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FCC Releases ESL for FY 2010, Authorizes Opening Filing Window

The FCC has released and Report and Order and Further Notice of Proposed Rulemaking related to eligible services within the E-rate program. The FCC also authorizes the SLD to open the Form 471 Filing Window for FY 2010.

Funding Year 2010 Eligible Services

In the Report and Order issued today, the FCC highlights that interconnected VoIP and text messaging are eligible for E-rate discounts. The FCC also clarifies that video on-demand servers, ethernet, web hosting, wireless local area network (LAN) controllers, and virtualization software are eligible for E-rate discounts.

Interconnected Voice Over IP

The FCC designates that interconnected Voice over IP (VoIP) is eligible as a “supported special service,” noting that the Commission has not designated VoIP as either a telecommunications service or as an information service.  The FCC will permit interconnected VoIP to be provided by non-telecommunications carriers at least until such time that interconnected VoIP is classified as a telecommunications service.

The FCC agreed with comments submitted by Funds For Learning that “any interconnected VoIP hardware that does not meet the test for Priority 1 services in the Tennessee Order should be considered Priority 2 internal connections” and ineligible for Priority 1 funding.

Additionally, CIPA compliance is not required for applicants that receive funding only for interconnected VoIP service. However, if an applicant receives funding for other Internet access services or Internal Connections, CIPA certifications will be required.

Virtualization Software

The FCC also agreed with comments submitted by Funds For Learning that virtualization software should be eligible when used for eligible server functions.

Video-on-Demand Servers

In its draft ESL to the FCC, USAC recommended that video-on-demand servers be considered fully ineligible for E-rate support. The FCC rejected this recommendation allowing for the eligible components of video-on-demand servers to continue to receive E-rate discounts.

Unbundled Warranties

The FCC also clarifies in the Report and Order that unbundled warranties are not eligible for E-rate discounts as basic maintenance. An unbundled warranty is a separate agreement outside of a maintenance agreement that allows for broken equipment to be fixed or replaced. Funds For Learning notes “unbundled warranty” listed in the index, but not within the body of the Eligible Services List for Funding Year 2010. The description for Basic Maintenance in the FY 2010 ESL released today remains unchanged from the FY 2009 ESL.

E-mail Archiving

The FCC has determined that e-mail archiving is not eligible for E-rate discounts. The FCC offers the following to describe and define e-mail archiving:

…e-mail archiving [is] a form of electronic recordkeeping, often compressing e-mail files to make available greater in-box space. For example, when e-mail is archived to reduce in-box size, reduce hard drive space, and retain records for future retrieval, it constitutes the storage of end-user files and is ineligible for E-rate discounts. Although E-rate eligible e-mail services can include a short-term storage component that enables the user to view current e-mails, any long-term storage service is ineligible for E-rate discounts …

The final Eligible Services List for Funding Year 2010 can be found here.

Comments Sought on Eligibility of Certain Services

The FCC is seeking comments on their tentative conclusions that the following should not be eligible for E-rate discounts:

  • Firewall services which are separately priced from a vendor’s Internet access service
  • Anti-virus and anti-spam software
  • Scheduling services
  • Wireless Internet access applications
  • Web Hosting services

The FCC is seeking comments on whether web hosting services should be removed from the Eligible Services List in future years, or potentially be classified as a Priority 2 service. The FCC’s rationale for this is, “…while many school districts find web hosting to be a useful way to post information for parents and the community, we do not believe it is essential to the educational purposes of schools and libraries.”

The FCC is also seeking comments on modifying the process related to the approval of the ESL. The FCC desires the draft ESL to be submitted by USAC no later than March 30th each year. Currently USAC has until June 30th to submit the draft to the Commission. The changes would allow the FCC more time to consider the draft.

Comments can be submitted to the FCC for a period of 30 days after the Notice of Proposed Rulemaking is published to the Federal Register. Reply Comments are due 45 days after publication.

The Report and Order and Notice of Proposed Rulemaking can be found here.

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