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FCC Releases Rule Changes for E-rate Category Two Funding

On Tuesday, December 3rd, the Federal Communications Commission (FCC) released its highly awaited rule changes regarding E-rate Category Two (Internal Connections) funding. The order permanently established the five-year Category 2 budget system for all schools and libraries starting Funding Year 2021 (FY2021). The order also made Funding Year 2020 (FY2020) a bridge year by extending the current cycle a sixth year and increasing all applicants’ budgets by 20%.

Below are some key highlights from Order 19-117A1 that the FCC enacted to further its goal of bridging the digital divide for all Americans and ensure all students and library patrons have access to high speed broadband.

Rules Changes for E-rate Funding Year 2020:

  • The current five-year Category Two cycle will extend through FY2020 giving applicants one more year to access their remaining budgets
  • Budgets for all schools and libraries will increase by 20%
  • The pre-discount funding floor at each site will also increase by 20% from $9,793 to $11,751
  • No services will be added or removed from the Eligible Services List for FY2020

Rules Changes Starting Funding Year 2021:

  • The FCC will permanently adopt the five-year Category Two budget cycle approach with the next cycle starting FY2026
  • Category Two budgets will reset for all E-rate applicants
  • District-wide and library system-wide Category Two budgets will be adopted for all eligible schools and libraries
  • The pre-discount funding floor at each site will increase to $25,000 for districts and libraries with ten or fewer sites
  • Budget multipliers will adjust to $166.44 per student for schools and $4.50 per square foot for all libraries
  • Applicants will no longer be required to notify USAC of equipment transfers between sites
  • Applicants will only be required to report enrollment and library square footage once during the five-year cycle

The FCC’s full order detailing the rule changes for E-rate Category Two funding can be reviewed here.

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