CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
E-RATE OVERVIEW
What is E-Rate? What is Changing?
CONFIDENTIAL © Copyright 2014. 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
Leader: 2014 Wired & Wireless Magic Quadrant
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
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 $2.4 Billion (Funding Year 2014)
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 servicesTelecommunicationsInternet access services
CATEGORY 2 SERVICES (Formerly Priority 2)Broadband internal connectionsManaged internal broadband servicesBasic maintenance of eligible broadband internal connections
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
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
4 Aug
3 Sep
18 Sep
17 Oct
5 Jan
21 Mar
1 Apr
1 Jun
WHAT CHANGED?E-Rate Modernization Order
Category 2Specific Changes
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E-Rate Modernization Order (E-rate 2.0)
Change in Nomenclature Priority 1, now Category 1Priority 2, now Category 2
$2 Billion Additional Funds for FY2015 & FY2016
– 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
– 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)
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 attachments will be
public* Per Draft ESL. Subject to change.
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E-rate Modernization Order (E-rate 2.0)
PREFERRED MASTER CONTRACTSBureau will designate specific national contracts as “Preferred Master Contracts”Allows applicants to bypass the Form 470 filing requirementFor equipment purchases only; no labor services
EARLY INSTALLATIONS
Category 2 installations can begin on April 1 of
funding year
Eliminate RFP process
Choose pre-negotiated contracts
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Category 2 products*
-Network switches-Routers-Wireless LAN Controllers-Access Points used in LAN/WAN environment-Cabling, connectors, and related components -Racks that support eligible internal connections components-Uninterruptible Power Supply (UPS)necessary for basic power protection for eligible equipment
-Caching-Firewalls-Software necessary to support this list of eligible broadband internal connections components, including Client Access Licenses for LAN/WLAN networks-Improvements and upgrades to components on this list of eligible broadband internal connections
*Per Draft ESL – Subject to Change
Eligible Broadband Internal Connections Components
Notes: (1) Functionalities listed above that can be virtualized, 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 and provided as an integral part of an eligible component, without a separately identifiable cost, may be included in the cost of the component.
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Category 2 products*
Services provided by a third party for the operation, management, and/or monitoring of eligible broadband internal connections components.
For example, managed internal broadband services may include services necessary to manage and repair the LAN/WLAN network, such as diagnostic services, 24-hour network monitoring, or helpdesk support.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.
*Per Draft ESL – Subject to Change
Eligible Managed Internal Broadband Services(e.g. Managed WiFi)
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Category 2 products*
*Per Draft ESL – Subject to Change
Basic Maintenance of Eligible Broadband InternalConnections Components
E-rate support is available for basic maintenance and technical support appropriate to maintain reliable operation when provided as a component of eligible broadband internal connections.
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
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Aruba Product Eligibility*
Access Points Controllers Switches
ClearPassCentralAirwave**?
*Per Draft ESL. Subject to change. ** When purchased as a managed service.
Category 1Specific ChangesThat will indirectly affect Category Two
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E-rate Modernization Order
Voice services being phased down beginning FY201520-Point reduction each year. FY2015 max discount 70%, FY2016 max discount 50%, etc.
Legacy telephone features eliminatedPaging, Text, Directory Assistance
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
Discounts calculated district-wide Document retention increased to 10-Years from last date
of install Contract signature requirements eased Applicants can receive BEAR disbursements directly from
USAC Manufacturers eligible products database program will
be terminated Invoice deadline extensions will be automatically granted
one-time for 120-DaysNo other extensions will be granted
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USAC Applicant Training
Philadelphia - Tuesday, October 7, 2014
Minneapolis - Monday, October 13, 2014
New Orleans - Thursday, October 16, 2014
Portland - Tuesday, October 28, 2014
Los Angeles - Thursday, October 30, 2014
St. Louis - Tuesday, November 4, 2014
Orlando - Tuesday, November 11, 2014
CONFIDENTIAL © Copyright 2014. Aruba Networks, Inc. All rights reserved
USEFUL LINKS
USAC Website
www.usac.org/sl
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
Draft ESL
http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0804/DA-14-1130A1.pdf