From OPLIN
The Latest on E-Rate
Hello E-Rate Community, |
| As many of you have heard, the American Rescue Plan Act of 2021 includes the Emergency Connectivity Fund (ECF) which will provide over $7 billion in additional E-rate funding. |
| As of right now, we have more questions than answers, but here’s what we do and do not know about the new “ECF” program: |
| The new legislation requires the FCC to implement regulations within 60 days (i.e., by May 10th). The FCC issued a Public Notice (DA 21‑317) with a request for comments that were due April 5th and reply comments due April 23rd. |
- The program will fund purchases of eligible equipment and/or advanced telecommunications and information services for students, school staff, and library patrons at locations other than the schools or libraries, i.e., off-campus. Eligible equipment is defined to mean:
- Wi-Fi hotspots defined as devices utilizing the standard 802.11 (or successor) networking protocol. Arguably, these could be individual single-user hotspots or multi-user community hotspots.
- Modems and/or routers.
- Connected devices (laptops, tablets, or similar end-user devices).
| We would expect that the FCC’s ECF program regulations will include more details in the form of an ECF eligible services list. |
- Total funding for the program, including small set-asides for oversight and administration, is $7.171 billion. Unlike other E-rate funding, the ECF funding will come from the U.S. Treasury, not the Universal Service Fund (“USF”). This means that ECF funding will not put additional upward pressure on the already historically high USF contribution factor.
- Administratively, ECF funding remains available through September 30, 2030. Actual ECF funding, however, is for eligible products services procured during the pandemic and up to one fiscal year thereafter. For example, if the COVID-19 emergency period ends some time during the 2021-2022 fiscal year, ECF funding would continue through FY 2022 ending June 30, 2023 (perhaps September 30, 2023 for non-recuring expenses).
| The ECF legislation is silent with regard to retroactive funding. We expect this issue to be addressed in the FCC rulemaking. Unlike traditional E-rate funding with discounts of 20-90%, the ECF legislation calls for the reimbursement of 100% of the costs for eligible equipment and services with the provision that reimbursements “may not exceed an amount that the Commission determines…is reasonable.” This provision is difficult to interpret and is being left to the FCC. It could mean only that the price of any particular product or service must be “reasonable” in the same sense that E-rate rules have always required cost-effectiveness. But it might also mean that the amount of funding available to any specific applicant must be “reasonable.” In this sense, the FCC might allocate total available funding on the basis of rural/urban locale and/or NSLP eligibility, essentially establishing Category 2-like budgets for each applicant. |
- Once the FCC’s ECF rules are released in early May, we expect USAC to initiate a special ECF application cycle perhaps waiving, or at least simplifying, traditional competitive bidding requirements.
| Please rest assured that I will share the information as it is received from the FCC and will schedule webinars to make sure everyone is aware of the rules and application process. |
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