UPDATED AS OF JANUARY 2020
Every year, as soon as the holidays are over, we start to receive questions about E-rate. As you probably know, E-rate is a government reimbursement program designed to deliver affordable telecommunications and internet access to schools, libraries and rural healthcare organizations. Like with any government program, E-rate is full of rules, regulations, processes and procedures – all of which can lead to confusion and frustration for you and your customers if you’re not up to speed. Your eligible customers probably know a lot about E-rate, but arming yourself with the basics will go a long way in positioning you as a knowledgeable resource they can count on.
To get you started, we’ve rounded up a list of frequently asked questions to highlight some of the essential elements of the program. For the sake of this discussion, we will focus on schools and libraries. To learn more about rural healthcare, check out our FAQs dedicated to that program.
Before we get into the FAQs, let’s look at one of the fundamental concepts around E-rate: the two ways reimbursement works.
- Service Provider Invoice (SPI) – Using the SPI method, the service provider charges the customer for the portion of the bill for which they are responsible. On the back end, the service provider submits the SPI form to obtain reimbursement form the government for the remainder of the total amount.
- Billed Entity Applicant Reimbursement (BEAR) – Using the BEAR method, the service provider’s invoice will reflect the full amount of the service. The customer is responsible to pay the full amount and file the BEAR form to receive reimbursement from USAC, the pseudo-government agency tasked with administering the E-rate program.
In plain terms, under the SPI method, the government cuts the service provider a check; under the BEAR method, the customer gets the check. Although service providers can choose to offer one or the other, Nitel can accommodate either method, so customers can choose the reimbursement method that best fits their needs.
Common E-Rate Schools & Libraries Program Questions
- When is the filing window for the E-rate schools and libraries program?
The filing window for schools and libraries is open from mid-January through late March. During this time, schools and libraries can submit a formal request for services (Form 470) and start fielding bids.
- What is a Service Provider Identification Number (SPIN) and why is that important?
A Supplier Identification Number is a nine-digit number assigned to service providers by the USAC when the relevant FCC paperwork is filed. The SPIN number should be used when filing for an E-Rate deal to indicate the supplier chosen as a network provider. Nitel’s SPIN is 143028851 and should be filed under Network Innovations, Inc.
- What services are covered by E-rate funding?
There are two categories of supported equipment and services. Category One includes the services needed to support broadband connectivity to schools and libraries. This includes data transmission services, internet access and voice services. Category Two includes the internal connections needed for broadband connectivity within schools as well as the basic maintenance of these internal connections. Eligible broadband internal connections include firewall services and components, routers, switches, and wireless controller systems, among others. You can see a full list of the eligible services for both Category One and Category Two here.
- Is SD-WAN covered by E-rate funding?
The list of Category Two eligible services states “software supporting the components on this list used to distribute high speed broadband throughout school buildings and libraries” is also covered. Based on information we have received, we believe SD-WAN could be placed under this category. If your customers are interested in using E-rate funding to cover SD-WAN services, be sure to check with a trusted E-rate consultant.
- What else can be covered by E-rate funding?
Most taxes and surcharges are reimbursable, as well as fees such as installation, construction, change, and contingency.
- Can my customer choose any service provider?
Customers can choose a service provider based on the factors that are most important to them, but cost-effectiveness must be weighed more heavily than any of the other factors. Once the request for services has been posted to the EPC Center for E-rate for 28 days, the customer can move forward with their selection. If the customer wishes to choose a service provider that is not the most cost-effective, they must submit an explanation detailing the reasons for their decision.
- What if my customer is unhappy with the provider they select?
Although the funding year is July 1 through June 30, customers that are unhappy with their provider can request an operational SPIN change. The key thing to remember is that the amount of funding the customer receives will not change if they switch providers.
- When will my customer find out if they are approved?
Applicants usually find out mid-year whether or not they have been approved. If services have already been installed and the customer has already been paying the full amount, the customer will receive a credit or receive the overpayment amount in a lump sum.
- What if my customer is denied SPI funding?
In the event of an SPI denial, Nitel will file an appeal on the customer’s behalf. We will continue providing service and billing the customer for the full amount if a contract has already been signed.
- What is the California Teleconnect Fund (CTF) and what does it cover?
For customers in California, CTF is available to cover 50% of the remaining cost of services. It applies to:
- K-12 schools
- Community colleges
- Government-owned health care providers
- Community based-organizations
Hopefully the above questions help you guide your customers through the E-rate process. On your next E-rate opportunity, be sure to engage your Nitel channel manager, or head over to n-Tellipro to get a quote. With Nitel, we pay standard commission rates on all E-Rate deals, and all spiffs and promotions apply. If you have a question we haven’t covered, please reach out to your Nitel channel manager or email our E-rate specialists at firstname.lastname@example.org.