The Category 2 budget figures have been updated to match the inflation-adjusted cap of the Universal Service Fund E-rate program. Applicants planning their Funding Year 2017 funding requests should make note of the new budget cap calculators.
The budget cap amounts are used to calculate the maximum potential E-rate discounts an applicant can receive at a single school or library site over a five-year period. The Category 2 (C2) budget amounts were first introduced as part of the FCC’s E-rate Modernization Order. They are intended to insure that there is adequate funds for all E-rate applicants to request discounts for on-campus computer networks (should they choose to do so). The budget amounts are calculated on a per student basis for schools, and a per square foot basis for libraries. The budget for libraries also varies depending upon its rural or urban status. There is a per building minimum budget cap that is available for very small school and library facilities.
 
The Modernization Order set the E-rate program’s annual maximum contribution rate at $3.9 billion. The discounts committed to applicants by USAC cannot exceed this amount in a given year. The Modernization Order also established that this maximum amount would be tied to inflation. In 2016, the inflation adjustment factor was 1.00%, and, now, in 2017, it is 1.30%. The inflation adjustment amount is applied to the overall fund, as well as to all the individual C2 budget cap calculations.
 
Funds For Learning estimates that more than 75% of applicants have the opportunity to apply for Category 2 funds in FY2017.