FCC Provides Guidance on E-Rate Category Two Budgets

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The Federal Communications Commission’s (FCC or Commission) Wireline Competition Bureau (WCB or Bureau) has released a Public Notice providing guidance related to E-Rate program category two budgets that were adopted in the Category Two Report Order, effective beginning in funding year (FY) 2021.  Category two budgets are now calculated at the school district-level based on the total number of full-time students in a school district, rather than on a school-by-school basis.

In addressing some confusion within the adopted rules, the Commission made the following clarifications: (1) if state law considers a charter school to be part of a school district, the charter school will be presumed to be a part of the district for purposes of calculating the category two budget and discount rate, unless the charter school demonstrates financial and administrative independence from the district; (2) independent schools that are attended by students from multiple districts on a part-time basis only should continue to count these students as full-time students; (3) students enrolled at brick and mortar schools should be counted as full-time students regardless of whether they receive virtual instruction during the COVID-19 pandemic; and (4) E-Rate applicants, in compliance with the FCC’s cost allocation rules, must remove the costs of any use of shared networks equipment by a non-instructional facility.

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