I. eRate Solutions, L.L.C.

Where is eRate Solutions, L.L.C. located?
eRate Solutions, L.L.C. operates out of its facility at 506 E. 23rd St. in Lawrence, KS. Any mail to be sent should be directed to our PO Box 1426 Lawrence, KS 66044

What are the services eRate Solutions, L.L.C. provides?
The service eRate Solutions, L.L.C. provides is intended to replace nearly all of the E-rate related duties once handled by the technology director or team of office professionals. We will assign the district an account representative who will spearhead the process for the applicant. Using their in depth knowledge of this program they will provide a service which will allow the district to receive a timely Funding Commitment Decision that includes all that the E-rate Program has to offer. Additional information regarding our service can be found in the “Services Offered” section of the website. http://eratesolutions.com/servicesoffered.html

How is eRate Solutions, L.L.C. Compensated for the service they provide?
In a standard agreement, eRate Solutions, L.L.C. utilizes a percentage based fee structure system for their services. This percentage is based on several contributing factors. However it is primarily based on the district’s history with the E-rate Program and by using the “eRate Solutions Sliding Fee Schedule” (trade secret). This sliding fee schedule is a multi-tiered pricing level system that allows a customer to sign into a single year contract or multi-year agreement (Multi-year agreements may not exceed 3 years) at a discount.

When considering this pricing method please be advised of the following advantages to this type of agreement:

• This percentage cost for the service is based solely on the amount of the Districts E-Rate Discount Award determined by the Funding Commitment Decision Letter. There are no additional charges such as hourly rates or onetime charges attributed to our service.

• As the customer you may elect to either cancel or reduce any FRN(s) (Funding Request Number) value, and the compensation due to eRate Solutions, L.L.C will be reduced. eRate Solutions, L.L.C. will review the Funding Commitment Decision Letter with the district and allow thirty (30) days for said elections.

• There is no cost for our service until you receive a funding commitment letter.

• Typically a School Districts total cost for our services is a fraction of what you would receive in E-rate Discounts within the first month of coverage. Furthermore at the time the first invoice is due you may choose to make payments to eRate Solutions, L.L.C. in quarterly installments.

How can I request a copy of the eRate Solutions, L.L.C. Service Contract and a quote?
To request a copy of the contract and a quote from eRate Solutions, LLC please call us at 1-866-33E-rate (333-7283).

What will the School District or Library be responsible to provide?
eRate Solutions, L.L.C. requires the school district to review the applications once prepared and certify that they are an accurate depiction of the school districts needs with a signature.

The school district will need to provide documentation such as student counts, copies of bills and any additional information as it relates to the E-rate request.

To remain vender neutral eRate Solutions asks that the school district maintain the responsibility of writing of the technology plans and the review of the competitive bids. Your consultant will be on hand to discuss and aid you with the options you have available during this process.

Does your service include writing technology plans?
eRate Solutions, L.L.C. does not typically include the writing of the technology plan in its service. eRate Solutions’ service contract covers every aspect of the filling process. However to remain vender neutral eRate Solutions asks that the school district take part in the writing of the technology plans and the review of the competitive bids. Your consultant will be on hand to discuss and aid you with the options you have available during this process in how it relates to the E-rate.

Will eRate Solutions, L.L.C. be reviewing the competitive bids?
Your consultant will be on hand to discuss and aid you with the options you have available during this process in how it relates to the E-rate. However in order to remain vender neutral we request that there be a responsible party at the school district or library made available to review the bids, choose their service provider and execute service contracts.

II. The E-rate Program

What is the “E-rate” and the “E-rate Program”?
The E-rate (short for “education rate”) was created by the Telecommunications Act of 1996. Under this law, schools and libraries can qualify for discounts on a wide variety of telecommunications, Internet access and internal connections products and services.

A program description has been provided by the Schools and Libraries division an can be located at http://sl.universalservic 7801(18) and (38).

Must not operate on a for-profit basis

Must not have endowments exceeding $50 million.

Libraries – are only considered eligible if they meet the statutory definition of library or library consortium found in the Library Services and Technology Act, Pub. L. No. 104-208, sec. 211 et seq., 110 Stat. 3009 (1996) (LSTA) and must be eligible for assistance from a state library administrative agency under that Act. Please note that only libraries whose budgets are completely separate from that of a K-16 school are eligible to receive the discounts.

Are private and religious schools eligible for support?
Yes, E-rate discounts are available to private schools on the same basis as their public counterparts. Provided that they meet similar requirements of eligible public schools, these requirements are the following.

Operated on a not-for-profit basis

They must not have an endowment greater than $50 million. Religious schools can also qualify, as long as they meet those criteria.

What products or services are eligible?
Schools can apply for discounts for three categories of service “Telecommunications Services”, “Internet Access” and “Internal Connections”. The most current Eligible Services List released on 10/10/03 describes and defines these services and the conditions in which they are eligible. This list is available in Adobe Acrobat Format http://sl.universalservice.org/data/pdf/EligibleServicesList101003.pdf

How much money is available in E-rate?
Up to $2.25 billion in E-rate discounts can be made available each year. First priority is given to requests for support for telecommunications services and Internet access. When all eligible requests for those services are fulfilled, the program supports requests for internal connections products and services, with top priority given to the neediest applicants.

Where does the money come from?
Telecommunications companies are required to contribute a portion of their revenues to the Universal Service Fund, which is sometimes passed on to the end user on their bill. The Universal Service Fund was originally created to provide telephone services to rural areas at a more reasonable price. The program has now been redefined to also use these funds to support the cost of telecommunications services for schools, libraries, and rural health care providers.

How is the discounted rate determined?
The discount rate is based on a school’s economic need based on the number of children eligible for the free and reduced lunch program and whether entity is located in an urban or rural area. The discount level is determined by the percentage of students who are eligible for free or reduced-priced lunches under the federal school lunch program. There are optional counting mechanisms available to those schools that don’t participate in that program such as survey. A libraries discount rate is determined by the school district or districts in which they are located.

The following table is used to determine your percentage discount for each individual school. Shared services use a shared or average of the discount percentages.

How does the school or library determine its obligation?
Schools and libraries are required to pay the undiscounted portion of the cost of their awarded eligible services. For instance, if a school district qualifies for a 80 percent discount on the cost of their service, the district would have to provide the remaining 20 percent of that cost. The rest would be covered by the Universal Service Fund Administrator. However, schools and libraries must be able to provide documentation that shows that they have budgetary allotment or made other financial arrangements to cover their obligation.

Additional details on the applicant’s obligation to pay Non-Discounted Portions of E-rate covered products or services can be found at http://www.sl.universalservice.org/reference/obligation.asp

Can an applicant use a private grant to fund their obligation of e-rate?
Yes, the school district can us a private grant to pay the non-discounted portion of the E-rate purchase. The district must show that these funds are, or will be, part of your annual budget; or, if you are obtaining the funds from an outside source, that these funds have been promised to you. If you obtain these funds from an outside source, the funds must not come directly or indirectly from your service provider(s).

Additional details on the applicant’s obligation to pay Non-Discounted Portions of E-rate covered products or services can be found at http://www.sl.universalservice.org/reference/obligation.asp 254(h) and (l).)

Updates to the how CIPA is interpreted and applied to Applicants may arise from time to time and will be posted to the “What’s New” and “CIPA” area of our website.

What are the dates for the funding year 2004 (Year 7) filing window?
Funding year 2004 (Year 7) covers services being requested from July 1, 2004 through June 30, 2005. The 471 window has opened as of 12:00 PM EST on Wednesday, November 5, 2003. The window will remain open for 90 days and close at 11:59PM EST on Wednesday, February 4, 2004. The deadline for having a Form 470 posted to the SLD’s website in order to meet the 28 day posting period for competitive bids is January 6, 2004.

What are the dates for the funding year 2003 (Year 6) filing window?
Funding year 2003 (Year 6) covers services being requested from July 1, 2003 through June 30, 2004.The Form 471 were to be filed during the “Filing Window” which ran from 12:00 PM EST on November 5, 2001 and closed on 11:59 PM EST on January 17, 2002.

What is Dark Fiber and is it eligible?
The Eligible Services List that the SLD has provided advises the following

“Dark fiber refers to fiber optic cable for which the service provider has not provided modulating electronics, i.e., it is “dark.” In some cases, this communication capacity will be leased to organizations that will add their own modulating electronics.

The FCC has not resolved whether unlit dark fiber is a telecommunications service. Pending resolution of this issue, it is not eligible for funding. (Effective for Fund Year 2004 and later years)”

The service of Dark Fiber is currently under review by the FCC. Although it had been eligible under pervious years, until this issue is resolved it will remain as not eligible for funding.

Once installed can purchased equipment be moved that was funded by Erate?
The FCC prohibits all transfers of equipment for a period of three years from the purchase date. Three years or more after purchase, such equipment may be transferred, but not in consideration of money or anything else of value. Also, in the limited circumstance when the location where the equipment was originally installed is temporarily or permanently closed, the equipment may be transferred to another E-rate-eligible entity regardless of discount level.

What is Erate Termination Act?
The Erate Termination Act is a bill introduced into the House of Representatives in March 2003. Sponsored by Colorado Republican Tom Tancredo, the measure would end the eRate immediately and remove all mention of it from the Telecommunications Act of 1996, the law that authorizes the program. Tancredo had introduced a nearly identical bill in 1999 during the 106th Congress, but it never advanced. This act had been launched do to what was believed to be ramped abuse of the program.

The Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC) has created a Task Force on the Prevention of Waste, Fraud and Abuse. This Task Force will identify areas where improvements can be made in the support mechanism and in outreach and training and will recommend specific actions to combat potential waste, fraud and abuse by both service providers and applicants.

Additional information about the Task Force and its findings can be located at http://sl.universalservice.org/taskforce/

Can an applicant use equipment trade-ins to fund their obligation of e-rate?
No, however the applicant may opt to use the value of the trade-in to reduce the pre-discount cost of the new equipment. For example, if the new equipment costs $800 and there is a trade-in worth $300, this equipment should be reported as costing $500. If in this example the applicant has a 50% discount, the E-rate would then cover 50% of the $500.

Additional details on the applicant’s obligation to pay Non-Discounted Portions of E-rate covered products or services can be found at http://www.sl.universalservice.org/reference/obligation.asp

What is The Children’s Internet Protection Act (CIPA)?
The Children’s Internet Protection Act (CIPA) was signed into law on December 21, 2000. In order to receive discounts for Internet Access and Internal Connections services under the universal service support mechanism, school and library authorities must certify that they are enforcing a policy of Internet safety. The Internet safety policies must include measures to block or filter Internet access for both minors and adults to certain visual depictions.

Beginning with Funding Year 2001 (the Funding Year beginning July 1, 2001) schools and libraries applying for Internet Access or Internal Connections must certify on a Form 486 that they are in compliance with the requirements of CIPA or that they are undertaking such actions to comply with the requirements of CIPA prior to the start of the following funding year. Although CIPA requirements do not apply to Telecommunications Services, Billed Entities applying only for Telecommunications Services must, in general, still certify on a Form 486 that CIPA requirements do not apply. (For more information, see the Children’s Internet Protection Act, as codified at 47 U.S.C. e.org/data/pdf/ERate_Discounts.pdf

An overview has also been created and can be found at http://sl.universalservice.org/data/pdf/ERATE_DISCOUNTS_FOR_SCHOOLS_AND_LIBRARIES.pdf

Who administers the funding process?
The Schools and Libraries Division (SLD) of the Universal Services Administrative Company (USAC) manages the E-rate program. The Federal Communications Commission (FCC) creates the overall policy for the program.

Who is eligible to receive the discounts?
Schools – for a school to be considered eligible, it must meet the following requirements.
Must meet the definitions of a elementary or secondary school as defined by the No Child Left Behind Act of 2001, 20 U.S.C.