The FCC’s Wireline Competition Bureau has released the final Eligible Services List (ESL) for Funding Year 2026, formally adopting the approach proposed earlier this fall. The updated ESL clarifies how certain software-based and remote services are treated under E-rate and provides additional guidance aimed at reducing confusion for applicants during the application and review process.
The Bureau also authorized USAC to open the FY2026 Form 471 filing window and waived the requirement that the final ESL be released at least 60 days before the window opens, citing the need to keep the funding timeline on track.
Software-based services move under Internal Connections
The most significant change in the FY2026 ESL involves software-based and remote services. In the past, some of these services were split between Internal Connections and Basic Maintenance of Internal Connections (BMIC), often leading to inconsistent treatment and application errors.
For FY2026, the FCC revised the Internal Connections category to explicitly include:
- Software-based services
- Bug fixes and security patches
- Software-based technical assistance
- Remote configuration changes
These services are now to be requested with the Internal Connections equipment they support, rather than as basic maintenance. The FCC noted that this change is intended to address longstanding confusion that has resulted in competitive bidding risks and funding denials.
At the same time, the FCC narrowed the scope of BMIC. Under the final ESL:
- Configuration changes performed in person remain eligible as BMIC.
- Online and telephone-based technical support, software upgrades, and security patches have been removed from BMIC.
Managed Internal Broadband Services remain unchanged, but under review
The final ESL does not make structural changes to Managed Internal Broadband Services (MIBS). MIBS remains a distinct Category Two service option for FY2026.
However, the FCC acknowledged in its discussion that commenters raised concerns about the overlap and confusion between MIBS and BMIC, particularly when distinguishing proactive managed services from traditional break-fix maintenance. While no immediate revisions were adopted, the Bureau signaled awareness of these issues and may revisit them in future proceedings.
Firewalls and security: clarification, not expansion
The FCC did not expand E-rate eligibility for cybersecurity tools in the FY2026 ESL. Instead, the final ESL maintains the existing approach, while recognizing that modern network equipment increasingly integrates security-related functionality.
The Bureau emphasized that eligibility determinations remain tied to the underlying function of the equipment or service and that the ESL does not create new categories of eligible security services. Applicants should continue to review firewall and security features carefully to determine whether they fall within existing eligible categories.
DNS, DHCP, and core network functions
The final ESL does not add new standalone eligibility entries for DNS, DHCP, or IP address management services. However, the FCC reaffirmed that eligibility decisions are based on how a service supports eligible broadband functions, and that guidance published by USAC remains informal and non-binding.
Applicants deploying these functions as part of eligible Internal Connections or managed solutions should continue to document how those services support the operation of E-rate-eligible networks.
What this means for applicants
For schools and libraries, the FY2026 ESL brings greater clarity in one of the most error-prone areas of the program: software and remote services. By consolidating these services under Internal Connections, the FCC has reduced the risk of misclassification and improved alignment with how modern networks are operated.
At the same time, the ESL preserves the existing Category Two structure for FY2026. Applicants should continue to plan procurements carefully, particularly when distinguishing among Internal Connections, MIBS, and BMIC, and monitor future FCC actions that could further refine or simplify those categories.
Funds For Learning will continue to review the final ESL in detail and provide guidance to help applicants understand how these changes may affect their FY2026 E-rate strategies.
