E-Rate News for the Week of 10/28/02 – 11/01/2002
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Wave 15 Funding for FY 2002: None for Florida on Wave 15
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FY 2003 Filing Window Opens November 4
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New Version of Form 471 Available
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New Methodology for Library Discount Rate Calculations
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SPIN Change Clarification – Need for Vendor Caution
The E-Rate News for the Week, prepared by E-Rate Central, is sponsored by the
Council of Chief State School Officers ("CCSSO") and made possible by a grant
from the AT&T Foundation. Official SLD news is in the "What’s New!" section of
the SLD’s Web site (http://www.sl.universalservice.org). Additional information is
on the State Education Telecommunications Alliance’s ("SETA") Web site
(http://www.e-ratecentral.com).
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Wave 15 Funding for FY 2002: None for Florida on Wave 15
Wave 15 of Funding Year 2002 will be released on Tuesday, November 5.
Total funding in this Wave is approximately $27 million for 495
applications. The cumulative total for FY 2002 is now $1.42 billion for over
27,300 applications.
Internal Connection funding is being provided for applicants at the 90%
discount rate. No Internal Connection funding is available below 80%. The
availability of Internal Connection funding for discounts in the 80-89%
range cannot yet be projected, but requests for funding in this range are
currently being reviewed by the SLD.
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FY 2003 Filing Window Opens November 4
The Form 471 application window for FY 2003 will open at noon E.S.T. on
Monday, November 4, 2002. The online filing system will become
operational at that time. Paper applications received by mail before
November 4 will be returned and will have to be resubmitted.
The Form 471 window will close at 11:59 p.m. E.S.T. on Thursday,
January 16, 2002. Applications mailed or completed online after that time
are unlikely to be funded. Please do not wait until the last minute to file.
Applicants, who have not yet filed Form 470s for FY 2003, should do so
now. The Form 470s must be posted on the SLD Web site for a minimum
of 28 days before vendors are selected, contracts are signed, or Form
471s are signed and submitted.
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New Version of Form 471 Available
A new version of Form 471, dated October 2002, is now available on the
SLD Web site (http://www.sl.universalservice.org/form/). As was the case
with the new Form 486, the major visual change in the new Form 471 is to
make many of the fields scannable so as to reduce SLD data entry
workload for forms submitted by mail. Applicants filing online will use a
visually equivalent version of the new Form 471.
Although the SLD prefers that applicants use the new Form 471 for
manual submission, they will continue to accept applications submitted on
the older, October 2000, version. Applicants wishing to type or
computerize their Form 471s may find the older version, without the new
scanning hash marks, easier to use. As with the Form 486, the older, non-
scannable, versions of the form are no longer available on the SLD Web
site. The Forms Rack section of the E-Rate Central Web site, however,
includes all valid versions.
The instructions for the new Form 471 contains key information that
should be reviewed prior to filing. Several points of particular note include
the following:
(1) The SLD recommends that applicants file separate Form 471s, one for
Priority 1 services and one for Priority 2 services. Separating the two
applications, particularly for higher discount applicants, permits the SLD to
process and approve the requests for Priority 1 services earlier in the
funding cycle before a final determination can be made on the availability
of funds for Priority 2 services.
(2) The methodology for calculating library discounts has changed (see
below).
(3) Additional warnings have been included in the Form 471 instructions
regarding the Item 25 certification regarding technology planning and the
payment of both eligible and ineligible costs.
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New Methodology for Library Discount Rate Calculations
Although the new Form 471 looks quite different from the older version,
the only substantive change is the calculation of discount rates for
libraries. In the past, an individual library site used the aggregate discount
rate of the school district in which it was located (i.e., the weighted
average of the discount rates of the individual school discount rates in that
district).
Now, using a revised version of Block 4: Worksheet B, the same library
would calculate its discount rate directly off the discount rate matrix based
on the percentage of the total number of district students eligible for the
National School Lunch Program ("NSLP"). In this way, an individual urban
library, for example, would always have a "multiple of 10" discount rate
(i.e., 20, 40, 50, 60, 80, or 90%) rather than some possible aggregate mid-
band rate (e.g., 57%).
To determine the impact of this change, we did a preliminary discount rate
analysis for over 50 libraries located in one New York State county using
last year's NSLP data. The majority of the county’s districts had
consistent discount rates among their individual schools, so the districts
themselves had "multiple of 10" aggregate rates. As expected, the new
methodology resulted in no change for the associated libraries.
However, about 35% of the 19 districts did not have "multiple of 10"
aggregate rates. Using the new calculation method, the discount rates for
the associated libraries all changed to higher or lower "multiple of 10"
rates. About half went up and half went down. As a general (but not
perfect) rule, if the district's aggregate rate was more than halfway to the
next highest "multiple of 10," the library's rate went up to that multiple --
and vice versa.
The most significant swings were near the top and the bottom of the
discount rate range. One library in a 32% district dropped to 20% – a drop
in E-rate benefits of more than one-third. On the other hand, libraries in
districts with aggregate rates in the mid- to upper-80s could go up to 90%
– an important difference if Internal Connection services are funded at
90% but not at mid-80% levels.
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SPIN Change Clarification – Need for Vendor Caution
When the SLD approves a mid-year SPIN change, after some funds have
been authorized for disbursement to the original service provider, only the
remaining funds will be available for disbursement to the new provider.
Quite logically, total funding to both suppliers cannot exceed the original
committed amount.
Unfortunately, the SLD’s system of notifying a new vendor of a successful
SPIN change apparently does not show a reduction in the committed
amount to reflect previous disbursements. A recent SPIN change
confirmation notice indicated the following:
"The new Service provider will receive a Funding Commitment Decision
Letter (FCDL). PLEASE NOTE: While this FCDL will contain more detailed
information on the FRN listed above, it will show the ORIGINAL
COMMITMENT amount, rather than the amount that remains undisbursed
for this FRN."
New vendors – particularly those discounting their customers’ bills –
should be careful not to approve discounts in excess of the remaining
commitments so as to avoid the need for future billing adjustments.
Vendors can check remaining commitments on specific FRNs by
contacting the SLD’s invoicing group or by using the Data Request
database capability on the SLD’s Web site.
Disclaimer: This newsletter may contain unofficial information on prospective E-
rate developments and/or may reflect E-Rate Central’s own interpretations of E-
rate practices and regulations. Such information is provided for planning and
guidance purposes only. It is not meant, in any way, to supplant official
announcements and instructions provided by either the SLD or the FCC.