E Rate Modernization Overview

CONFIDENTIAL © Copyright 2015. Aruba Networks, Inc. All rights reserved

E-RATE OVERVIEW

What is E-Rate? What is Changing?

Presented by

– Dan Rivera [Aruba Networks]

– Chris Oskuie [Brocade]


Aruba Networks

HQ: Sunnyvale, CA

Founded in February of 2002

$730M in Revenue

2,000 Employees

Leader in Unified Access & NAC

40,000 Customers World-wide

NASDAQ: ARUN

Comprehensive list of Industry Partners

Ecosystem • Channel • Distribution


Addressing the Needs of Digital Learning

SECURE & SIMPLE NETWORK ACCESSProvide differentiated access to network & enable BYOD

INTELLIGENT APPLICATION HANDLINGBring curriculum to life with interactive & multimedia apps

FLEXIBLE SOLUTIONSInvest in architecture & management right for your schools

SIMPLE CLASSROOM MANAGEMENT Empower teachers in digital classrooms

CLASSROOM-GRADE WI-FIBoost 1:1 learning on mobile devices

Background

BrocadeToday

•Founded in 1995

•Headquartered in San Jose, CA

•$2.2+ Billion in annual revenue

•Operating in 160 countries

•4,100+ employees

• Campus Wired Ethernet Networking

• Data Center Switching/SAN

• Service Provider

• Software Defined Networking

• Network Function Virtualization

Focus

Hundreds of K-12 Customers in US

E-rate Participation for 17 years

Many National, State/Local Government Contracts

Dedicated Partner/Reseller Community

Classroom Floor/IDF Core/MDF

ICX 6450-C ICX 7450 ICX 7750

Confidential | Brocade | © 2015

Strategic Partnership

Engineering Co-Development

Brocade Network Subscription

Now with Aruba

E-RATE BASICS


What is E-Rate?

Created in the Telecommunications Act of 1996

– First funding year in 1998 (Year 1)

– Funding years are July 1 through June 30 (FY2014: July 1, 2014 – June 30, 2015)

Provides subsidies of up to 90% for eligible services

Available to schools and libraries

Administered by the Universal Service Administration Company (USAC)

– Specifically, the Schools & Libraries Division (SLD)

– Universal Service Program overseen by FCC

Original Funding Cap of $2.25B, adjusted for inflation

– Currently at $3.9 Billion (Funding Year 2015)

– Funding committed to Category 1, then (if funding remains) Category 2


E-Rate Eligible Services

CATEGORY 1 SERVICES (Formerly Priority 1)

– Telecommunications services

– Telecommunications

– Internet access services

CATEGORY 2 SERVICES (Formerly Priority 2)

– Broadband internal connections

– Managed internal broadband services

– Basic maintenance of eligible broadband internal connections


Category 2 Eligible Services List (FY2015)

-Access Points (LAN/WLAN)

-Wireless LAN Controllers

-Network switches

-Routers

-Cabling, connectors, and related

components

-Racks that support eligible internal

connections components

-Uninterruptible Power Supply (UPS)

-Caching

-Firewalls

-Software supporting each of the

components on this list used to

distribute high-speed broadband

throughout school buildings and

libraries

Eligible Broadband Internal Connections Components

Notes: (1) Functionalities listed above that can be virtualized in the cloud, and equipment that combines eligible

functionalities, like routing and switching, are also eligible. (2) A manufacturer’s multi-year warranty for a period up to

three years that is provided as an integral part of an eligible component, without a separately identifiable cost, may be

included in the cost of the component. (3) For funding year 2015, caching is defined as a method that stores recently

accessed information. Caching stores information locally so that the information is accessible more quickly than if

transmitted across a network from a distance. A caching service or equipment that provides caching, including servers

necessary for the provision of caching, is eligible for funding.



• Services provided by a third party for the operation, management, and monitoring of eligible broadband internal connections components are eligible managed internal broadband services.

• E-rate support is limited to eligible expenses or portions of expenses that directly support and are necessary for the broadband connectivity within schools and libraries. Eligible expenses include the management and operation of the LAN/WLAN, including installation, activation and initial configuration of eligible components, and on-site training on the use of eligible equipment.

• In some managed services models, the third party manager owns and installs the equipment and school and library applicants lease the equipment as part of the managed services contract. In other cases, the school or library may own the equipment, but have a third party manage it for them.

Eligible Managed Internal Broadband Services(e.g. Managed WiFi)


Basic Maintenance of Eligible Broadband

Internal Connections Components

E-rate support is available for basic maintenance and technical

support appropriate to maintain reliable operation when provided

for an eligible broadband internal connections component.

The following basic maintenance services are eligible:

• Repair and upkeep of eligible hardware

• Wire and cable maintenance

• Configuration changes

• Basic technical support including online and telephone

based technical support

• Software upgrades and patches including bug fixes and

security patches


E-Rate Process

• ESL Released

• Application Window Announced

• Form 470/RFP Filed

Bids Submitted

• Bids Reviewed

• Service Provider Selected

Form 471 Filed • PIA Review

• FCDL Issued

• Form 486 Filed

Service Starts

• Invoices Submitted (BEAR or SPI)

Funding Disbursed


E-Rate FY2015 Timeline

APPLICANTS CAN POST FORM 470

DRAFT ESL RELEASED

DRAFT ESL COMMENT DATE

DRAFT ESL REPLY COMMENT DATE

FINAL ESL RELEASED

FORM 471 APPLICATION

WINDOW OPENS (JANUARY 14, 2015)

LAST DAY TO POST FORM 470 (FEBRUARY 26, 2015)

FORM 471 APPLICATION

WINDOW CLOSES (MARCH 26, 2015)

CAT2 NON-RECURRING INSTALLATIONS CAN BEGIN

(APRIL 1, 2015)

RECURRING SERVICES BEGIN (JULY 1, 2015)

1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 1 Feb 1 Mar 1 Apr 1 May 1 Jun 1 Jul

WHAT CHANGED?E-Rate Modernization Order


E-rate Modernization Order (E-rate 2.0) Highlights

Focus on Wi-Fi

Reorientation of Services

Category Two Budgets

Maximum amounts set

Eligible Services

Significant changes to the ESL

Discount Methods

Calculations / Classifications

Cost-Effective Purchases

Pricing Transparency

Preferred Master Contracts

Consortia Purchasing Encouraged

Streamlined Application Process

Multi-year Form 470/471

Tech Plan Eliminated

Competitive Bid Exemptions

Electronic Filing Requirement


E-rate Modernization Order (E-rate 2.1) Highlights

Increased Funding Cap

$3.9 Billion FY2015

Category Two Budgets

Extended through FY2019

Increased Library Support

Up to $5.00/sq’ Cat 2 Budget

Urban Areas Redefined

Population greater than 25k

Cat 1 Construction Costs

Amortization Policy Suspended

Applicant match spread over 4 years

Equalizing Lit/Dark Fiber*

Modulating Equipment Eligible

Cat 1 Self-Construction*

Can start Jan 1 of Funding Year

Must be most cost-effective

Additional Cat 1 Support*

Up to 10% additional support when States

match funds for high speed broadband

construction

Must be most cost-effective

*Starting in FY2016

Category 2

Specific Changes


E-Rate Modernization Order (E-rate 2.0)

Change in Nomenclature

– Priority 1, now Category 1

– Priority 2, now Category 2

$3.9 Billion Funding Cap

FY2015

– Category 2 has annual target budget

of $1B; Keyword “Target”

5-Year Category 2 Budget

Maximum for Applicants

– Schools: $150/student ;

Libraries: $2.30/sq.ft & $5.00/sq.ft

– Rolling Budget, eliminates 2-in-5 rule

Flexible spending patterns

Subscription-based pricing

Fresh start in FY2015


E-rate Modernization Order (E-rate 2.0)

School # of

Students

Pre-Discount Cat2

Budget

Post-Discount Cat2

Budget

Elementary

School

500 500*150 = $75,000 $63,750

Middle School 750 750*150 = $112,500 $95,625

High School 1000 1000*150 = $150,000 $127,500

Cont. HS 50 50*150 = $9,200 (floor) $7,820

District Office 0 $0 (NIFs don’t qualify) $0 (NIFs don’t qualify)

Category Two Budget Example

Sample School with a Discount Rate of 85%



NEW DISCOUNTING

Category 2 maximum discount

reduced to 85%

FASTER RESPONSE

Target FCDL issue date of

Sept.1 of each funding year

FUNDING FLOOR

Establishes a funding floor of

$9,200 in Category 2 support

ADDS & REMOVES

(+) Managed internal broadband

eligible in FY2015 (Managed LAN &

WLAN)

(--) Voice & Video components

removed from Cat-2 in FY2015 ESL

PRICING TRANSPARENCY

Item 21 embedded in Form 471



PREFERRED MASTER

CONTRACTS

Bureau will designate specific national

contracts as “Preferred Master

Contracts”

Allows applicants to bypass the Form

470 filing requirement

For equipment purchases only; no

labor services

EARLY INSTALLATIONS

Category 2 non-recurring installations can begin on April 1 of

funding year

Eliminate RFP process

Choose pre-negotiated contracts


Aruba Product Eligibility*

?

*Per FY2015 ESL. Subject to change. ** When purchased as a managed service.

Category 1

Specific Changes


E-rate Modernization Order

Voice services being phased down beginning FY2015

– 20-Point reduction each year. FY2015 max discount 70%, FY2016 max

discount 50%, etc.

Legacy telephone features eliminated

– Paging, Text, Directory Assistance, Inside wire maintenance

Email, Web Hosting, Voice Mail eliminated

Wireless Data Plans and Air Cards eligible in certain

circumstances only

– Only eligible when proven to be most cost-effective way to connect students

General Program

Changes


E-rate Modernization Order

Discount Method Modified

Discounts are District-Wide

Urban/Rural status now determined for entire school district or library system

New rules for Discount Surveys

Document retention increased to 10-Years from last date of install

Contract signature requirements eased

Appeals must be filed with USAC first

Applicants can receive BEAR disbursements directly from USAC

Invoice deadline extensions will be automatically granted one-time

for 120-Days

– No other extensions will be granted


IMPORTANT LINKS

Aruba E-Rate Resources

http://www.arubanetworks.com/solutions/primary-education/e-rate/

http://community.arubanetworks.com/t5/Primary-K-12-Education/gp-p/Primary-K-12-Education

USAC E-Rate Modernization Resources

http://www.usac.org/sl/tools/modernization-order/default.aspx

FCC (E-Rate Specific) Website

http://www.fcc.gov/guides/universal-service-program-schools-and-libraries

E-Rate Modernization Order

http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0723/FCC-14-99A1.pdf

Second Modernization Order

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-14-189A1.pdf

FY2015 ESL

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-14-1556A1.pdf

http://www.arubanetworks.com/solutions/primary-education/e-rate/

http://www.usac.org/sl/tools/modernization-order/default.aspx

http://www.fcc.gov/guides/universal-service-program-schools-and-libraries

http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0723/FCC-14-99A1.pdf

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-14-189A1.pdf

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-14-1556A1.pdf

THANK YOU

Dan Rivera

Chris Oskuie

E Rate Modernization Overview

Technology

Transcript of E Rate Modernization Overview