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Stakeholders Agree on C2 Reform

On August 16, the initial comment period for the Federal Communications Commission’s Category Two Notice of Proposed Rulemaking closed, with the FCC receiving more than 100 comments from E-rate stakeholders nationwide.  Funds For Learning’s filings included suggestions for regulatory reform as well as a program-wide analysis of C2 utilization from Funding Years 2015-2019.
Comments were received from schools, libraries, service providers, equipment manufacturers, state Departments of Education, consultants, and industry trade groups, and support was almost unanimous for the following regulatory reforms:
  • Permanently retaining the Category Two budget/cap system
  • Enforcing the C2 cap on a systemwide basis (instead of site by site)
  • Retaining Basic Maintenance, Managed Internal Broadband Services, and caching on the program’s Eligible Services List
  • Adding C2 support for advanced network security technologies
While opinion is split between “rolling” or “static” budget periods, almost all commenters who expressed an opinion favored a total reset of prior years’ C2 utilization status starting in FY2020.  Other reforms supported by multiple stakeholders include:
  • Eliminating C2 “subcategories” (IC/BMIC/MIBS) and collapsing the Eligible Services List into only Category One and Category Two services
  • Raising the cap calculation factor to at least $250/student and $5/square foot for libraries
  • Adding self-provisioned network management and monitoring equipment to the Eligible Services List
  • Eliminating C2 equipment transfer restrictions
  • Reducing the need for cost-allocations by:
    • Allowing C2 equipment to be installed in Non-Instructional Facilities (NIFs)
    • Clarifying that eligible equipment may be used for any purpose
    • Allowing multi-year maintenance and support agreements to be funded as a one-time cost in a single Funding Year
  • Raising the budget “floor” for less populated and smaller locations to at least $25,000
A complete list of individuals and organizations submitting initial comments along with links may be downloaded here. The deadline for reply comments is September 3. 
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