E-rate: Is it for me?

by The Source on December 11, 2012 · 0 comments

in K-12,ScanSource Catalyst

It’s been said that the only thing that saves us from a bureaucracy is its inefficiency.   There are a sea of forms to fill out, multiple hoops to jump through, deadlines to meet, “I”s to be dotted and “T”s to be crossed.  But understanding how to clear those hurdles can give you a tremendous advantage over your competitors who cannot.

With that said, I would like to introduce you to the E-rate program.

What is it?

If you take a look at your cell phone bill, you will notice a conspicuous line item labeled “Federal Universal Service Charge”.  That money is used, among other things, to provide telecommunications and Internet-related services to eligible schools and libraries at a discounted rate.  Roughly $2.3 billion is allocated annually to the E-rate program.

What products and services are eligible?

There are two broad categories covered in the E-rate program called “Priorities”.

Priority  1.  Priority 1 services include local and long distance, cellular, and 800 services.  Internet access, VoIP and data services also fall under Priority 1.  For the most part, these services are provided by the major service providers (or carriers) like Verizon, AT&T, Sprint and the like.

Priority  2.  Priority 2 services are referred to as “Internal Connections”.  This is where ScanSource Partners like you can get in on the fun.  Internal Connections include network equipment and the necessary cabling required to bring information to the classroom.  PBXs, switches, and routers are examples of Priority 2 services.  Interestingly, end-user devices like phones and computers are not covered by the E-rate program.

How big of a discount do the schools and libraries receive?

Institutions can receive anywhere from 20% up to a 90% discount on eligible products and services.  The size of the discount is determined by a formula that includes the percentage of students eligible for free and reduced lunches and the location of the institution (urban or rural).  The greater the poverty level, the higher the discount level.

It is important to understand in what order the funds are awarded.  Guess which one is funded first?  That’s right – Priority 1.  All requests for Priority 1 funds (think Telcos) are approved, and what’s left over (of the $2.3 billion) is awarded to Priority 2 requests in order of need.  For the past two years, Priority 2 requests were funded only for the 90% level and above.  That means that only the poorest school districts received funding for their Internal Connection projects.

How can I participate?

All you need to begin your E-rate journey is a Service Provider Number (SPIN).  This is a simple online process that can be completed here: http://usac.org/sl/service-providers/step01/default.aspx.

Obviously, this is a very high level overview of the program, and there are many other factors that should be considered when deciding if pursuing E-rate business is right for your company.  To learn more about E-rate, you can visit the Universal Services website at http://usac.org/sl.   Or, just email me at kyle.candler@catalysttelecom.com.

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