Insider E-Rate Tips for Both Novice and Experienced Filers
By James Punderson, K12USA founder and CEO
Disclaimer: The first paragraph can safely be skipped by those who know what the E-Rate is.
For all those who may have been out of town for the last four years, the E-Rate is a $2.25 billion per year federally administered program of discounts from 20% to 90% on telecommunications services (phones, pagers, and T-1 lines for example); Internet-access charges, as well as computer network and telephone wiring; and equipment and labor charges (both installation and maintenance). It is limited to K–12 schools (public and private) and public libraries.
And Now For Something Entirely Different
This is not going to be yet another recitation of the history and the mechanics of the E-Rate program. It is not going to be a celebration of the wonderful things accomplished by the E-Rate program, and it is certainly not going to urge you to participate in the E-Rate program. (Been there, did that, and got the T-shirt last month.)
Instead I’m going to try and put myself out of a job. You see, our company spends a great deal of time shepherding school districts through the entire E-Rate process. But with approximately 15,000 public schools (and almost twice as many private schools), we can’t be everywhere and we don’t want any schools to miss out on the E-Rate money. So without further ado, here’s a list of things you have to do as well as things you have to not do:
If You Want an Extension Call the IRS
If there’s one thing the conscientious bureaucrats at the Schools and Library Division agree on, it’s that if you miss the deadline, you lose. Period. End of story. You’d have better luck with the IRS, so get the all timelines right.
Form 470: Name, Rank, and Serial Number Only
Don’t struggle with this form; it’s a piece of cake. Basically it’s just a wish list, an expression of interest in all the things you might possibly ever have thought about. Make it as general as possible. There’s no prize if you only list the specifics of what you will probably end up getting. If you try to be too specific, you will run the risk of forgetting something or something new will come along, and if you haven’t laid the foundation by including sufficiently general information on your Form 470, you may be out of luck for another year in terms of getting discounts. Goods and services change quite a bit between the beginning of the application process and when you are going to be purchasing them.
Salesmen Will Call; They’re Allowed
One of the only “strings” attached to the E-Rate program is that vendors are not only allowed but also encouraged by the E-Rate program to participate in the process. The information you supply on your Form 470 is posted on the E-Rate website for vendors to use to contact you. The purpose is to let you know what is available so you can get the best, most cost-effective solution.
So if you receive email, phone calls and faxes, please remember they are not unsolicited. It may be irritating to you especially if you believe you already know exactly what you want and from whom you want to buy it. However, the E-Rate is an open program and the vendors are doing nothing wrong by contacting you, so try to be patient. You just might change your plans after you hear other proposals.
The Rules Change Every Year; Work the Angles
Most public schools and many libraries are finally getting their E-Rate act together and applying for ever-increasing amounts of eligible services and equipment. But because the total amount is capped at $2.25 billion, the applications far exceed the amount available. Under the FCC rules currently in effect, the higher-priority categories of telecommunications services and Internet access are going to end up using all the money. Assuming those rules don’t change, your strategy should be to accomplish as many of your technology goals with services that fall within the high-priority categories of telecom and Internet, which are still completely funded for all schools.
For instance, where two years ago, any district no matter what their discount level could have applied for and been granted their full discount on purchasing a mail server, buying mail-server software, hiring an outside contractor to set it up and a contractor to maintain it, last year only districts with a discount of 83% or higher could get that funding. As we speak, it looks like only districts with 90% discount will get such funding for this year. But, if instead of buying a mail server yourself, you contracted with an outside party to supply email accounts, then your email would fall under the fully funded Internet-access category. So you would still be able to get funding to accomplish the same objective.
Form 471: Keep Your Story Straight
Forget what I said about the Form 470. Now you can, and you must, be specific. Very specific. There will be a quiz. On this form you must provide details of the services you are buying. Who, what, when, and where to be precise.
The rules say you can’t agree to buy any services or file the Form 471 until after the required 28-day waiting period following the filing of the Form 470. Make sure all your pieces of paperwork (contracts, proposals, invoices, purchase orders) are consistent with each other. Not doing that is just about the easiest way to lose your discount. Unlike dealing with the IRS, everyone gets audited.
Round Up the Usual Suspects
The E-Rate process does not replace the rules governing purchases in your state. You must comply with all of them in addition to the 28-day waiting period. You can still buy your services from your normal vendors so long as you can legally do so. You are not absolutely required to buy from the lowest-cost vendor unless your state requires it. You do have to buy the most cost-effective solution to satisfy the E-Rate rules. It gets a little murky but “cost-effective” is not considered to mean exactly the same thing as cheapest.
Don’t Go Out on a Limb
The E-Rate people have been absolutely horrible about making timely funding commitments. If you won’t have the money or won’t want to buy a service if you don’t get the E-Rate discount, be sure and make your contract contingent on the discount. Reserve the right to cut back or completely do away with the purchase in the event you don’t get the discount. And get it in writing.
For the fourth year in a row, the SLD is w-a-a-a-y late making awards, once again after promising to be more timely and once again putting school in the Russian roulette position of either waiting to make sure they have funding before proceeding or taking a chance so service won’t be interrupted. The SLD’s handling of the process is quite like the famous yearly Peanuts cartoon where every year, Lucy promised she would hold the football for Charlie Brown to kick and every year as he ran up to kick the ball, she would quickly snatch it away, and he would end up flat on his back.
Play Nicely With the Other Children
The E-Rate program is capped at $2.25 billion. Just because your district has a high discount is no reason to buy more of something than you need. You will still be wasting some of your local money and you will be depriving other districts of funds that they can use.
You Have to Have a Plan
To participate in the E-Rate program you have to have an approved technology plan. But, and here’s the gotcha, the approval is only good for three years. Watch out for that. And new for this year, you also have to have a plan for how you will comply with the Children’s Internet Protection Act (CIPA).
Their Dog Will Eat Your Homework
It happens. They routinely lose all or parts of your paperwork. They seem to specialize in losing the signature pages but just for a change of pace they occasionally misplace the entire application. Be sure to retain a complete copy of the fully executed document and send via FedEx or postal mail with proof of mailing and receipt. Oh yes, also sign the documents you send them with colored ink. They have in the past rejected paperwork that they were convinced didn’t have a manual signature. (Of course later, they accepted faxed documents but we won’t mention that.)
One Year at a Time
You are allowed to sign multi-year contracts, but we don’t recommend it because there’s no multi-year funding guarantees—so you might end up on the hook for the entire cost after the first year. And in case you haven’t noticed, most telecommunications and technology areas (and especially their pricing) change so fast you may very well regret having signed the multi-year contract. Our advice: don’t!
Don’t Change Horses in the Middle of the Stream
According to the FCC, you are allowed to change vendors after funding has been awarded. All it takes is a doctor’s certificate, a notarized note from your mother, and then it may take the SLD a year or two to respond to your request. The aggravation is usually avoidable because the reason for these requests is often carelessness in that the change could have been timed to coincide with the E-rate funding year. Save yourself a lot of aggravation: If you want a new vendor, July 1 is a great time to start. In fact, any time you make a telecommunications, Internet, or technology decision, you really should stop to consider its effect on the E-Rate funding it might be eligible for.
“You Screwed Up, You Trusted Us”
The SLD is just like the IRS in this respect: If they give you advice, they won’t stand behind it. To make it worse, they employ a great number of people who do not have a clue what the items on your forms are, so be prepared for inane and dumb questions. To make it even worse, they frequently won’t identify themselves or give you any way to contact them again. You should try and get anything they say in writing. Good luck!
Form 486: Don’t 86 it
If you don’t send this form in, the vendor can’t get paid, and if the vendor doesn’t get paid, you don’t get your money. But if the service is unsatisfactory or delayed, don’t be in a rush to file this form; it’s your leverage over the vendor (assuming you haven’t already paid the full amount).
Form 472: They actually call it the BEAR Form
If you are unsuccessful in getting your vendors to give you your discount upfront then you will have to pay them in full and get reimbursed later. The way that works is they have to collect the money from the SLD and you will have to collect it from them. The BEAR form is how you do that. The sooner you file it, the sooner you get your money. (Don’t ask me why the FCC decided you can’t get the money directly. Makes no sense.) Nuff said.
Making a List and Checking it Twice
You might think that if you made a simple clerical mistake on one of the forms you would be allowed to fix it. Wrong! But you might still think that if they made a clerical mistake in handling your application that they would fix it. Wrong again. They may tell you that you have to file an appeal in writing. Who do you think you file the appeal with? If you guessed “them,” you are correct. If you’re not happy with the result, you can appeal to the FCC in Washington.
An Appealing Strategy
Listen carefully. It is crucial—I’m not kidding about this—that appeals be filed within 30 days or you lose. Simple as that. Of course, they have taken years (literally) to respond to appeals, so don’t hold your breath. Best strategy: Don’t make clerical mistakes. Measure twice, cut once as the old-time carpenters used to say.
Show Me the Money
There you have it folks; you too can be an E-Rate consultant. On a more serious note, if you follow the directions on the Schools & Libraries Universal Service Administrative Company website and use what you’ve just read, you should be able to get through the whole E-Rate process without developing high blood pressure. And how many grant applications do you fill out where you know the effort will pay off?
But Don’t Just Go Though the Motions
If you don’t follow through all the way to the end, you will have wasted your time and have nothing to show for it. As the Yoda character said in the Star Wars movie, “Do or do not. There is no try.”
James M. Punderson IV, M.Ed., is a former teacher, school board president, network engineer, and author. He is the founder of K12USA.com, an educational technology and E-Rate consulting company providing Internet-based software services exclusively to schools. He can be reached at firstname.lastname@example.org.
Article originally published in Inside Education, December 2001.