IT Infrastructure

Matrix-NDI Telecom 10 Podcast 3: E-rate Funding for K-12

In this episode of our Telecom 10 podcast, we’re speaking with Matrix-NDI Account Executive, Jason Cardwell, about how K-12 schools receive technology funding through the federal E-rate program.


TANA: Hello, and welcome back to the Telecom Ten with Matrix-NDI. My name is Tana, and today I have one of our account executives, Jason Cardwell, with me. Today we are going to dive into E-rate for K through 12 education.

So, Jason, I know nothing about E-rate. I hear it a lot here at work. Could you give us kind of a basic overview of what E-rate is, how it works, all that stuff?

JASON: Yeah, I'll keep it high-level, and I'll go based on my experience with it. I'm certainly not an expert by any means. All information around E-rate can be found online. There's something known as the Universal Service Administration Company and the abbreviation is USAC (U-S-A-C), and most people want any information on E-rate can Google USAC or Google E-rate and they can find all of the information they'd like.

Most schools are familiar with E-rate - and what E-rate means to a school is schools don't always have access to money to procure technology and tech funds. So, E-rate is a program that, based on the free and reduced lunch of the school district itself, it is awarded so much money from E-rate, or a bucket of money that they can apply for, that will allow them then to purchase technology based on those funds.

Nothing is necessarily guaranteed. All schools go through an E-rate process. It's like an RFP (a request for proposal) or RFB (request for bid), where they'll define what their specifications are, they'll release the specifications out to the general, um you know, I'd say, you know, industry like us, right. So, people in our industry, the general tech companies that they can choose to participate in E-rate and they'll take a look and say, "Yep we have a solution that matches - let's go ahead and figure out what the pricing would be and then we'll submit it."

Once it's all been submitted and the school has defined for themselves, they have the bids they desire, there's typically some dates wrapped around it - they'll go through and make a decision on who it is that they want to procure and then they'll typically then let those companies know that they've been awarded the business. From that standpoint, everything gets submitted to USAC and then USAC it's up to USAC to determine the funding amount and how much they'll fund and turn around and offer that back to the school district.

Schools sometimes have people staffed for it. Sometimes school districts don't - and they'll hire consultants to walk them through the process because there's a lot of T's and C's, a lot of governmental language, and forms that need to be submitted and filled out if you're going to do it properly.

There also has to be, like anything, the checks and balances, so on the back end, we have to be able to document, or the school has to be able to document exactly what the technology is and it has to be well defined because the funding that they would receive is based on the type of technology and it's categorized that way in their funding request. So, it has to align perfectly when it's submitted back into USAC in order for the funding to basically complete itself.

And so, when we talk about E-rate, it's a really big topic and so it comes down to having the initial discussion first about what the organization, or the school in this case, is looking to achieve and trying to find out like how much are they looking for and what options would they have based on E-rate - because it's categorized based on funding. And then we can sort of help navigate and define that for them.

TANA: OK, so this, I don't know if you can answer this, but this sounds like it would be for public schooling only, correct?

JASON: So public schooling, yes, because of the free and reduced piece. So, I would say 100% on that. Private schools, I'm not sure where the line is drawn with private schools in regards to E-rate because I don't think there'd be a free and reduced need there, but I'm not versed enough to know.

TANA: I know they do like scholarships and things like that, but I'm not sure if they have that program there in general but just, that was just a question, you know, just in case you knew about it.

But as far as like the benefits of E-rate, that's pretty clear you know it's a good way for schools to maybe get into technology that they wouldn't have been able to afford themselves, things like that, upgrades here and there.

As far as challenges, do you think or have you noticed any challenges when it comes to schools trying to utilize those funds, whether that be gaining access to those funds or the technology they want to implement aligning with the E-rate program in general?

JASON: Yeah, I think some challenges are around what can you apply for when it comes to funding and what part of the technology solution can it fund? Because not everything is under the E-rate funding bucket, if you will. And so, they may want different types of technology but not all of it may be E-rate. Maybe portions of it is, and so having that defined up front helps you better basically understand what areas you'll be funded and reimbursed for, versus not.

That's sort of one key. The other key around your question I think is just the concerns with how our industry has changed, how it shifted, how businesses are buying technology today. It used to be a capital purchase and E-rate was designed I believe around that.

TANA: Could you define what a capital purchase is?

JASON: Yeah, capital purchase would be is that they're looking to buy a technology and they want to buy it for the full price of that technology today. And that's how most of the years prior to all E-rate funding have happened. But since COVID and since the shift, a lot of schools have taken their applications that were on site, move them into the cloud - and when you're in the cloud, unless the carrier is willing to work with you on creating a similar experience, it's most likely going to be more of an operational or subscription model where you're going to purchase the software per user and you're going to pay a per month fee per user, and that billing then comes monthly.

Unless the carrier you work with, which can happen, and we have experienced working with carriers support schools this way, and they can take instead of 12 months of subscription fees they can say, "Well, look, we can bundle this up front in an annual one year term and we can invoice you for that amount up front" so we can try to take advantage of capital purchases - or at least the way businesses or schools in this case would make a capital investment.

TANA: OK. So, they are starting to kind of look into ways that they can foster utilizing these funds outside of the old traditional method.

JASON: Well, the E-rate process hasn't changed to support that yet. That's the key. Whether that not that it will happen, I'm not sure. Most schools we've spoken with voiced their concern about that. I think the only thing that can be done is a loud enough voice, meaning enough people within the industry in and of itself, maybe even the carriers themselves too, working with the schools to push back to the government to say, "Look, here's a need. Here's why the needs defined, and we're just responding to the need."

But schools have obviously shown us their willingness to adopt the new technologies in the quote/un-quote cloud, and to subscribe to those technologies. So, how do we work with the government to have E-rate change the way it funds things, so the categories that it funds can shift and support a subscription model.

TANA: OK. So as far as, you know, schools usually operate from, you know, late August to end of May or so. Most projects in schools happen during the summer, correct?

JASON: Oh yeah, 100%, For the most part, that's the case. We're in a unique, you know, backside of COVID now so we have supply chain issues, so a lot of what has been standard and normal no longer is. Everything in the world is shifted and so, this year in particular, like I think about how much business we do with schools or summer is way different than it has been in the previous years because the supply chain is now in such arrears based on the shipment of equipment - that we're having to work with schools to figure out, OK, how are we going to then now roll this technology out in the future months that are during the school year and how do we get creative to support schools on that.

So, it's not a disruption, but at the same time we have to find a way to work together because some of that work needs to be done during the business day or the business/school hours.

TANA: Without disrupting lessons and things like that.

JASON: Exactly.

TANA: And then when does - do you - you don't know this, this is fine but when do schools get the notification of how much funding they're getting from rate things like that because obviously they have to be notified how much money they are going to receive and then make decisions on which projects they want to do and then make the plan for us to come in and you know complete these installs which obviously we just talked about our happening at odd times this year but . . .

JASON: Yeah, so the E-rate funding - so they'll be able to to to know up front like if there's a bucket of money being provided to a school based on the free and reduced lunch they'll know what the the general size or scope of that money bucket is. And then E-rate opens up - and it has in July already.

So, if schools are interested in leveraging this next incoming year of E-rate funds, they can make their request today as a matter of fact and go out and say, "Here's a technology we're looking to buy next year. We know how much money exists in our bucket of funds. Here's the technology we're looking for. So, we're going to put together what our criteria is, we're going to release it, we're going to have it on the market for so many days until we make a decision on who it is that we want to move forward with."

And then the dates in and of itself go into in our case a calendar year 2023, so although it opens today, most schools will probably start the process around November-December, and then those dates go into 2023 before there's a final date that they have to have decisions completed - they have to have submitted the bid they're choosing to E-rate in and of itself to meet the deadlines for funding next year which then starts July 1. So the E-rate cycle, if you will, is a July one for the year, so it's a fiscal year that it runs.

TANA: OK, awesome. Well thank you so much for sharing all that. That is all the time we have today I'm sure we will be back talking about E-rate at some point soon, especially if any of those guidelines change as far as capital versus operational costs.

JASON: And can I add one last point to that?

TANA: Of course.

JASON: So, most of the manufacturer partners and the carriers that we work with, they have E-rate specialists as well. So, if a school doesn't have a consultant - they need some assistance - we would engage on their behalf if they'd like. There's no charge to them. Some of the E-rate specialists that we can access that can sit down, understand what they're trying to accomplish, where they want to go from here, how E-rate can fit that, and then what the buckets of criteria are that they'd have to meet and how they'd have to define that bid request to make sure that they could then apply for funding. And we can provide those resources to them at no charge.

TANA: Oh, awesome. That's good to know. Well, thank you so much for joining us today, Jason. It was great having your insight around E-rate in general.

JASON: Yeah, you're welcome, Tana. Thank you. I appreciate it.

TANA: And thank you guys for tuning into this episode of the Telecom 10 with Matrix-NDI. My name is Tana, and if you'd like to learn more about Matrix-NDI or E-rate, you can find our website at or you can find us on Facebook, Instagram, and Twitter with the handle @matrix_NDI. Thanks again.

Thanks again!

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