The E-Rate program was created as a result of the Telecommunications Act of 1996 and, according to Wikipedia, has provided discounts on services to over 100,000 schools that have participated in this program. With a 2.25 billion dollar (plus inflation) annual funding cap, this program has provided significant funding to schools over the last 20 years.
The process for applying for E-Rate discounts has moved primarily from paper to online forms fairly soon after the program was created. The basic procedures and processes have remained mostly unchanged since the inception of the program until last year.
The recent changes to the E-Rate programs are so far reaching that they have been dubbed “E-Rate 2.0.” A summary of the changes can be found on the FCC website; https://www.fcc.gov/general/summary-e-rate-modernization-order.
A key element of the update that impacts participants is the overhaul of the website and workflow processes. This includes an entirely new portal called the E-Rate Productivity Center; known as EPC and pronounced EPIC, E-Rate 2.0 attempts to leverage the value that consortia bring to the procurement process by driving down costs by aggregating demand.
Some of the ideas initially discussed included additional discounts to consortia members and priority review of consortia applications. Neither of these materialized in the revised program. As it currently stands it seems that not only are consortium applications not moving to the front of the review line, they are actually being sent to the back of the line due to the way applications are processed under the new rules.
Sometimes great ideas get implemented poorly. There are quite a few examples of that with E-Rate 2.0. I will give two examples. First, the form 471 no longer exists as a form but a series of web pages where data is entered. That is a step in the right direction, but there is no longer any way to see everything that you have entered on your 471 “form.” The only way to see all of your data is to log into the USAC website and click through the series of web pages to see what you entered. I previously relied on a PDF copy of my 471s for quick and easy access to information, as well as archiving a copy with my required E-Rate documentation. I hope that a future version of the website will once again allow me to see all the 471 data in a single document.
The second example is the discount calculation methods. Previously when a school was part of consortia, the school entered their own data for any services that they were purchasing directly, and the consortia lead entered all the data for all the schools receiving services via a consortium. This double data entry is eliminated with the new 471. Now schools enter their data on the USAC website, and that data flows onto the consortium application. Awesome concept, but it results in consortia applications being reviewed last.
Schools need to have their data entered on the USAC website in order to file their 471. Consortia leads do not, indeed cannot, change the data for individual schools. They also cannot file their 471 until all of their schools have updated their school data. Since schools can wait until the last day of the filing window to update their data and file their 471 and consortia applications are due on the same day as school applications that can lead to a situation where the consortia lead has no window in which to actually file the application on time.
Thankfully, most applicants do not wait until the last day to file; but it only takes one to hold up the entire consortia application. Larger applications, like a statewide network that may have hundreds of schools on it, could be a real issue. Getting the application filed on time is only one hurdle.
The data entered for each school is reviewed and possibly modified by USAC during the review process. Since the discount calculation is based on this data, funding commitments cannot be generated until all the data had been reviewed. That will mean that all schools that participate in a consortium will need to have their individual review completed before the consortia application can be funded. This dependency will push consortia applications to the back of the review line. Even a single school that has an issue with their discount calculation could cause lengthy delays in funding a consortia application.
So what is the solution? Perhaps after we get through the fiscal year 2016 cycle, we all will have a better handle on how significant these delays will be. They will almost certainly delay projects that are contingent on E-Rate funding, but otherwise may not have serious issues for schools as long as the delay does not cross fiscal years or there are not cash flow issues at schools.
Perhaps the consortium 471 could be due a few weeks after the individual school 471 due date. Or E-Rate could be changed from a discount program to a block grant program. The budget caps on Category 2 services seem to be a first step in that direction. Why not just create Category 1 caps too and send funds directly to each school based on their own poverty level data and number of students served. Schools could then either purchase service directly from a provider or as part of a consortium.
Time will tell how this all works out. In the mean time some folks have been referring to EPIC as EPIC FAIL due to all of the issues during this first year implementation. Perhaps some day it will change from EPIC FAIL (Faults In All Locations) to EPIC SUCCESS (Simple Uniform Cash Contributions Eliminating Silly Steps).
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