A1: Starting in FY2015, requests for Category Two funding – that is, internal connections (IC), managed internal broadband services (MIBS), and basic maintenance of internal connections (BMIC) – are limited to a budget based on the number of students in a school or the number of square feet of a library outlet. A school or library can decide if it wants to spend all of its budget in one year or if it wants to spread it out over any of the five years. Additionally, the school or library can decide if it wants to use all of its Category Two funding on one of the three service types, or for a combination of all three. For example, you could request the entire Category Two five-year budget in FY2015 for just internal connections products, or you could divide up your request over multiple years and request support for IC, MIBS, and BMIC products and services.
A2: Individual schools are eligible for E-rate Program discounts on pre-discount purchases of up to $150 per student over a five-year budget. To ensure that all schools receive sufficient support, there is a pre-discount funding floor of up to $9,200 over five years for each school.
A3: Depending on their IMLS locale codes, libraries qualify for one of two different budget rates. Libraries that are located in the IMLS locale code of 11-City, Large, 12-City, Midsize, or 21-Suburb are eligible for a pre-discount budget of up to $5.00 per square foot over five years. All other libraries are eligible for a pre-discount budget of up to $2.30 per square foot over five years. To ensure that all libraries receive sufficient support, there is a pre-discount funding floor of up to $9,200 over five years for each library outlet.
A4: The Category Two budget is pre-discount. Even though all schools are eligible for $150 per student, a school with an 80 percent discount rate will be eligible for $120 in E-rate Program support per student, while a school with a 40 percent discount will be eligible for $60 in E-rate Program support per student.
Similarly, a library eligible for $5 per square foot with an 80 percent discount rate will be eligible for $4 in E-rate Program support per square foot, while a library eligible for $5 per square foot with a 40 percent discount rate will be eligible for $2 in E-rate Program support per square foot.
A5: No. FY2015 is a clean slate. In FY2015, all schools and libraries will be eligible for the full amount of their five-year budgets.
A6: The Category Two budgets are in effect for schools and libraries that receive Category Two funding for one or more funding years between FY2015-19. The first year that an eligible school or library receives E-rate Program support will be the first year of its five-year funding cycle.
A7: No. Although the Category Two request limits what the E-rate Program will pay for, you can spend more than your Category Two budget as long as you pay for those additional products and services out of your own pocket.
A8: No. You decide how to spend your Category Two budget. You can, for example, choose to spread your budget evenly over five years, or you can spend your entire budget in the first year, regardless of the Category Two service type. Remember that if you have a multiyear contract, you can only receive reimbursements for the portion of the contract that is delivered during the funding year. You will have to request E-rate Program funding for those services annually.
A9: Yes. If you find that you will not spend the entire amount of Category Two funding that USAC has committed in a particular funding year, you can file an FCC Form 500 to return unused funds. School districts and library systems may need to provide additional information so that you and USAC are in agreement about the impact on a particular school or library outlet's five year budget.
A10: In the new online FCC Form 471, you will indicate which school or library is getting the products and services in an FRN. For Category Two FRNs, you will have to indicate how much of the FRN line item costs should be allocated to each school or library. A single FRN line item for the same product or service can include multiple schools or libraries, each with their own cost allocation.
A11: No, Category Two funding must be spent for the specific school or library for which they are allotted. These funds cannot be shifted or averaged across your school district or library system.
A12: Transferring equipment is prohibited unless (1) three years have passed since the services were purchased or (2) the equipment is being transferred from a school or library that closed. Applicants transferring equipment from a school or library that closed to another eligible school or library must notify USAC of the transfer.
A14: Yes. If you need to request a service substitution, remember to follow the guidance on USAC's website to request approval for such substitution requests.
A15: No, NIFs do not get their own Category Two budget because a NIF is not a school or a library.
A16: Although NIFs do not get a Category Two budget of their own, to the extent that a NIF houses a piece of shared equipment that is essential to connecting a school's or library's network to the Internet, the cost of that equipment can be allocated between the budgets of the schools or libraries that are sharing that piece of equipment.
If the equipment is also used by the NIF itself, then an appropriate portion of the cost must be allocated to the ineligible NIF and removed from the funding request. When completing your application, if you have shared equipment that is located in a NIF, you must indicate in the “Narrative” section of the funding request in which NIF the piece of equipment is located.
A17: No. Because NIFs are not considered schools, they do not qualify for their own Category Two budgets, even if students attend a class in the NIF. Starting in FY2015, there is no longer a distinction between NIFs and NIFs with classrooms, since all entities within in a school district qualify for the same, single discount rate and NIFs are not eligible for their own Category Two budget.
A18: No, residential facilities are not eligible for a separate Category Two budget. If, however, the residential facility is eligible for E-rate Program funding because it serves unique populations as set out in paragraph 31 of the Sixth Report and Order, the cost of the internal connections, basic maintenance of internal connections or managed internal broadband services for the dormitory can come from the associated school's Category Two budget.
A19: Yes, a school's Category Two budget is based on the school's student count, and therefore it can increase or decrease year to year.
A20: Schools may count part-time students for the purposes of determining the school's Category Two budget. However, schools should include part-time students in their student count only when doing so regularly increases the maximum number of students on the school premises at the same time during the school day. For example, a vocational school that has 100 students in the morning and 100 different students in the afternoon should report a student count of 100. Furthermore, students attending after-school activities or after-school events cannot be included in the student counts.
A21: Students who attend a virtual class that originates at a school, but who are not on the school premises, cannot be counted in that school's student count for the purposes of Category Two budgets.
A22: Acceptable third party documentation of full and part-time students can include, for example, an official state report or state website indicating the total numbers of full and part-time students, or other types of documentation held by the school or school district that will help ensure a timely review of the indicated student counts.
A23: No, schools with decreasing student counts do not have to repay funding received in prior years in excess of the current year's budget. There is an exception, however, for new schools, as discussed immediately below.
A24: If you are applying for a new school that has not yet opened, you can determine your Category Two budget based on an estimate of the number of students that will attend that school in the upcoming funding year. However, in order to decrease the incentive for schools to overestimate student counts to obtain more funding, these schools will be required to repay USAC in the subsequent funding year for any E-rate Program support received in excess of the available budget based on the actual student enrollment. The school should report the actual student count to USAC within the year. USAC will follow up with the schools to determine their actual student enrollment counts and will seek recovery of funds if necessary.
A25: A new school may request Category Two services based on the estimate of 1,000 students, but it will have to repay any support received in excess of available funding based on actual enrollment.
Five-year Pre-discount Budget
Five-year Post-discount Amount
1,000 * $150 = $150,000
$150,000 * 50% = $75,000
800 * $150 = $120,000
$120,000 * 50% = $60,000
Difference between actual and estimate: $60,000 - $75,000 = -$15,000
For the example above, the school would have to return any committed support above $60,000, which is the Category Two post-discount amount based on the actual student population. If the school requested and received commitments for their entire Category Two budget based on the estimated student population ($75,000), USAC would then rescind commitments for the difference between the actual and the estimated budget amounts, which in this case would be $15,000.
A26: Yes, a library's Category Two budget is based on the library's square footage. If a library increases in square footage, its budget can increase.
A27: To determine a library outlet's Category Two budget, add up the total square footage for all floors occupied by the library outlet and enclosed by the outer walls of the library outlet, including those areas off-limits to the public. This is the same floor area collected by the Institute of Museum and Library Services (IMLS) annually. Libraries cannot include patios or other outdoor spaces such as parking lots unless they are enclosed by the outer walls of the library.
A28: They should be counted like any other outlet – count the area enclosed by the outer walls of the bookmobile. Generally speaking, bookmobiles would qualify for the funding floor minimum Category Two pre-discount amount of $9,200.