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E-rate Modernization: E-rate Overview

The new e-rate program will focus on discounts for broadband services in schools and libraries. This guide is a work in progress and updates will be added as they are issued.

What Is E-rate?

E-rate is a federal program that lets public schools and libraries apply for discounts on eligible telephone/voice and internet services and is managed by the Universal Service Administration Company (USAC). Beginning with funding year 2015 (July 2015-June 2016), the focus of the e-rate program will be on broadband services; telephone/voice services will be phased down 20% per year until these discounts are no longer supported and technology plans are no longer required.

Basic Steps to Apply

  • Submit Form 470 describing the eligible services you want; you may not choose a provider until the form has been online and available for a minimum of 28 days (Summer-Fall)
  • Submit Form 471 about your chosen provider and the costs of services; you must submit this form before the deadline set by USAC (Winter--USAC will announce the opening and closing dates which usually occur Jan-Mar)
  • You will get a Receipt Acknowledgement Letter (RAL) after filing your Form 471
  • The Program Integrity Assurance (PIA) reviews all applications and contacts applicants if they have any clarifying questions
  • Funding Commitment Decision Letters (FCDL) are mailed beginning in late spring and continually throughout the year as applications are reviewed
  • Submit Form 486 after receiving your FCDL stating that you are receiving services (File within 120 days of receiving your FCDL)
  • Submit Form 472 if you are paying the service provider in full and want to receive the discounted amount as a reimbursement; if you pay the service provider the discounted amount they will submit Form 474 to get reimbursed by USAC

If you want to file for e-rate for eligible services that your organization receives thru the NC Office of Information Technology Services (OITS), be sure that you are on Kathryn Wilson’s listserv.  Kathryn works for OITS and you can contact her at

E-rate Modernization Page

Category One and Two Services

Starting with FY2015, products and services eligible for E-rate discounts will be divided into Category One and Category Two instead of Priority 1 and Priority 2.

Category One consists of the services that provide broadband to eligible locations, including data links that connect multiple points, services used to connect eligible locations to the Internet, and services that provide basic conduit access to the Internet.

  • The service types included in Category One are telecommunications services, telecommunications, Internet access services, and voice services – generally similar to the service types included in the former Priority 1.
  • However, some of the services included in the former Priority 1 will not be eligible for FY2015.
  • The highest discount level for Category One will be 90 percent; the discount matrix will not change.

Category Two consists of the internal connections equipment or services necessary to bring broadband into, and provide it throughout, schools and libraries. Connections are limited to broadband connections used for educational purposes within, between, or among instructional buildings that comprise a school campus or library branch; basic maintenance of these connections; and services that manage and operate owned or leased broadband internal connections.

  • The service types included in Category Two are internal connections and managed internal broadband services, and basic maintenance of internal connections – generally similar to the service types included in the former Priority 2.
  • Again, some of the services included in the former Priority 2 will not be eligible for FY2015.
  • The highest discount level for Category Two services will be 85 percent. Applicants eligible for a 90 percent discount for Category One services will be eligible for an 85 percent discount for Category Two services. Other discount levels will not change.

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