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USAC Recommends Funding FY 2009 Priority Two Applications at 85%

The USAC Schools and Libraries Committee held a non-quarterly Board meeting and approved a recommendation to the FCC requesting authorization to issue commitments for priority two requests at 85% and above for the 2009 E-rate Funding Year. On July 31, the FCC authorized $900 million in unused funds from previous years to be used to supplement the amount of funding available for FY 2009. 

In addition to requesting approval to issue commitments, USAC is seeking authorization to deny Funding Year 2009 priority two requests at or below the 60% discount rate as there is not enough available funding for these requests.

About E-rate Funding Priorities

Each request for E-rate funding falls into one of four service categories‚ÄîTelecommunications 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 ‚Äòpotentially 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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