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USAC Board to Consider Denying P2 at 83% and Below for FY 2008

The Schools and Libraries Committee will meet this Monday (July 28, 2008) for a quarterly committee meeting. Among the action items they will consider is a recommendation to deny Priority Two funding requests for FY 2008 that are at or below the 83% discount rate. This is two percentage points higher than the final discount threshold for FY 2007 which was set at 81%.

Funds For Learning calculates that over $550 million in pending Priority Two funding requests at or below the 83% discount rate will be denied if the measure is approved. This does not guarantee that requests above 83% will be approved, it is simply an indication that there will not be funding available at the lower discount rates. 

About Funding Priorities

Each request for E-rate funding falls into one of four service categories—Telecommunications Services, Internet Access Services, Internal Connections, or Basic Maintenance of Internal Connections. Requests in the Telecommunications and Internet Access service categories are given priority over other requests and are called “Priority One” requests. Requests in the remaining categories are assigned a “Priority Two” designation.

The SLD must set aside money for all of the ‘potentially fundable’ Priority One requests received within the application period for a given funding year. Any remaining available money for Priority Two requests is committed to those applicants with the highest discount rate. Priority Two requests are funding for each discount rate percentage until available funding is depleted for the year.

The amount of funding available for a funding year can increase from the allotted $2.25 Billion from the Universal Service Fund for the E-rate program. Unused funds from previous funding years are typically made available to supplement the amount of available funding each year. The SLD is also allowed to issue commitments in excess of actual available funding based on estimated under-utilization by applicants each year.




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