E-rate 2.0 Overview

CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
E-RATE OVERVIEW
What is E-Rate? What is Changing?
Presented by
– Dan Rivera [PSC Group]
– Kezia Gollapudi [Aruba Networks]

Aruba Networks
HQ: Sunnyvale, CA
Founded in February of 2002
$730M in Revenue
2,000 Employees
Leader in Unified Access & NAC
40,000 Customers World-wide
NASDAQ: ARUN
Comprehensive list of Industry Partners
Ecosystem • Channel • Distribution

Addressing the Needs of Digital Learning
CLASSROOM-READY WI-FI
Boost 1:1 learning on mobile devices
SECURE & SIMPLE NETWORK ACCESS
Provide differentiated access to network & enable BYOD
INTELLIGENT APPLICATION HANDLING
Bring curriculum to life with interactive & multimedia apps
SIMPLE CLASSROOM MANAGEMENT
Empower teachers in digital classrooms
FLEXIBLE SOLUTIONS
Invest in architecture & management right for your schools

What is E-Rate?
 Created in the Telecommunications Act of 1996
– First funding year in 1998 (Year 1)
– Funding years are July 1 through June 30 (FY2014: July 1, 2014 – June 30, 2015)
 Provides subsidies of up to 90% for eligible services
 Available to schools and libraries
 Administered by the Universal Service Administration Company (USAC)
– Specifically, the Schools & Libraries Division (SLD)
– Universal Service Program overseen by FCC
 Original Funding Cap of $2.25B, adjusted for inflation
– Currently at $2.4 Billion (Funding Year 2014)
– Funding committed to Category 1, then (if funding remains) Category 2

E-Rate Eligible Services
CATEGORY 1 SERVICES (Formerly Priority 1)
– Telecommunications services
– Telecommunications
– Internet access services
CATEGORY 2 SERVICES (Formerly Priority 2)
– Broadband internal connections
– Managed internal broadband services
– Basic maintenance of eligible broadband internal connections

E-Rate Process
• ESL Released
• Application Window
Announced
• Form 470/RFP
Filed
Bids
Submitted
Form 471
Filed • PIA Review
• Bids Reviewed
• Service Provider
Selected
• FCDL Issued
• Form 486 Filed
Service
Starts
Funding
Disbursed
• Invoices Submitted
(BEAR or SPI)

E-Rate FY2015 Timeline
APPLICANTS CAN FILE FORM
470 (JULY 1, 2014)
DRAFT ESL REPLY COMMENT
DATE (SEPTEMBER 18, 2014)
DRAFT ESL RELEASED
(AUGUST 4, 2014)
1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 1 Feb 1 Mar 1 Apr 1 May 1 Jun 1 Jul
DRAFT ESL COMMENT DATE
(SEPTEMBER 3, 2014)
FINAL ESL RELEASED*
(ESTIMATED)
APPLICATION WINDOW
OPENS* (ESTIMATED)
CAT2 INSTALLATIONS CAN
BEGIN (APRIL 1, 2015)
APPLICATION WINDOW
CLOSES* (ESTIMATED)
CAT1 SERVICES BEGIN (JULY
1, 2015)

WHAT CHANGED?
E-Rate Modernization Order

E-rate Modernization Order (E-rate 2.0) Highlights
Focus on Wi-Fi
Reorientation of Services
Category Two Budgets
Maximum amounts set
Eligible Services
Significant changes to the ESL
Discount Methods
Calculations / Classifications
Cost-Effective Purchases
Pricing Transparency
Preferred Master Contracts
Consortia Purchasing Encouraged
Streamlined Application Process
Multi-year Form 470/471
Tech Plan Eliminated
Competitive Bid Exemptions
Electronic Filing Requirement

E-Rate Modernization Order (E-rate 2.0)
Change in Nomenclature
– Priority 1, now Category 1
– Priority 2, now Category 2
$2 Billion Additional Funds for
FY2015 & FY2016
– Category 2 has annual target budget
of $1B; Keyword “Target”
5-Year Category 2 Budget
Maximum for Applicants
– Schools: $150/student ;
Libraries: $2.30/sq.ft
– Rolling Budget, eliminates 2-in-5 rule
 Flexible spending patterns
 Subscription-based pricing
 Fresh start in FY2015

E-rate Modernization Order (E-rate 2.0)
Category Two Budget Example
Sample School with a Discount Rate of 85%
School # of
Students
Pre-Discount Cat2
Budget
Post-Discount Cat2
Budget
Elementary
School
500 500*150 = $75,000 $63,750
Middle School 750 750*150 = $112,500 $95,625
High School 1000 1000*150 = $150,000 $127,500
Cont. HS 50 50*150 = $9,200 (floor) $7,820
District Office 0 $0 (NIFs don’t qualify) $0 (NIFs don’t qualify)

NEW DISCOUNTING
Category 2 maximum discount
reduced to 85%
FASTER RESPONSE
Target FCDL issue date of
Sept.1 of each funding year
FUNDING FLOOR
Establishes a funding floor of
$9,200 in Category 2 support
ADDS & REMOVES
(+) Managed internal broadband
eligible in FY2015 (Managed LAN &
WLAN)*
(--) Voice & Video components
removed from Cat-2 in FY2015 ESL
PRICING TRANSPARENCY
Item 21 embedded in Form 471
* Per Draft ESL. Subject to change.

PREFERRED MASTER
CONTRACTS
Bureau will designate specific national
contracts as “Preferred Master
Contracts”
Allows applicants to bypass the Form
470 filing requirement
For equipment purchases only; no
labor services
EARLY INSTALLATIONS
Category 2 installations can begin on April 1 of funding year
 Eliminate RFP process
 Choose pre-negotiated contracts

Aruba Product Eligibility*
?
*Per Draft ESL. Subject to change. ** When purchased as a managed service.

E-rate Modernization Order
 Voice services being phased down beginning FY2015
– 20-Point reduction each year. FY2015 max discount 70%, FY2016 max
discount 50%, etc.
 Legacy telephone features eliminated
– Paging, Text, Directory Assistance, Inside wire maintenance
 Email, Web Hosting, Voice Mail eliminated
 Wireless Data Plans and Air Cards eligible in certain
circumstances only
– Only eligible when proven to be most cost-effective way to connect students

E-rate Modernization Order
 Discount Method Modified
 Discounts are District-Wide
 Urban/Rural status now determined for entire school district or library system
 New rules for Discount Surveys
 Document retention increased to 10-Years from last date of install
 Contract signature requirements eased
 Appeals must be filed with USAC first
 Applicants can receive BEAR disbursements directly from USAC
 Invoice deadline extensions will be automatically granted one-time
for 120-Days
– No other extensions will be granted

IMPORTANT LINKS
USAC E-Rate Modernization Resources
http://www.usac.org/sl/tools/modernization-order/
default.aspx
FCC (E-Rate Specific) Website
http://www.fcc.gov/guides/universal-service-program-schools-
and-libraries
E-Rate Modernization Order
http://transition.fcc.gov/Daily_Releases/Daily_Business
/2014/db0723/FCC-14-99A1.pdf
Draft ESL
http://transition.fcc.gov/Daily_Releases/Daily_Business
/2014/db0804/DA-14-1130A1.pdf
http://www.usac.org/about/tools/TrainingArchive/Se
riesDetails.aspx?ID=150

ULTIMATE GUIDE TO MODERNIZING
CLASSROOM WI-FI
November 18, 2014
Speaker: Keith Parsons

THANK YOU
Dan Rivera
The PSC Group
dan@thepscgroup.com

E-rate 2.0 Overview

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Editor's Notes