Schools and Libraries

Step 6: Eligible Services Framework

Overview of Product and Service Eligibility

Only certain products and services, used in certain ways, are eligible for Schools and Libraries Program support. Eligibility is based on criteria established by statute and Federal Communications Commission (FCC) rules.

The following is an overview of product and service eligibility and includes references to other documents that provide additional details. Product and service eligibility highlights include:

  • How a product or service is used can affect whether or not the product or service is eligible.
  • Each of four separate categories of service (telecommunications, Internet access, internal connections, and basic maintenance of internal connections) has its own rules for eligibility.
  • Details about funding priorities, competitive bidding, and internal connections eligibility should be understood by applicants.
  • The Eligible Services List contains further information to guide applicants and service providers.

The Conditional Nature of Eligibility

Eligibility for support requires not only that the product or service is eligible, but that it is put to an eligible use and that it is used by an eligible school or library entity at an eligible location.

The Eligible Services List is one of the key documents that indicate the products and services that can receive funding and the acceptable uses for those products and services. For example, the Eligible Services List indicates that some types of software - such as software for a network operating system - can be eligible for support, while other software - such as application software for word processing - is not eligible. Another example on the Eligible Services List indicates that cable for connecting classrooms to a network can be eligible, but cable for electrical wiring is not eligible.

An entry on the Eligible Services List indicates whether a product or service is eligible and under what conditions that product or service is eligible.

The Four Categories of Services

FCC rules indicate that funds will be available for four eligible categories of service: telecommunications services, Internet access, internal connections, and basic maintenance of internal connections.

 First Priority for Funding (Priority 1 Services)

Telecommunications Services

These are services that are used to communicate information electronically between sites. The services must be provided by a telecommunications carrier - i.e., an organization recognized by the FCC as providing telecommunications services on a common carrier basis. Examples of telecommunications services include basic telephone service and digital transmission services such as T-1 lines.

Internet Access

"Basic conduit access" to the Internet including e-mail is eligible for discount and can be provided by a telecommunications carrier or any commercial organization.

Second Priority for Funding (Priority 2 Services)

Internal Connections

Internal connections consist of the wiring and components that expand data access within a school or library such as to individual classrooms within a school. Internal connections can be provided by any commercial organization.

Basic Maintenance

Basic maintenance of internal connections consists of services "necessary to enable the continued operation of the eligible equipment." It includes: repair and upkeep of eligible hardware, wire and cable maintenance, basic technical support, and configuration changes.

 

In addition, the FCC has determined that a voice mail service can receive support in the telecommunications or Internet access category and voice mail products can receive support as internal connections.

Further Details

Under FCC rules, requests for telecommunications services and Internet access (Priority 1 services) are funded first, and remaining program support is then applied to approved requests for internal connections and basic maintenance of internal connections (Priority 2 services). Because of this prioritization, not all requests for Priority 2 services will necessarily receive support. Support in these categories begins with the most economically disadvantaged schools and libraries based on criteria established by the FCC.

Competitive Bidding. Successful funding requires a competitive bidding process that is initiated using the Description of Services Requested and Certification Form (Form 470). Once the applicant has selected the most cost-effective bid, the actual requests for support are submitted using the Services Ordered and Certification Form (Form 471) during a specific filing window for each funding year. Form 471 can consist of one or more individual funding requests. Each funding request indicates the products and services ordered, the cost of those products and services, and the service provider that has been selected as most cost-effective.

More about Internal Connections. Internal connections is the only program category that allows for the purchase of components by the applicant. The FCC has provided the following guidance to distinguish between eligible and ineligible components:

  • Components are eligible only if they are necessary to transport information all the way to individual classrooms or public areas of a library. That is, the service is an essential element in the transmission of information within the school or library.
  • Support is provided for such items as routers, hubs, some types of network file servers, and wireless local area networks (LANs), and their installation and basic maintenance. Eligible components are intended to serve as a conduit for the transmission of information. For example, file servers may not be used principally to supplement storage requirements of personal computers on a network but may be used to facilitate Internet access by maintaining a database of Internet addresses (i.e., serve as a Domain Name Service). See the Eligible Services List.
  • Support is not provided for equipment that is not needed to transport information to individual classrooms. Examples include personal computers in the classroom, fax machines, modems in personal computers, and asbestos removal.
  • The purchase or building of a Wide Area Network is not supported as Internal connections. However, the leasing of services that provide Wide Area Network capability may be eligible under the other program categories such as telecommunications services or Internet access.

Additional Reference Information

  • The Eligible Services List provides additional specificity about products and services that may receive E-rate discounts.
  • The Eligible Products Database provides greater detail than the Eligible Services List for some specific makes and models of internal connections products that manufacturers indicate are eligible for discounts.
  • Item 21 Attachment. The attachment to Form 471 that is submitted to USAC with the details of the products and services for which discounts are requested is known as the "Item 21 Attachment." A clear description of the products and services desired can be a key factor in an efficient USAC review of funding requests.
  • Cost Allocation Guidelines for Products and Services provides information on how to cost-allocate products and services that include both features that are not eligible and features that are eligible. Funding for the eligible portion can be provided in some cases.
  • "Two Out of Five Rule" for Internal Connections. An entity (school or library location) can only receive internal connections funding every two out of five years. However, support for the basic maintenance of eligible internal connections components is exempt from this restriction and can be obtained each funding year.
  • Free Services Advisory. Applicants must ensure that funding requests meet FCC program rules and are not used in a manner that constitutes waste, fraud, or abuse of program funds. Free services, kickbacks, or other methods that subsidize the procurement of ineligible components or enable other prohibited practices can cause denial of funding requests and, in some cases, lead to enforcement action by the Department of Justice.
  • Service Substitutions and SPIN Change Guidance. Sometimes applicants wish to change the specification of the products and services for which they have received discounts or to change to a different service provider. Within certain limitations, such changes can be made. (SPIN is an acronym for Service Provider Identification Number.)
  • Transfers of Equipment. The ability to transfer components purchased with discounts to other entities or locations is restricted.
  • Wide Area Network (WAN) Fact Sheet and On-Premise Priority 1 Equipment. The lease of digital transmission lines that accomplish a wide area network (WAN) can be eligible for support but FCC eligibility requirements for WAN configurations can be sophisticated. For example, in some cases an arrangement that is labeled a "lease" of WAN services reaches essentially the same result as the purchase of WAN facilities by applicants, which are ineligible for support. In addition, while components at the applicant site are generally evaluated for support as internal connections, in certain limited cases such components can be considered part of a Priority 1 service - i.e., part of a telecommunications or Internet access service.
  • Frequently Asked Questions about Eligibility of Products and Services contains additional information about product and service eligibility. In addition, the Reference Area provides an alphabetical listing of documents with further details.

Last modified on 2/22/2008