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To BEAR, or to SPI: that is the question.

With the passing of the invoicing deadline for recurring services, I am reminded of a question I am frequently asked: “should my school BEAR or SPI to receive our E-rate approved discounts?” Unfortunately, this question does not have a simple or straightforward answer. The FCC leaves the decision to applicants, and there are many factors for them to consider. And for a larger school district, there is one significant phenomenon they may have to account for: large school district applications take longer for USAC to process.

The table below shows the average funding commitment award date for E-rate telecommunications discounts for FY2009-FY2011 for schools with 50,000 or more students. The table also shows the percentage of funding awards that utilized the reimbursement, or BEAR, process.

For E-rate applicants with 50,000 or more students, it is quite common for funding commitments to arrive mid-way through the funding year. For this reason, it is not surprising that approximately 70% of these applicants utilize the reimbursement method.

As a general rule, vendors are not required to speculatively discount their services until a funding commitment decision has been made and a Form 486 has been submitted by the school and approved by USAC. In these cases, because there is not an E-rate funding commitment to bill against, service providers bill the full price of their service and applicants seek reimbursement after paying in full. The final result is that for many larger school districts, the BEAR reimbursement method becomes a necessity rather than a choice.

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