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Universal Service Administrative CompanySchools and Libraries Division

September 24, 2003

Universal Service Administrative Company

School and Libraries Support Mechanism– Provides discounts to eligible schools and libraries

for Telecommunications Services, Internet Access, and Internal Connections

– Applicants can be schools, libraries, or consortia, but only eligible recipients of services can receive discounts

– Applicants must apply for discounts each year– Disbursements are capped at $2.25 billion annually

Overview

2


History Schools and Libraries Support

Mechanism started providing discounts as of January 1, 1998

– Telecommunications Act of 1996• Congress directed the FCC to “establish

competitively neutral rules . . . to enhance, to the extent technically feasible and economically reasonable, access to advance telecommunications and information services for all public and non-profit elementary and secondary school classrooms . . . and libraries.”First Report and Order (FCC 97-157)

3


Introduction

4

Commitments to Date by Applicant Type(Inception to September 10, 2003)

$364,250,247

$8,847,970,981

$846,765,573 $1,251,271,531

ConsortiumSchool DistrictSchoolLibrary


Introduction

5

Commitments to Date by Service Type(Inception to September 10, 2003)

$1,092,827,418 $6,101,992,880

$4,131,148,308

Internal Connections

Internet Access

Telecommunications


Introduction

6

Commitments to Date by Discount Band(Inception to September 10, 2003)

Discount Band Amount Committed20-29% $15,941,50030-39% $45,583,58040-49% $725,688,70350-59% $782,182,83760-69% $1,149,275,06870-79% $1,532,664,54080-89% $3,137,807,94890% $3,936,824,430TOTAL $11,325,968,607


Introduction

Vendor Assistance– NECA in New Jersey

• Application review — Program Integrity Assurance (PIA)

• Invoice review (PIA)• Appeal process• Program correspondence, including change and

extension requests– Pearson Government Solutions in Kansas

• Client Service Bureau (call center)• Forms processing

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Eligibility Eligible Entities

– Schools• Must meet the statutory definition of

elementary or secondary school found in the No Child Left Behind Act of 2001

• Must be a non-profit institutional day or residential school, including a public charter school, that provides elementary or secondary education, as determined under state law

• Must not be operating as a for-profit business• Must not have an endowment exceeding $50

million8



– Schools (cont.)• Pre-kindergarten, Adult Education, Juvenile

Justice– Must meet state definition of elementary or

secondary education– Students and/or facilities may be eligible – SLD requests updated information from

state departments of education every two years

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– Libraries• Must meet the statutory definition of library or

library consortium found in the Library Services and Technology Act (LSTA) of 1996

• Must be eligible for assistance from a state library administrative agency under LSTA

• Budget must be completely separate from any schools

• Must not be operating as a for-profit business

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Eligibility Eligible Services

– Priority 1• Telecommunications Services

– local and long distance– wireline and wireless– voice, data, video

• Internet Access– Priority 2

• Internal Connections (switches, hubs, routers, wiring)

– Priority 1 funded first, then Priority 2 funded beginning with neediest applicants (90%, 89%, 88%, etc.)

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Eligibility

Eligible Services– Eligible Services List

• Lists services by category (Telecommuncations Services, Internet Access, Internal Connections, and Miscellaneous)

– Services which are conditionally eligible– Ineligible services

• Available on SLD web site

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Service Providers Service Providers

– Must file Form 498• Request a Service Provider Identification

Number (SPIN)• Provide/update contact information

– Providers of Telecommunications Services• Must provide telecommunications services on a

common carriage basis to be an eligible telecommunications provider

– In general, must provide services and bill customers before being reimbursed for discount on services

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Calculating Discounts Discount Calculation

– National School Lunch Program (NSLP)• Individual schools — start with the percentage

of students eligible for NSLP for their school• School districts — start with the NSLP

percentages of individual schools in the district, calculate weighted average of all schools

• Libraries — start with the percentage of students eligible for NSLP for the school district in which the library is located

• Consortia — calculate simple average of discounts of members

– Urban or rural status of county in which school or library is located (from web site)

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Calculating Discounts• Points to Remember:

All discount calculations will involvepercentage of students eligible for NSLP in a

school or school districtdetermination of Urban/Rural statusdiscount from Discount Matrix

Applicant with members or subunits must calculate an average of those membersSchool district – individual schoolsLibrary system – library outlets/branchesConsortium – eligible member entities

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Calculating Discounts

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INCOME URBAN LOCATION RURAL LOCATION

Measured by % of students eligible for the National School

Lunch Program

Discount Discount

If the % of students in your school that

qualifies for the National School Lunch

Program is…

…and you are in an URBAN area, your discount will be…

…and you are in a RURAL area, your discount will be…

Less than 1% 20% 25%1% to 19% 40% 50%20% to 34% 50% 60%35% to 49% 60% 70%50% to 74% 80% 80%75% to 100% 90% 90%

Discount Matrix


Calculating DiscountsINDIVIDUAL SCHOOL EXAMPLE

1. Determine the total number of students in the school

2. Determine the number of students eligible for NSLP

3. Divide the number of students eligible for NSLP by the total number of students to get the percentage of students eligible for NSLP

4. Determine if the school is Urban or Rural5. Look up the discount from the Discount Matrix


Calculating DiscountsINDIVIDUAL SCHOOL EXAMPLE (cont.)

Polk Elementary School Rural location 64 total students 31 students eligible for NSLP

Calculation 31 / 64 = 48.437 % eligible for NSLP Rural location Discount Matrix: 70% discount


Calculating DiscountsSCHOOL DISTRICT EXAMPLE School districts calculate a weighted average of the

discounts for their individual schools to get their shared discount percentage, as follows:

1. Calculate the matrix discount for each individual school

2. Calculate the weighted product (the matrix discount multiplied by the total number of students) for each individual school

3. Determine the total number of students in the School District and the total of the weighted products

4. Divide the total of the weighted products by the total number of students to get the shared discount percentage



SCHOOL DISTRICT EXAMPLE (cont.)


Calculating DiscountsSCHOOL DISTRICT EXAMPLE (cont.)

Madison Elementary School Urban location 127 total students 49 students eligible for NSLP

Calculation 49 / 127 = 38.582 % eligible for NSLP Discount Matrix: 60% discount 127 x 60% = 76.2 = weighted product for

Madison Elementary School


Calculating DiscountsSCHOOL DISTRICT EXAMPLE (cont.)

Madison Elementary School 127 total students, 76.2 weighted product

Adams Middle School 195 total students, 97.5 weighted product

Washington High School 142 total students, 71.0 weighted product

Calculation 127 + 195 + 142 = 464 = total students in school district 76.2 + 97.5 + 71.0 = 244.7 = total of weighted products 244.7 / 464 = 53% = shared discount percentage for school

district


Calculating DiscountsLIBRARY OUTLET/BRANCH EXAMPLE

1. Determine the total number of students in the school district in which the library is located

2. Determine the number of students eligible for NSLP in that school district

3. Divide the number of students eligible for NSLP by the total number of students to get the percentage of students eligible for NSLP in that school district

4. Determine if the library is Urban or Rural5. Look up the discount from the Discount Matrix



LIBRARY OUTLET/BRANCH EXAMPLE (cont.)


Calculating DiscountsLIBRARY OUTLET/BRANCH EXAMPLE (cont.)

Polk Public Library Rural location Located in Lincoln School District

• Polk Elementary School has 64 total students, 31 students eligible for NSLP

• Lincoln Jr/Sr High School has 92 total students, 62 students eligible for NSLP

Calculation 64 + 92 = 156 total students 31 + 62 = 93 students eligible for NSLP 93 / 156 = 59.615 % eligible for NSLP Discount Matrix: 80% discount


Calculating DiscountsLIBRARY SYSTEM EXAMPLE Library systems calculate a simple average of the

discounts for their individual outlets/branches, as follows:

1. Calculate the matrix discount for each individual library outlet/branch

2. Calculate the total of the matrix discounts for all the library outlets/branches

3. Divide the total of the matrix discounts by the total number of library outlets/branches to determine the library system’s discount



LIBRARY SYSTEM EXAMPLE (cont.)


Calculating DiscountsLIBRARY SYSTEM EXAMPLE (cont.)

Washington Main Library and Jefferson Branch Library

Both in Washington School District 127 + 195 + 142 = 464 total students 49 + 67 + 47 = 163 students eligible for NSLP 163 / 464 = 35.129 % eligible for NSLP Urban location Discount Matrix: 60%

Monroe Branch Library In Lincoln School District Discount Matrix: 80% (calculated previously)


Calculating DiscountsLIBRARY SYSTEM EXAMPLE (cont.)

Washington Main Library Discount Matrix: 60%

Jefferson Branch Library Discount Matrix: 60%

Monroe Branch Library Discount Matrix: 80% (calculated previously)

Calculation 60 + 60 + 80 = 200 = total of matrix discounts 200 / 3 = 67 = simple average of three outlet/branch

discounts gives the shared discount percentage


Calculating DiscountsCONSORTIUM EXAMPLE Consortia calculate a simple average of the

discounts for their individual member entities, as follows:

1. Determine the matrix discount for each eligible member of the consortium, depending on its entity type

2. Calculate the total of the matrix discounts for all the eligible members of the consortium

3. Divide the total of the matrix discounts by the total number of eligible members to determine the consortium’s shared discount



CONSORTIUM EXAMPLE (cont.)


Calculating DiscountsCONSORTIUM EXAMPLE (cont.)

Polk Elementary School 70% matrix discount

Washington School District 53% matrix discount

Polk Public Library 80% matrix discount

Washington Library System 67% matrix discount

Calculation 70 + 53 + 80 + 67 = 270 = total of matrix discounts 270 / 4 = 68% = simple average of four consortium members

and shared discount percentage


Application Process• Technology Plan – What is my plan?• Form 470 – What services do I want?• Form 471 – What services did I order?• Form 486 – When did services start?• Form 472 or Form 474 – How do I

receive reimbursements or discounts?

Online filing/certification available for most forms

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Application Process

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•Applicant Actions

•SLD Actions

or Tech Plan

Form 470

Form 471

Form 486

Form 472

Form 474

$$$

Applicant (AP) requesting more than local/long distance telephone service prepares Tech Plan

AP files Form 470 to describe services sought and open its competitive bidding process

AP waits at least 28 days before selecting service provider (SP), then signs agree-ment and posts Form 471 detailing funding requests

AP notifies SLD that services have started, certifies Tech Plan status, certifies CIPA compliance

SLD posts AP Form 470 to USAC web site

AP requests reimburse-ment on Form 472 or SP requests payment on Form 474

PIA reviews Form 471, then communi-cates funding decisions by letter (FCDL)

SLD reviews invoice


Technology Planning• Technology Plans

• Not required for local/long distance phone service• Must be in place before Form 470 filing• Must be approved by an SLD-certified approver

before Form 486 filing or start of services, whichever is earlier

• Must cover five areas:• Goals / Strategies for using technology• Professional development• Needs assessment• Sufficient budget• Evaluation process 35


Technology Planning• Points to Remember:

Tech Plan must establish the connections between the technology and specific curriculum reforms or library service improvements

Tech Plan should provide evidence of securing the resources needed to make effective use of the discounted services

Tech Plan should include an evaluation process to monitor progress toward established goals

Tech Plan Approver listed on Form 486 must be SLD certified

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Form 470• Form 470

• Opens a competitive bidding process• Applicant responsible for ensuring an open, fair process

and selecting the most cost-effective provider of the desired services

• Must wait 28 days after POSTING of Form 470 to select service provider, sign contract/agreement, and sign and submit Form 471

• Service providers who will participate in the bidding process cannot complete Form 470

• Can be filed once for multi-year contracts, but 470 and RFP must indicate intent to sign multi-year contract

• Make RFP available or list specific service/function and quantity/capacity 37


Form 470• Competitive Bidding

• Request for Proposal (RFP)• Not required, but a good idea• Describes your project scope, location, other

requirements in detail

• Competition• Goal is to have as many bidders as possible• Promotes better service and lower prices

• Fair and open process• All bidders treated the same, no advance knowledge of

RFP information• No secrets in the process, all bidders know what is

required of them 38


Form 470• Points to Remember:

Competitive bidding process must be open and fair

List services sought in correct category of service (Form 471 must match)

Retain worksheets, bid evaluation criteria, winning AND LOSING bids

Form 470 must be certified by close of Form 471 application filing window

Filing online speeds processing and reduces errors 39


Form 470• Form 470 Receipt Notification Letter (RNL)

• Cover page of important reminders and deadlines• Notifies applicant that Form 470 has been posted

to the SLD web site• System will generate RNL for Forms 470 filed

online after form is submitted but before it is certified

• Form MUST be certified before close of Form 471 application filing window

• Contains Allowable Vendor Selection / Contract Award Date

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• Provides specific information on services, service providers selected, and contracts and/or agreements

• Provides discount calculation information• Must be filed for each funding year• Applicant certifies compliance with rules, which

include securing access to resources to make effective use of discounts

• Must be postmarked on or before the last day of the Form 471 application filing window

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WAIT AT LEAST 28 DAYS from the posting of the Form 470 beforeselecting a service providerexecuting a contract or agreementsigning and submitting Form 471

File separate Forms 471 for Priority 1 and Priority 2 services

Remove ineligible costs and document or estimate eligible costs carefully (30% Rule)

Filing online speeds processing and reduces errors42


Form 471• Obligation to Pay Non-discount Share

• Applicants are required to pay their share of the cost (the “non-discount” portion or share) — cannot be donated, forgiven or ignored

• Service providers cannot waive or credit the applicant’s share

• Offers to reduce price must be incorporated into the “total pre-discount amount”

• Service provider must bill the applicant for non-discount share of services

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Form 471• Form 471 Receipt Acknowledgment

Letter (RAL)• Cover page of important reminders and

deadlines• Provides confirmation of certain

information entered from Form 471• Data entry errors may be corrected by

submitting a copy of the RAL with the specific errors lined out and the correct information supplied — three-week deadline

• Funding request reductions may also be submitted before funding commitment 44


Application Review• Review of Applications

• Review by PIA, which may include:Competitive bidding processContracts and agreementsDiscount calculationSufficient budgetEstablishing Form 470Technology Plan

45


Funding Commitments• Points to Remember:

Provide information requested by reviewers (PIA) promptlyIf desirable, work with your state coordinator

to comply with information requestsAsk for more time if you need it

Retain documentationReview Request for Selective Review

Information fax to understand what information might be requested

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Funding Commitments• Funding Commitment Decision Letter

• Cover page of important reminders and deadlines

• FCDL reports status of individual funding requests:FundedNot FundedAs Yet Unfunded (Internal Connections)Canceled

• May receive more than one FCDL 47


Funding Commitments• Points to Remember:

Check all entries on the FCDL carefully to make sure there are no data entry errors

Review the FCDL and the SLD web site for information on requesting SPIN changes and service substitutions, if necessary

Use the information on the FCDL to prepare the Form 486

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Funding Commitments

Commitments vs. Disbursements– $2.25 billion cap is on

disbursements– SLD can commit more than $2.25

billion in a given Funding Year, because commitments have historically exceeded disbursements

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• Notification that services have started and the SLD can pay invoices

• Certifies that Tech Plan (if required) has been approved

• Certifies status under Children’s Internet Protection Act (CIPA)

• Lead members of consortia may be required to collect CIPA certifications from consortium members on a separate form (Form 479)

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Tech Plan must be approved by an SLD-certified Tech Plan Approver (list available on SLD web site)

CIPA certification(s) must be consistent with those filed in previous years

Filing online speeds processing and reduces errors

51


Form 486Form 486 Deadline

Form 486 must be postmarked no later than• 120 days after the Service Start Date featured on

the Form 486 OR• 120 days after the date of the Funding

Commitment Decision Letterwhichever is later

• If Form 486 is postmarked later than the above deadline, the date 120 days before the Form 486 postmark date will become the start date for discounted services and funding may be reduced 52


Form 486• Form 486 Notification Letter


• Provides confirmation that a Form 486 has been successfully data entered

• Copies sent to both applicant and service provider

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Invoices• Invoices — Form 472 or Form 474

• BEAR (Billed Entity Applicant Reimbursement) Form 472 filed by the applicant and certified by the service provider after the applicant receives services and pays for the services in full

OR

• SPI (Service Provider Invoice) Form 474 filed by service provider after providing services and billing applicant for its non-discount share

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Invoices• Points to Remember:

Invoices cannot be used to request SPIN changes or service substitutions

Invoices are reviewed for program compliance – respond promptly to requests for information

Service providers have 20 days after RECEIPT of a check from SLD to reimburse the applicant

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InvoicesInvoice Deadline

Invoices must be postmarked no later than• 120 days after the last date to receive service OR• 120 days after the date of the Form 486

Notification Letter

whichever is later• If Form 486 is postmarked later than the

above deadline, payment will be denied• Extensions of invoice deadlines may be

requested under certain conditions56


Invoices• BEAR Notification Letter


• Provides confirmation that a Form 472 (BEAR) has been successfully data entered

• Copies sent to both applicant and service provider

• Indicates what amounts are being paid and reason for reductions/denials

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Document Retention• In general, documents must be retained for

five years• Examples of documents that must be retained:

• Worksheets• Bid evaluation sheets• Winning and losing bids• Contracts and agreements• Invoices sent to SLD• Service provider bills sent to customer

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Appeals• Decisions of the SLD can be appealed to the

SLD or to the FCC• Generally, appeal first to the SLD• Can appeal to the FCC if SLD does not grant the

appeal• Can be filed electronically or on paper• Must be postmarked within 60 days of the SLD

decision• See Appeals Procedure in Reference Area for

specific guidance• Requests for waivers of rules must be filed

with the FCC 59


Questions

60

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