of the date on the letter from SLD denying your appeal. To appeal to the SLD, mail your letter of appeal to: Letter of Appeal, Schools and Libraries Division, Box 125-Correspondence Unit, 80 South Jefferson Road, Whippany, NJ 07981. Note that appeals submitted by fax, phone call, and e-mail CANNOT be processed. See the SLD web site for detailed guidance on appeals.

12. Pay your share: After the SLD receives your FCC Form 486 and notifies your service provider, and after your service provider incorporates discounts into your bills, your service provider(s) will invoice the SLD for the discounted portion of your bill. Alternatively, you may seek reimbursements through Form 472, Billed Entity Applicant Reimbursement (BEAR) Form, signed by you and your service provider. (For details on the BEAR process, see "Form 472 (BEAR) Filing Guidance" posted on the SLD web site.) At the same time, the service provider(s) will invoice you for the non-discounted portion of your bill. Service provider invoices submitted to the SLD will be processed and paid generally within 40 days of receipt.

13. Prepare for the next funding year: For each year of the discount program, schools and libraries must file Forms 470 for tariffed or month-to-month services and for new services to be provided in the following funding year. In addition, new Forms 471 must be filed each year for discounts on any eligible service. Funding is on a fiscal year basis, beginning July 1st of each year and running through the following June. Form 471 applications will be accepted upon the opening of the filing window for the program year that begins the following July 1. While schools and libraries may enter into multi-year contracts, the funded support will be committed only for services delivered in the funding year for which the Form 471 is properly submitted. Schools and libraries must reapply for discounts each year. Discounts cannot be guaranteed for subsequent years. Multiple year discount commitments will not be granted.

Schools should plan in advance so that they meet the required dates. The chart below shows the key dates for funding year 4 (July 1, 2001- June 30, 2002):

Children's Internet Protection Act

On December 21, 2000, President Clinton signed into law the "Children's Internet Protection Act" as part of a spending package for FY2001. The Children's Internet Protection Act requires schools and libraries that receive discounted telecommunications services under the E-Rate (or services paid with funds under Title III of the Elementary and Secondary Education Act) to block or filter Internet access to visual depictions that are obscene, child pornography, or harmful to minors. The Schools and Libraries Division is expected to issue guidance in spring 2001 to implement this Act. Further information about the law will be on the Schools and Libraries Division web site at www.sl.universalservice.org, and will also be available on the website of the Office of Non-Public Education.

Further Information

• For more information about the E-rate, go to the Schools and Libraries Division (SLD) website

• If you have questions about the E-rate, call the SLD Client Service Bureau at 888-203-8100, or fax 888-276-8736. To obtain SLD documents, call 800-959-0733. You can also direct questions and comments to comments@universalservice.org.

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