The E-rate Technology Discount Program

The E-rate (short for education rate) is a nationwide program that offers public and private schools and libraries the opportunity to receive substantial discounts on a wide range of advanced telecommunications services including internet access, distance learning and videoconferencing service, high speed data connections, and internal wiring and wireless network equipment.

New E-Rate application window for FY 2020 to open January 15, 2020

The Form 471 application window will open at noon EST on Wednesday, January 15, and will close at 11:59 PM EDT on Wednesday, March 25.

Applicants should begin work soon on the Form 470 so that the application will be posted in time to meet all the deadlines. Reminder: Form 470 must be posted online for 28 days before Form 471 can be filed.

Category Two (C2) opportunity: Any applicant that has not received the full allotment during the past 5 years ($150 per student, pre-discount) may still apply for the full amount before the 5 years window is reset for 2021. Category Two (C2) products and services include internal connections, managed internal broadband services, and basic maintenance of internal connections. Additional information about the C2 application may be found here.

USAC, the manager of the E-Rate program will host a webinar on C2 services on Tuesday, Jan 21, 2020 2:00 PM - 3:00 PM EST. Register to attend this important webinar.

The FY 2020 administrative window, which is currently open, will close shortly before the application window opens. At that point EPC entity profiles will be locked for the duration of the Form 471 application window.

Additional information about the E-Rate program may be found here.

E-rate Changes that May Impact Catholic Schools

Recent actions on the part of the FCC have raised concerns about the future of the E-rate program and telecommunications and Catholic school participation. Since 1997, E-rate has provided discounts to schools and libraries through their telecom providers and these providers are then reimbursed for the discounted services by the Universal Service Administration Company (USAC), which oversees E-rate and the other universal service programs. Because of the administrative structure of the program, E-rate was not considered a federal program since it was not funded from taxpayer money placed in the federal treasury.

This is a significant aspect of the program for Catholic and other private schools since the direct recipient of the funds is the vendor, not the school itself. This is important because a recipient of federal funds must comply fully with federal law and regulations under Title IX, Section 504 and others that non-recipient status allows for limited exemptions and modifications that would otherwise burden those private schools.

Beginning in May 2018, the FCC ordered all USF funds to be transferred from a private bank into the U.S. Treasury. The question remains as to whether or not this action makes E-rate a federal program and schools who receive discounts recipients of federal funds.

Without greater clarity school applicants would do well to insulate themselves as much as possible by not using Form 472, the Billed Entity Applicant Reimbursement (BEAR) method of payment, which would provide the schools with a check from the U.S. Treasury. Instead, schools should use Form 474, the Service Provider Invoice Form (SPI) and insist that the vendor claim the discounted portion from USAC directly. This would constitute receipt of goods and services, not direct funding, similar to how schools participate in federal education programs under the Every Student Succeeds Act (ESSA).

Information About the New E-rate Program

The Federal Communications Commission (FCC) has made significant changes to the program to advance three major goals:

  1. Significantly expand funding for Wi-Fi networks and distribute it fairly to all schools and libraries
  2. Maximize the cost-effectiveness of E-rate spending through greater pricing transparency, encouraging consortia and bulk purchasing, and better enforcement of existing rules
  3. Streamline and simplify the E-rate application process and overall program administration

A summary of the main points of the FCC E-rate Modernization Order is available here.

Important Changes to the New E-rate program

Changed terminology: The names related to the types of services have been changed from Priority to Category

Category Funding Discount Levels:

  • Category One: The highest discount level remains 90 percent, except that the highest discount rate for voice services will be 70 percent in funding year 2015, and will decrease by an additional 20 percentage points each subsequent funding year. 
  • Category Two: The highest discount level is set at 85 percent.

Eligible Category One Services:

  • Voice services are being phased-out at 20 percentage points a year with complete elimination in 5 years.  This phase down will apply to all costs incurred for the provision of telephone services and circuit capacity dedicated to providing voice services, including: local phone service, long distance service, plain old telephone services, radio loop, 800 service, satellite telephone, shared telephone service, Centrex, wireless telephone service such as cellular, and interconnected VoIP.
  • The following services are no longer eligible for any E-rate support: paging; telephone service components, including directory assistance charges, text messaging, custom calling services, direct inward dialing, 900/976 call blocking, and inside wire maintenance plans; e-mail; web hosting; and voicemail.
  • Data plans and air cards for mobile devices will remain eligible for support only if a school or library can demonstrate that individual data plans are the most cost-effective options for providing internal broadband access for portable mobile devices at its facility.
  • The application separates voice services from internet which is still funded at up to 90 percent, based on the discount matrix.

Eligible Category Two Services:

  • Internal connections, basic maintenance, and managed internal broadband services (more commonly described as managed Wi-Fi).
  • Funding for internal connections is available for routers, switches, wireless access points, internal cabling, racks, wireless controller systems, firewall services, uninterruptable power supply, caching, and the software supporting each of these components used to distribute high-speed broadband throughout schools and libraries.

E-rate Category Two Budget

The FCC has set a budget of $150 per student that may be used over a five year period for Category two services. There is no budget limit for Category One.

The pre-discount budget for a school is calculated by multiplying the total number of students at the school by $150 with a minimum of $9,200 if the school has fewer than 62 students.  Caveat: the budget is pre-discount; applicants receive the discounted level of the total.

Example for a school with 200 students at the discount rate of 60 percent:

  • $200x$150=$30,000 pre-discount.  Applying the 60% discount, the E-rate support is $18,000.  The school is responsible for the undiscounted portion of $12,000.

The pre-discount budget calculation is for a five-year period, starting with the first funding year (FY2015 – FY2019) in which applicants receive Category Two support. Applicants can utilize the pre-discount budget in a manner that best meets their needs. Applicants can apply to use all of it in FY2015, spread it out over 5 years or any other combination up to the total.


  • Applicants and service providers will be required to file all documents with USAC electronically. USAC will be required to provide all notifications electronically. USAC will phase in this requirement over the next three funding years.
  • The document retention period will be extended from five to 10 years after the latter of the last day of the applicable funding year, or the service delivery deadline for the funding request. This revised document retention period rule is subject to the Paperwork Reduction Act and will become effective upon announcement in the Federal Register of approval by the Office of Management and Budget.

Technology Plans are no longer required for any E-rate services. NCEA will no longer certify technology plans since they will not be needed.

E-Rate Application Process

The application process has several steps to follow and forms to complete in order to successfully apply for and receive E-rate discounts. These steps include:

  • opening the competitive process: Form 470
  • seeking discounts on eligible services: Form 471
  • confirming the receipt of services and compliance with Internet Safety requirements: Form 486
  • invoicing for services: Form 472

Webinars are available online at the USAC reference area for help with each step of application process.

How To Calculate Your E-Rate Discount

Each school discount rate is based on two factors:

  1. the percentage of students eligible for the National School Lunch Program (NSLP)
  2. the urban or rural status of the location of the school.

The U.S. Department of Agriculture income eligibility tables for the current school year can be found HERE.

Discount Matrices table for Category One and Category Two


Category One

Discount Level Percentages

Category Two

Discount Level Percentages

% Students eligible for Federal School Lunch Program





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Urban/Rural Status: The FCC’s definition of rural is new for Funding Year 2015. The system will automatically provide the Urban/Rural status of the entity based on the physical address for that entity in USAC’s systems. School districts with a majority of schools that are in rural areas can qualify for an increased rural discount rate.

Schools that use surveys to determine their E-rate discount must calculate their discount using only the surveys they actually collect. Previously, schools using a school-wide income survey could project a percentage of eligibility for the entire school population if they had a 50 percent return rate.

Schools utilizing the Community Eligibility Provision (CEP) of the National School Lunch Program shall calculate their student eligibility for free or reduced priced lunches by multiplying the percentage of directly certified students by the CEP national multiplier. Schools and school districts should then use the resulting number for that school when calculating the district-wide calculation in the same manner as schools using NSLP data.

Tips for the FY2017 Application Filing Window

EPC Portal for all E-rate Activities: USAC has launched an E-rate Productivity Center as a gateway for all E-rate activities for applicants and service providers. All E-rate activities (filing applications, questions, appeals, etc.) will be conducted through this site.

Currently, Form 470 is available on the site and applicants can begin filing their 2017 application. Other forms will be made available as the application period is announced.

Schools are encouraged to become familiar with EPC and begin the filing process early. If you are accessing the EPC for the first time, you must do so through an email invitation from Follow the instructions in the email to sign in for the first time.

Before beginning the application process, review the information in the E-rate Modernization webinar. Changes to the E-rate program will be covered.

Review the FY 2017 Eligible Services List. The eligibility of some products and services has changed from previous years, and it is very important that both applicants and service providers familiarize themselves with the changes. Also, note specifically that Voice Services will be filed on separate funding requests on the FCC Form 471 and are subject to a phase down of 20 percentage points each year starting with FY2015.

File early. Applicants will need to allow plenty of time for completing and reviewing the information they provide in their FCC Forms 470 and 471. Note specifically that information on the costs and types of products and services requested must be entered directly into the FCC Form 471.

Waiting period. Applicants must wait AT LEAST 28 days after Form 470 is posted to the USAC website before selecting a service provider, signing a contract (for contracted services), and signing and submitting a Form 471. If you issue an RFP after you post your FCC Form 470, you must wait at least 28 days after the RFP is publicly available.

Online filing: FY2017 FCC Forms 470 and 471 must be submitted online. However, you can still certify these forms on paper.

Resources: The official and most comprehensive site for program information is that of the Schools and Libraries Division (SLD) of the Universal Services Administrative Company (USAC) that administers the program for the Federal Communications Commission (FCC). You can find additional program guidance documents in the reference area of the USAC website.

Children’s Internet Protection Act (CIPA) Requirements

Beginning July 1, 2012, when schools certify their compliance with CIPA, they will also be required to certify that their internet safety policies have been updated to provide for educating minors about appropriate online behavior, including interacting with other individuals on social networking websites and in chat rooms, cyber bullying awareness, and response.

School and library authorities must certify either that they have complied with the requirements of CIPA; that they are undertaking actions, including any necessary procurement procedures, to comply with the requirements of CIPA; or that CIPA does not apply to them because they are receiving discounts for telecommunications services only.

Detailed information about CIPA compliance may be found at the Schools and Libraries division of the Universal Service Administrative Company (USAC).