E-Rate changes FAQ

What's E-Rate?

E-Rate, or Universal Services Schools and Libraries program, is a discount set by the Federal Communications Commission (FCC) and administered by the Universal Service Administrative Company (USAC) that schools and public libraries receive on telecommunications, internet and internals connections. Depending on a library's organizational structure the director, the fiscal officer and the IT staff may be involved in E-Rate filing.

What's happened?

On Friday, July 11, the Federal Communications Commission (FCC) approved an Order and Further Notice of Proposed Rulemaking to make significant changes to the E-Rate Program. The Order maintains E-Rate's current budget and makes available additional funds to support Wi-Fi over the next two years. The program will phase out support for non-broadband services and voice services, such as pagers and phones, in order to use those funds for broadband services.

What does the FCC mean by broadband services?

The FCC is focusing services eligible for Category 2 (also known as Priority 2) reimbursement on broadband service. This includes routers, switches, wireless access points, internal cabling, racks, wireless controller systems, firewall services, uninterruptable power supplies (UPS) and software supporting those components. It also includes equipment that combines functionality such as routing and switching. Further, managed Wi-Fi support and equipment that supports caching or caching functionality is also included. A full list of eligible services will be made available in the fall.

What is included in managed Wi-Fi?

Eligible managed Wi-Fi expenses include the management and operation of the LAN/WLAN, including installation, activation, and initial configuration of eligible components, and on-site training on the use of eligible equipment.

What does the FCC mean by non-broadband services and voice services?

Voice services includes all costs incurred for the provision of telephone service and circuit capacity dedicated to providing voice services including: local phone service, long distance service, plain old telephone service (POTS), 800 services, Centrex, wireless telephone service and interconnected VOIP.

Non-broadband services include paging and other services that may use broadband but do not provide it such as email, text messaging, voicemail and web hosting.

When is the phase out of non-broadband services happening?

Beginning in E-Rate fiscal year 2015, the FCC will no longer provide E-Rate funding for paging, email, voice mail and web hosting and other services that are not related to providing broadband. Applicants may continue to seek funding for individual data plans and air cards but only when they can demonstrate that that is the most cost-effective way to connect library locations to the Internet.

In addition, the FCC will reduce funding for voice support in each E-Rate fiscal year by subtracting the discount rate applicants receive for voice services by 20 percent in each funding year. In E-Rate fiscal year 2015, the discounts applicants receive for voice services will be reduced by 20% from their discounts rates for other eligible services. In E-Rate fiscal year 2016, the discounts applicants receive for voice services will be reduced by 40% from their discounts rates for other eligible services.

After the first two years of the phase down of non-broadband service, the Bureau will issue a report evaluating the impact of the reduction in support for voice services. If the FCC takes no further action, the voice services phase down will continue.

E-Rate Fiscal Year (FY)

Calendar Dates of FY

Phased out


July 1 2015-June 30 2016

Voice services reduced by 20%; No funding for email, voice mail, web hosting and other non-broadband services.


July 1 2016-June 30 2017

Voice services reduced by 40%


July 1 2017-June 30 2018

Voice services reduced by 60%


July 1 2018-June 30 2019

Voice services reduced by 80%

My library's budget depends on the E-Rate reimbursement for telephone service. What can we do to plan for the phase out voice services?

Although costs and quality will vary by service provider, generally Voice-Over-IP (VOIP) telephone service is less costly than POTS (regular telephone service). If your library's budget depends on E-Rate reimbursement for telephone service, you may want to consider moving to a VOIP system.

At my library system's branches, broadband needs are very small. Are there any changes that affect it?

The FCC has created an exemption to the competitive bidding rules for Internet access services that offer at least 100 Mbps downstream and 10 Mbps upstream and have a pre-E-Rate discount price of $3,600 or less annually. This $3,600 annual limit is the pre-discount amount per library branch. For example a library system with three library branches could qualify for this exemption if it purchased 100 Mbps and 20 Mbps upstream internet access services for each of its three branches at a cost of $250 per month per branch.

How is the funding for Wi-Fi calculated?

Funding for Wi-Fi for most public libraries is calculated at $2.30 per square foot or a floor for libraries at or below 4000 square feet of $9,200. This means that if a library is smaller than 4000 square feet, the library would apply for Wi-Fi funding at the same level as a 4000 square foot library. If a library serves a population of more than 250,000 in an urban or suburban area or a population of less than 250,000 but more than 100,000 in an urban area, the calculation is $5.00 per square foot. Note that the definition is per library location, not per library system. This is a new model that the FCC will be testing for the next two years.

If my library is planning to upgrade our Wi-Fi, is it best to plan this to happen in the next two years?

If a Wi-Fi upgrade in E-Rate fiscal year 2015 or 2016 makes sense to your library, you might want to ask for the funding in those funding years since a new vote by the FCC commissioners would be required after fiscal year 2016 to allocate funding for Wi-Fi specifically.

Are technology plans still required to be filed with the State Library of Ohio?

No, certified technology plans are no longer required for E-Rate funding. However, the State Library of Ohio encourages libraries to have a technology plan either in addition to or integrated in to an overall strategic plan.

Other important updates include:

  • A simplified process for multi-year contracts of 5 years or less.
  • Required electronic filing.
  • Clarification on consortium purchasing.
  • Waiver requests available for internet connections between schools and libraries.