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SLD Recommends Denying FY 2008 Priority Two Requests at 85% and Below

The USAC Schools and Libraries Committee is recommending that all FY 2008 Priority Two funding requests at or below 85% be denied due to a lack of available funding.  The current discount threshold for FY 2008 is 88%.  The FCC usually approves Priority Two discount threshold recommendations made by USAC within a matter of weeks. Once approved by the FCC, funding denials will be formally made by the SLD in the next several funding waves.

If the recommendation made to the FCC is approved, it will leave Priority Two requests at 86% and 87% undecided. According to a Funds For Learning analysis, there is currently $331 million pending at 86% and 87% for Priority Two requests in Funding Year 2008. 

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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