How the 'E-Rate' Program Will Work

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Education Week has put together answers to some commonly asked questions about how the new "education rate'' for school telecommunications services will work.

When can schools apply for an "E-rate'' discount?

Once the World Wide Web site of the administering agency, the Schools and Libraries Corp., or SLC, has been activated. That is expected to occur shortly, possibly this week. Check the Web site:

What does a school need to apply?

Application forms and instructions are available at the Web site of the National Exchange Carrier Association, at

To participate, a school or its district needs a three-year technology plan that shows how the requested telecommunications services and equipment relate to other technologies and educational objectives.

The plan, which doesn't have to be complete for the first application form to be submitted, must be approved by a state agency--in most states, the department of education--or have passed muster in one of several federal technology programs.

A number of states and regional service agencies are forming consortia to apply for E-rate discounts for shared services or bulk purchases that individual schools and districts may wish to join.

Which form should be filled out first?

The school--or a designated district or state official--should first complete Form 470, which summarizes its request for telecommunications services or equipment.

Form 470 may be completed on the SLC Web site or mailed to the SLC's processing center, at PO Box 4217, Iowa City, IA 52244-4217.

Is it better to mail the form or complete it on-line?

SLC officials say they will not give preference to either method. But the Web site will offer "Help'' screens, and on-line applications may be posted a few days sooner on the Web site.

Who reads Form 470?

Service providers and vendors from across the country who might want to bid on school projects.

The SLC also will keep track of the applications so adequate revenue can be collected from telecommunications companies for the E-rate fund.

Can a school sign contracts with vendors immediately?

No, there is a 28-day waiting period. Then the school may negotiate with and select its vendors and purchase the services, using its normal procurement process and local bidding rules.

Does a school pay the full price of the services or the discounted price?

The discounted price. A school calculates its own discount, according to a matrix based on the percentage of its students eligible for the national school lunch program and its classification as rural or urban. The application instructions has the matrix and further details.

How does the school notify the SLC?

By filing Form 471. This form tells the SLC that a school has signed a contract with a vendor for specific services at a specific price.

Does it matter how quickly the forms are filed?

Here's where it gets tricky.

The discounts will be awarded on a first-come, first-served basis--except for the final $250 million, which will be distributed to the highest-poverty schools first.

There is a chance--that some experts consider slight, at least for 1998--that the fund will be emptied before all are served. So timing does matter.

This year's start-up period, however, offers a 75-day window following the activation of the SLC Web site during which every Form 471 that is accepted will be treated as if it arrived on the first day of the program. (In other words, a school that turns in a Form 471 on Day 74 gets the same priority as a school that did so on Day 30.)

Note that the 75-day window applies to Form 471, not to Form 470. If a school waits until Day 50 to file a Form 470, it will miss the 75-day window because of the mandatory 28-day waiting period.

Will there be a 75-day window every year?

No, just this year.

When does the vendor receive the funds that were discounted under the E-rate program?

When a school starts receiving services, it files a Form 486, which is not yet available. Form 486 certifies that the school is receiving services as of a certain date. The vendor will be reimbursed within 40 days of the filing of Form 486.

The school's technology plan must be approved by the time the school files Form 486.

Are pre-existing contracts and telephone services governed by state tariffs eligible for discounts?

Yes, but special rules apply. For more information, ask the SLC.

Where can a school go for more help?

In most cases, a few officials at the school district and state levels will be versed in E-rate rules and procedures and may be organizing informational meetings.

For general queries, a Help service offered by the Educational and Library Networks Coalition is available at (800) 733-7870 or the Web site:

More detailed help is available over the SLC hot line at (888) 203-8100, or by e-mail at [email protected]


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