Schools and Libraries (E-Rate)

Before You're Done

Updated February 2017

Service Substitutions

A service substitution is a change in the products and/or services specified in the FCC Form 471, Description of Services Ordered and Certification Form. In certain limited circumstances, applicants or service providers may request and be approved for service substitutions. In addition, service providers or equipment manufacturers may submit a "global" service substitution.

Service substitutions encompass changes in the technical components (products, services, or both) specified in the FCC Form 471. Applicants who file service substitution requests must still comply with the deadlines for the FCC Form 486, Receipt of Service Confirmation and Children's Internet Protection Act Certification Form.

Criteria

Service or product substitutions must meet the following conditions, which are specified in FCC rules:

  • The substituted services or products have the same functionality as the services or products contained in the original proposal.
  • The substitution does not violate any contract provisions or state or local procurement laws.
  • The substitution does not result in an increase in the percentage of ineligible services or functions.
  • The requested change is within the scope of the establishing FCC Form 470, including any Requests for Proposal (RFP), for the original service.

If a service substitution results in a change in the pre-discount price for the supported service, Schools and Libraries (E-rate) Program funding will be based on the pre-discount price of the service for which support was originally requested or the pre-discount price of the new, substituted service, whichever is lower.

Example: USAC can approve an applicant's request to use 87 six-port network modules instead of a different brand of 58 eight-port network modules that were originally approved in the applicant's FCC Form 471.

How to Submit Your Request

Applicants must submit service substitution requests in the E-rate Productivity Center (EPC). For step-by-step instructions, refer to the EPC User Guide: Service Substitutions.

A service substitution is a minor modification to the original FCC Form 471. The certifications and representations made in the original application continue to apply. False statements on a service substitution request carry the same penalties as those indicated in the FCC Form 471 certifications.

Any cost change submitted by an applicant in a service substitution request will be considered a request for modification of the funding commitment, just as though the applicant had submitted an FCC Form 500, Funding Commitment Adjustment Request Form. Therefore, when USAC approves a request that includes a cost decrease, we will adjust the commitment for the affected funding request.

USAC Review

USAC review includes an evaluation of whether "same functionality" is maintained between the original and proposed new configuration, and whether the new configuration is eligible for funding. For service substitution requests involving Internal Connections, our review may first evaluate the substitution based on the function and product type for each line item in the "from" and "to" lists.

An Internal Connections service substitution request is deemed to meet FCC requirements for "same functionality" if the original and new configurations maintain consistent functions. For example, these service substitution requests meet the requirement for same functionality:

  • A network switch for a network router (Function: "data distribution")
  • A UPS for a tape backup (Function: "data protection")

USAC may only approve service substitution requests when FCC requirements for same functionality are met. USAC will respond in writing to the service substitution request, either approving the request or indicating the reason(s) why the request cannot be approved.

Deadlines

You should submit your service substitution requests after you receive a FCC Form 471 Receipt Acknowledgment Letter (RAL), and no sooner. USAC will dismiss any requests received prior to issuance of a RAL. If USAC has not completed the services portion of its application review when the substitution request is logged, then USAC will include the substitution request in the review.

The Funding Commitment Decision Letter (FCDL) includes a notation that USAC has incorporated the substitution request. If USAC has completed the services portion of its application review, we will review and act on the substitution request separately.

USAC must receive a service substitution request on or before the last day to receive service for that FRN. In general, the last day to receive service is:

  • June 30 of the relevant funding year for recurring services, and
  • September 30 that follows the close of the funding year for non-recurring services.

However, the deadline for the receipt of non-recurring services may be extended beyond the September 30 that follows the close of the funding year. If the deadline for receipt of these services is extended, the deadline for the service substitution request is automatically extended as well.

Making Corrections

If you need to make subsequent corrections to a service substitution, applicants and service providers must follow the normal service substitution procedures and timelines in order to obtain pre-approval of changes.

If USAC finds an unapproved change during the invoice review process, USAC may refuse to pay the invoice for products or services that were not originally requested. Furthermore, if, during an audit, USAC discovers different products or services from those approved, USAC may make a commitment adjustment and require that you return incorrectly disbursed funds.

If the applicant discovers that products or services delivered are different from those approved on the FCC Form 471, the applicant should file a correcting service substitution even if the discovery occurs after the last day to receive service. To ensure that a late-filed request is processed, applicants should prominently indicate that the request is a "correcting service substitution." However, applicants are strongly encouraged to file traditional and timely service substitutions when making changes in products and services whenever possible.

"Global" Service Substitutions

A "global" service substitution can involve a product and/or service that is being discontinued, has a model number change, or is being replaced. To make a "global" service substitution, the manufacturer or service provider must notify USAC of the change, along with a listing of one or more replacement products or services.

Note: "Global" service substitutions are only applicable when the product or service originally specified on the FCC Form 471 is no longer available, or is no longer being provided by the service provider making the request.

When you notify USAC, you must indicate that the new products or services are functionally equivalent to the product or service you are replacing, and that they have no increase in percentage of ineligible features. USAC encourages service providers to include a publicly-issued product announcement of the discontinuation or model number change in the letter with their request.

USAC will maintain the list of submitted substitute products and/or services. This approach will allow USAC to process future invoices with the replacement products or services, eliminating the need for many separate applicants to request the same service substitutions. Such service substitutions will not result in a change to an applicant's funding commitment.

There is no specific timeline for service providers and manufacturers to file "global" service substitutions. However, they should submit model changes as early as possible to avoid delays in invoice processing. USAC will respond in writing to the service substitution request, indicating whether the request can be granted or requesting additional information. Since a service provider-initiated service substitution does not reference any specific funding request, USAC does not automatically extend the service delivery deadline for funding requests that include these services. USAC does not provide a time extension for the completion of non-recurring services under this approach.

Service provider-initiated service substitutions are designed to accommodate replacements that USAC can substantiate as near-identical. Replacements that cannot be substantiated as near-identical cannot be accommodated with this approach. However, if a service provider is aware of similar changes among many of its customers, it can facilitate a service substitution among these customers by providing similar service substitution requests, which are consistent with the previous sections of this document, to the customer for them to submit and sign. Such similar requests may be sent in one request to USAC.

Applicants do not need to make any filing to USAC for a service substitution request that was initiated by a manufacturer or service provider. However, the change must be consistent with the establishing FCC Form 470, the RFP (if any), and state and local procurement laws. USAC recommends that service providers supply each affected applicant a copy of USAC's approval letter, and that applicants keep this copy on file in the event of an audit.

USAC's determination that it will process invoices with the replacement configuration does not change any contractual requirement between applicants and service providers. That is, applicants are not forced to accept a modified configuration that is not anticipated by an agreement or contract with their service provider.