On April 30, 2026, the FCC adopted a Report and Order and Order on Reconsideration that brings a number of changes to the E-rate program. Most of the attention has gone to the new USAC competitive bidding portal, which arrives in Funding Year 2028. The same Order also includes several smaller changes that are worth understanding now, since they roll out across the coming funding years.
1. Switching service providers mid-year
The Order sets up a new way to request funding that covers the full cost of service when you move between providers during a funding year. It takes effect in Funding Year 2027.
If you switch from one provider to another mid-year (or move to a different service from the same provider), USAC can approve an increase to your funding request for the transition.
To qualify, you need to:
- File partial funding year requests from both providers during the application filing window, using your best estimate of the transition dates
- Indicate on your Form 471 that the requests are for a transition of service
- Have funds available below the program funding cap
Because the amount depends on when your changeover actually happens, keep track of your cutover dates so your request lines up as closely as possible.
2. The 90 percent rule applies to all Category One services
The FCC clarified that the 90 percent safe harbor rule applies to all Category One services, not only internet access. In plain terms: if at least 90 percent of a recurring Category One service, whether data transmission or any other Category One service, will be used for an eligible purpose during the funding year, the remaining ineligible use is treated as ancillary, and you do not have to cost-allocate it.
One limit to note: off-campus use does not count as ancillary. If a service is used off-site, that portion still has to be cost-allocated.
3. Increasing bandwidth mid-year without a new bid
If you need more bandwidth partway through the year than your original Form 470 supports, the FCC added a competitive bidding exemption so you can increase it without running a new competitive bid.
Two things to keep in mind: your funding stays capped at the amount you originally requested, so you cover any increase in cost yourself. And if you want funding for the higher bandwidth range in future funding years, you will need to file a new Form 470 with the upgraded bandwidth as a part of the scope of services.
4. Bids without pricing can be disqualified
The Order clarified how you can handle vague bids. A bid response that leaves out pricing, or that tells you to contact the vendor to get a price for the services and time period you asked about, can be disqualified as non-responsive. That holds even if your Form 470 did not specifically say pricing was required. If you are evaluating bids, this gives you clearer grounds to disqualify responses that do not include real pricing you can compare.
5. More flexibility on invoice deadlines
The Order adds two new options for invoice deadlines, covering both the Form 472 (BEAR) and Form 474 (SPI):
- You can request a single 120-day extension of your original invoice filing deadline from USAC, as long as you make the request no later than 15 days after the original deadline.
- If your request for reimbursement was filed on time but was rejected by USAC, you now have a 60-day grace period to resubmit a corrected version.
Taken together, these changes ease a number of longstanding frustrations and “gotchas” across the E-rate process, and should help streamline program administration in Funding Year 2027 and beyond.
Want to know how these changes affect your applications? Bring your questions to the August My E-rate Guides (MEG) webinar on Thursday, August 6. Register today.
