On June 12, 2025, the Universal Service Administrative Company, USAC, released an updated guide on Service Substitutions for the E-rate Program. Service substitutions allow applicants to request modifications to products or services listed on an approved FCC Form 471.
Current FCC Service Substitution Rules
Under current FCC rules, service substitutions must meet the following criteria:
- The service or product has the same functionality;
- The substitution does not violate any contract provisions or state or local procurement laws;
- The substitution does not result in an increase in the percentage of ineligible services or functions; and
- The applicant certifies that the requested change is within the scope of the controlling FCC Form 470, including any associated RFPs, for the original services.
Additionally, if a service substitution results in a change of the pre-discount price, funding will be based on the lower of the original or substituted service price. The two E-rate service categories (Category 1 and Category 2) are not considered functionally equivalent for substitution purposes.
Updates to FCC Service Substitution Rules
While many of the core requirements for service substitutions remain unchanged, a key clarification has been removed, which may affect how applicants handle discrepancies discovered after services have already been delivered.
Previous USAC guides included language for applicants who may have discovered that products or services delivered were different from those approved on the Form 471. In that instance, applicants could file a correcting service substitution, even if the discovery occurred after the last day to receive service. That paragraph has since been removed, leaving applicants with no guidance on how to make corrections after the service delivery window has closed.
What does this mean for E-rate Applicants?
The implications of the updated USAC guide continue to unfold, but it is important to stay proactive as late corrections may no longer be supported. To avoid funding issues, applicants should verify service details and submit any substitutions prior to the last day to receive service. Applicants should continue to monitor service delivery closely throughout the funding year and file substitutions as early as possible if changes are necessary.
Funds For Learning is here to assist if you have any questions about how this update affects your current E-rate projects or service substitutions.
