E-Rate 

• Massachusetts Libraries
• History
• Services
• Forms
• Discounts
• Audits and Record Keeping

E-Rate is the federally-funded program that provides discounts on telephone, telecommunications (data lines), Internet, and internal wiring projects for libraries and schools. E-Rate operates on an annual cycle with applications due in the winter and funding commitments (discounts) being made the following summer or early fall.

Massachusetts Libraries

Most public libraries in Massachusetts have benefited from E-Rate discounts through one of the eight automated resource sharing networks (e.g., CLAMS, C/WMars, MVLC) that serve public libraries. Networks average 45-50% offsets for their telecommunications connections, the many data lines that link library buildings and their branches to the network central site. Most networks no longer apply for Internet support due to the requirements of the Children's Internet Protection Act (CIPA).

The E-Rate program is fairly complex, and the information provided on the MBLC Web site is intended only to serve as a starting point. Always, the best and most authoritative web site for information on the E-Rate is the SLD (Schools and Libraries Division) site at www.sl.universalservice.org.

The state E-Rate coordinator for Massachusetts libraries is:

History

The Telecommunications Act of 1996 provides for discounted rates to schools and libraries for a variety of telecommunications services. The Act directed the Federal Communications Commission (FCC) to develop rules concerning these discounts. A Federal State Joint Board released its final rulemaking on May 8th, 1997. Since then, a series of decisions have been issued by the FCC — each is called a "Report and Order" — to alter or clarify how the program is run. The history of FCC actions can be found on the FCC web site.

An independent administrative agency, the Schools and Libraries Corporation was spun off of the FCC to manage all applications and requests for discounts from libraries and schools. In January, 1999, the SLD changed its name and governance to the Schools and Libraries Division of the Universal Service Administrative Company (USAC), and is now know as the SLD. This program of discounts for schools and libraries has popularly become known as the "E-Rate" (Education Rate).

E-Rate beneficiaries should visit the SLD Web site regularly to see if any changes have affected their funding commitments or the application process.

Services

Libraries are eligible for discounts on four classes of services. Originally three, a new category of "Basic Maintenance" was added beginning SLD Year 2005 (July 2005 - June 2006).

Telecommunications Service

• Plain old telephone service, or POTS, which includes local and long distance calls charges, cellular phone and PCS charges,
• date lines, such as, 56K, DSL, and T1 service,

Internet Service

Monthly or annual charges for your Internet connection, from both large and small providers, such as Genuity/Level 3, Comcast, RCN, FASTdial, Earthlink, or AOL.

Internal Connections

LAN cabling and equipment to support telecommunications connections, such as ethernet hubs, routers, and network file servers. This does NOT include electrical wiring.

Basic Maintenance

Basic "Break/Fix" maintenance contracts on Internal Connections equipment that you have specifically identified by make, model and physical location, such as routers network servers. No configuration changes, network monitoring, staffing costs would be allowed.

Computers are NOT eligible for discounts (with the possible exception of network file servers). If your library is requesting discounts for internal wiring and relate equipment, be sure to check SLD's list of eligible equipment (PDF). This list does change over time, and the FCC has recently committed to annual updating of the eligible equipment and services list. A new searchable eligible products database is now being piloted.

Discounts are not automatic. In order to obtain discounts, libraries or consortia file a series of forms with the Schools and Libraries Division and go through an approval process. For anything beyond plain old telephone service requests, libraries must also file a technology plan (see Technology Planning) with the Board of Library Commissioners early on in the process. Approval of the plan is required before discounts can begin to flow.

Forms

To obtain E-Rate support libraries must go through a series of three steps:

1. notification that the library wants a service (Form 470),
2. notification that the library has selected and contracted with a bidder (Form 471), and
3. notification that service delivery has commenced. (Form 486)

If you are a member of an automated library network, you will need to submit a Form 479 to your network headquarters (not the SLD) in addition to a "Letter of Agency" that authorized the network to purchase services on your behalf. Your network headquarters will coordinate these activities.

Once services start, E-Rate beneficiaries may need the following forms:

1. notification that service delivery has commenced or the equipment has been installed (Form 486)
2. when a library has chosen to pay the full cost of the service to a vendor, and then requests reimbursement for the discount from the SLD, (Form 472, or the "BEAR" form)
3. when a library needs to adjust reduce the amount of a funding commitment or adjust the timeframe for receipt of services (Form 500)

Discounts

Discounts range from 20% to 90% based on the community's level of financial need (as measured by students' eligibility for the National School Lunch Program in the community) and rurality. We estimate that most libraries receive discounts of 40% to 50% on their services. In general, a public library will have the same discount as its school district. A detailed description of the discounts calculation process is available on the 471 Instructions or Online Guide on the SLD Web Site.

Important: The method for calculating library discounts changed in 2002. Libraries should no longer be using the "weighted" discount methodology. Please follow current discount calculation instructions on the SLD Web site. For the last two program years, SLD has recalculated library discounts and given the library the higher discount if the new method was beneficial to the library. Beginning in FY2006 (SLD Program Year 2005), you will not be given the higher discount if you miscalculate using the older method.

Audits and Record Keeping

Libraries should always be prepared for an audit from the SLD. During the course of the application and implementation of services, libraries make a variety of certifications. An audit of the library's use of E-Rate funding is always a possibility. Libraries are required to retain their records for 5 years.

Due to the controversial nature of the E-Rate program in congress, and due to some specific administrative requirements placed on the USAC by the Office of Management and Budget, a strict Program Integrity Assurance (PIA) process has been implemented and, more recently, a "Task Force on the Prevention of Waste, Fraud and Abuse" has been created. Significant new certifications are now required on the Forms 470 and 471.