On March 6, representatives from Funds For Learning met with key FCC E-rate staff to discuss how to simplify the category two budget system. Funds For Learning also discussed the challenges and confusion applicants are having with the Form 470 drop down menu as they are causing funding delays and denials unnecessarily.  

In regard to Category Two reform, Funds For Learning is proposing starting in funding Year 2020 and improved framework we refer to as “0‐1‐2‐3.”  
  • 0: there should be zero ineligible network infrastructure. Cost allocations are confusing and are no longer necessary because of Category 2 budgets.  Furthermore, items such as I.T. security and monitoring functions are required elements for reliable Internet connections. Applicants should not be penalized for managing their network effectively.  
     
  • 1: each applicant should have a single Category Two budget governing all their sites. Allowing applicants to allocate dollars according to their specific needs will reduce the digital inequity that can exist between sites, particularly between older and newer buildings.  
     
  • 2:  the per student budget factor should be doubled. In our most recent survey, 44.9% of school respondents indicated that the budget should be set at $250 per student. Another 24.3% indicted it should be set at $350 per student. We noted that increasing the budget factor would only impact the sites that have currently maxed out their existing budget. We estimate that there are 24,330, sites that have used at least 95% of their budget.
     
  • 3: triple the budget floor. Nationwide, the average Category 2 budget is $75,857. This is nearly eight times greater than the budget floor. Because of the fixed costs associated with many I.T. projects, the budget floor needs to be raised to a more reasonable amount. 
Funds For Learning left a detailed analysis and data for the FCC to consider as they evaluate their options going forward. Funds For Learning’s C2 analysis can be viewed here.