e rate modernization overview
TRANSCRIPT
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]
CONFIDENTIAL © Copyright 2015. Aruba Networks, Inc. All rights reserved
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
CONFIDENTIAL © Copyright 2015. Aruba Networks, Inc. All rights reserved
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
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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
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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
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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.
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Category 2 Eligible Services List (FY2015)
• 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)
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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
Category 2 Eligible Services List (FY2015)
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
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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
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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
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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
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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
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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%
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E-rate Modernization Order (E-rate 2.0)
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
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E-rate Modernization Order (E-rate 2.0)
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
CONFIDENTIAL © Copyright 2015. Aruba Networks, Inc. All rights reserved
Aruba Product Eligibility*
?
*Per FY2015 ESL. Subject to change. ** When purchased as a managed service.
Category 1
Specific Changes
CONFIDENTIAL © Copyright 2015. Aruba Networks, Inc. All rights reserved
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
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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
CONFIDENTIAL © Copyright 2015. Aruba Networks, Inc. All rights reserved
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
THANK YOU
Dan Rivera
Chris Oskuie