XChange SLED Speaker: Broadband, Lower-Need Districts Faring Better Under New Erate Rules

Projects focused on internal broadband connections and districts without a high number of students receiving discounted lunch have benefited from the recently adopted Erate regulations, a speaker at the XChange SLED event told solution providers.

Modifications adopted in late 2014 allow school districts to request funding for internal Internet access projects every year rather than just twice every five years, according to Shari Phillips, founder and president of Syracuse, N.Y.-based E2E Exchange.

And after many years of high-need school districts getting funding at extremely high levels with no cap, Erate has revised its discount matrix to ensure that some money gets to all schools regardless of student need, Phillips told more than 100 solution providers at XChange SLED in Atlanta, hosted by CRN parent The Channel Company.

[Related: XChange SLED Speaker: States Embracing Public Cloud, Getting Out Of Owning IT Assets]

As part of the recent changes, Phillips said, federal funding of the Erate program was increased from $2.2 billion to $3.9 billion annually. At the same time, Erate funding for voice services under Category 1 is being phased out through 2018, Phillips said, meaning that a larger pot of money will be available solely for Internet access projects.

Phillips encouraged solution providers to focus on Category 2 projects, which include internal connections, basic maintenance and managed internal broadband. Schools are now eligible to receive up to $150 per student in Category 2 funding, with even schools at which just 1 percent of students are eligible for free or reduced-price lunch receiving Erate funds to cover 20 percent of the project costs, she said.

But in districts where more than three-fourths of students are eligible for discounted lunch, Erate funding has been lowered to cover just 85 percent of the eligible project costs. Phillips said the lack of a funding cap for high-need districts meant they were previously procuring tons of equipment but often lacked the personnel to install it, meaning the supplies would often sit in hallways unused.

Wealthier school districts, on the other hand, often don't understand their needs in relation to what projects are eligible for Erate funding, because they often haven't participated in the program in the past, Phillips said. Solution providers can therefore play a major role in familiarizing these districts with the money that’s now available to them, Phillips said.

Higher-need school districts were previously eligible for Category 2 funding, Phillips said, and therefore typically have a good sense of what they’re doing.

Items eligible for Category 2 funds include cabling, routing, switches, wireless points, managed Wi-Fi and maintenance of basic local area network (LAN) equipment. Servers and voice-related expenses are no longer eligible for Category 2 funds, Phillips said.

Phillips urged channel partners to ensure that school districts aren't locking themselves into projects that they can't fund entirely on their own. Given the yearly fluctuations in funding levels and frequent changes to what's eligible, Erate money should be considered a bonus and not taken as a given, she said.

Data Systems Inc. is for the first time seeing all school districts regardless of their student income levels take advantage of Erate funding. The San Diego-based company serves low-need, average-need and high-need school districts, according to Chief Operating Officer Andrew Piland.

"Now, everybody has access to this money," Piland said. "We're seeing demand from districts we may not have seen in the past."

Requests to use Erate funding for wireless technology are coming in very strong from Datel's clients, Piland said, as they look to get rid of their old Wi-Fi networks and move to newer, faster technology.