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SLD Posts New Version of Eligible Services List

The Schools and Libraries Division Oct. 19 posted a new version of its eligible services list, this time providing a "framework" for its determinations and highlighting changes that have been made since Jan. 24, 2001. The new document is available at

As a way of clarifying the difference between Telecommunications Services, Internet Access and Internal Connections, the SLD noted that Internal Connections is the only category of service that permits the purchase of components by the applicant.

The SLD also provided more clarification of an appeals decision involving the Brooklyn Public Library, specifying that in the category of Telecommunications Services or Internet access, if a fee for installation or other upfront services is greater than $500,000, it must be prorated over a period of at least three years.

The SLD specified that training is eligible if it is basic, limited instruction in the use of eligible equipment from the service provider, but not if it amounts to staff development for teachers.

The SLD also said it would not fund arrangements between applicants and service providers that reach "essentially the same result as a prohibited purchase of a Wide Area Network." Among the criteria that it said it would examine were whether the applicant had a contractual right to the full capacity of the vendor's facilities, whether ownership would transfer to the applicant at the end of the lease and whether the provider sought a substantial payment for upfront capital costs.

Among the highlighted revisions are:

  • A lengthy codification of the SLD's previous positions on evaluating "on-premise equipment for end-to-end service" as an eligible telecommunications service. Some applicants have been trying to shift their networking arrangements to the Telecommunications Services or Internet Access categories to make them eligible for Priority One funding. Under these arrangements, the SLD noted, the equipment "must be directly related to the end-to-end provision of service by the service provider." Otherwise, it said, the equipment would be considered internal connections.
  • File servers used principally as a source of content or to supplement storage requirements of personal computers are not eligible for support. Eligible servers are intended to serve as a conduit for information. DHCP servers were explicitly added to the eligible services list. Servers used solely as archive or data warehouse servers, print servers and proxy servers are ineligible. However, if those features are included with core network operating system software, and the server is not dedicated to that purpose, they can qualify. Filtering software was explicitly listed as ineligible, as specified in the new Children's Internet Protection Act.
  • Antennas in wireless Local Area Networks are eligible. If they are used in a workstation or PC, only the cost of the antenna is eligible, rather than the full cost of the network interface card. The vendor must allocate out the ineligible portion of the cost of a NIC. Antennas used to receive radio and television broadcast signals, or radio signals from cable TV operators are not eligible.
  • "Back-up equipment" used in the context of spare parts is not eligible, but "back-up equipment" used in the context of data protection is when used as part of an eligible product.
  • Bundled internal connections products may be partially eligible. The SLD cited as an example a product that contains an audio/video code (conditionally eligible), a microphone (ineligible) and a camera (ineligible). The SLD said such a product could be funded if the equipment manufacturer provided a cost breakdown of the components, and only the eligible portions were proposed for discounts.
  • Wired or wireless PBXes that have bundled ineligible components can be totally eligible but only if the applicant determines that this is the most cost-effective choice without considering the benefits related to the ineligible features.
  • The SLD provided the same guidance on routers: namely that if a product has an ineligible component that is not priced or sold separately, the full product can be eligible, but only if the applicant determines that it is the most cost-effective choice without considering the ineligible components.
  • Internal connections components that "include functionality for real-time or near real-time voice or video over IP, if otherwise eligible," are eligible for discount. However, "extra-cost Internet access services that go beyond basic conduit access to the Internet," such as fees for transport of Voice Over IP, for provision of Virtual Private Network services, or for specialized content or applications, are not eligible.
  • Satellite dishes for WANs are not eligible as internal connections, but may be eligible as a leased service in the other categories of service.
  • Client access licenses for eligible software such as a network operating system are eligible. Client access licenses for word processing or spreadsheet software are not.
  • Charges for configuring eligible internal connections are eligible to the extent that the charges are for the configuration of eligible hardware and software.
  • Distance learning is eligible if provided as a telecommunications service, but services that include their own content are not eligible.
  • Inside wire maintenance plans are eligible as a telecommunications service, but plans that provide network management of customer-owned wire or equipment, in addition to maintenance, are not eligible.
  • A telecommunications circuit that provides Interactive TV is eligible for discount, provided that the service does not include its own content.
  • Telecommunications links to Internet2 are eligible for discount, but not Internet2 membership dues or fees.
  • Satellite service that provides a telecommunications service is eligible for discount. Use of satellite services to participate in academic lectures and/or distance learning is eligible. Satellite service for Internet access can also qualify for support under certain conditions. However, satellite communication that provides a broadcast service is not eligible.
  • Application Service Providers (ASPs) or other entities that "make available software applications, specialized services, and/or file storage over the Internet, for a fee," are not eligible for support. E-mail services are permitted.
  • The definition of "basic conduit access" to the Internet was explicitly expanded to include Domain Name Services (DNS), Dynamic Host Configuration Protocol (DHCP), e-mail and caching services, when included as a standard component of a vendor's Internet access service.
  • As before, bundled Internet access can be chosen if the content is minimal and the applicant determines that the service is the most cost-effective means for obtaining Internet access. That evaluation, it said, must be made without considering the benefits related to ineligible features. The SLD explained that filtering service, caching service and firewall service can be accepted in a bundled service if they meet this criteria.
  • Construction that is incidental to the installation of components, that is designed to restore a facility to pre-installation conditions, is eligible.
  • Dark fiber, that is, fiber optic cable that is unused, or "dark" is conditionally eligible. Capital costs for transmission capability that does not have a direct and immediate use by eligible applicants are not eligible. Service providers can lease fiber capacity that does not include modulating electronics to schools or libraries if the applicant provides the electronics.

The SLD also provided its first formal definition of "common carrier," a requirement for those who provide supported Telecommunications Services. Such a provider, it said, "is an entity that provides telecommunications (transmission service between sites, where the user of the service chooses the communication end points, and the form or content of the user's information is not changed) on a 'common carriage basis.' 'Common carriage' means that the provider is either recognized by a regulatory authority as a common carrier or holds itself out to provide service generally to the public for a fee. Some categories of service (such as cellular, paging and satellite) may not be subject to regulatory authority."

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