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FY2016 Eligible Services List: A Closer Look

On Friday, September 11, 2015, the Federal Communications Commission (FCC) released the Eligible Services List (ESL) for Funding Year 2016. In its FY2016 ESL, the FCC formalized many of the eligibility changes implemented in its Seventh Report and Order and Second E-rate Modernization Order. In addition, the ESL (and accompanying Order) offered clarifications of eligibility for certain types of products and services. In summary, changes and clarifications in the FY2016 ESL include:

Category One Services

  • The ESL now lists Leased Lit Fiber, Dark Fiber, and Self-Provisioned Broadband as eligible services in the ‘Eligible Data Transmission Service and Internet Access’ section, removing the separate “Fiber” section that was present in the FY2015 ESL. A note was added to “remind applicants that they must seek bids for lit fiber service and fully consider all responsive bids before selecting and requesting support for a dark fiber or a self-provisioned broadband network.”
  •  A new note was added to the ESL stating that “Applicants may seek special construction funding for the upfront, non-recurring costs for the deployment of new or upgraded facilities. The eligible components of special construction are construction of network facilities, design and engineering, and project management.” The note was intended to clarify what types of charges qualify as “special construction,” noting that “other eligible large upfront or non-recurring costs will be considered as separate Category One costs.”
  • A new note was added to indicate that “network equipment and maintenance and operation” are eligible for Category One funding when purchased for existing self-provisioned networks and/or dark fiber.  In the Order, the Commission noted that “for existing dark fiber or self-provisioned networks, applicants will not be required to seek new bids for a lit fiber service in order to receive funding to upgrade or refresh their Network Equipment or to re-contract for maintenance and operation contracts.
  • As a clarification, ISDN was added to the list of eligible voice services.

Category Two Services

  • The Commission clarified that “only basic firewall protection provided as part of Internet access is eligible as a Category One service and that “firewall protection that is provided by a vendor other than the Internet access provider or priced out separately will be considered a Category Two internal connections component.”
  • In its Order, the FCC noted that “virtualized functionalities such as Software Defined Networking (SDN) and Network Function Virtualization (NFV) – solution that virtualize eligible routing, switching, controller, and firewall functionalities – are eligible and may be a more cost effective solution than traditional wireless local area network components,” while reminding stakeholders that eligibility is limited to the virtualization of eligible functions only.
  • A clarification was added to the Basic Maintenance section of the document, stating that support for bug fixes, security patches, and technical support contracts is not limited to the “actual work performed under the agreement” in order to better align with the language in the 2010 Clarification Order.
  • The ESL Order also reiterated that advanced network security functionality (beyond basic firewall functions) and network management and monitoring functions other than those provided as a part of a Managed Internal Broadband Service remain ineligible for E-rate discounts.

You can find a full copy of the ESL and accompanying Order by clicking here

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