III. Discounts

Q: What are the levels of discount for which eligible schools and libraries may apply?

A: The Commission established a matrix that will provide discounts ranging from 20% to 90% on all commercially available telecommunications services, Internet access, and internal connections. The level of discount will be based on a school's or library's level of economic disadvantage and its location in an urban or rural area. Here is the Commission's discount matrix:

 SCHOOLS AND LIBRARIES DISCOUNT MATRIX

  HOW DISADVANTAGED?

 DISCOUNT LEVEL

 % of students eligible for national school lunch program  (estimated % of US Schools in category  urban discount (%)   rural discount (%)

 <1

 3

20

25

 1-19

 31

 40

 50

20-34

19

 50

 60

 35-49

 15

 60

 70

 50-74

 16

 80

 80

 75-100

 16

 90

 90

Q: How will a school's level of economic disadvantage be determined?

A: A school's level of economic disadvantage will be defined by the percentage of its students eligible for either a free or reduced price lunch under the national school lunch program. That is, a school will determine the percentage of its students whose family income falls within 185% of the poverty line. It is important to note that schools need not participate in the national school lunch program in order to compute their level of economic disadvantage for purposes of applying for universal service discounts. A school that either does not participate in the national school lunch program or that experiences a problem with undercounting eligible students may use federally approved alternative mechanisms to determine the percentage of their students eligible for the school lunch program. A description of federally approved alternative mechanisms can be found at 34 C.F.R. 200.28(a)(2)(i)(B). For example, a school may choose to conduct a survey or use eligibility for a tuition scholarship program to determine the percentage of its students eligible for the national school lunch program for purposes of applying for universal service discounts.

Q: How will a library's level of economic disadvantage be determined?

A: A library's level of economic disadvantage will be based on the percentage of students eligible for the national school lunch program in the school district in which the library is located.

Q: Will each individual school and library be required to apply for discounted services separately and submit its percentage of students eligible for the national school lunch program to the universal service administrator?

A: No. If a state, group of schools or libraries, or a school district applies for discounted services on behalf of its schools, the procurement officer must certify to the universal service administrator the percentage of students in each of its schools that is eligible for the national school lunch program. The school district or the state may decide to compute the discounts on an individual school basis or it may decide to compute an average discount. (See question 14.) In either case, the state or the district should strive to ensure that each school receives the full benefit of the discount to which it is entitled. Similarly, libraries ordering discounted services at the library system level must certify to the percentage of students eligible for the national school lunch program in each of the school districts in which its branches are located. The library system may compute discounts on either an individual branch basis or based on an average of all branches within the system, but should strive to ensure that each branch receives the discount to which it is entitled.

Q: How will a school district or a state ordering services on behalf of its eligible schools calculate an average discount?

A: The school district or state will determine the number of students eligible for the school lunch program and will divide that number by the total number of students in the school district or state. This calculation will yield the district- wide or state-wide level of poverty. The school district or the state will then consult the discount matrix to determine the level of discount to which it is entitled.

Q: If a library system orders services on behalf of its branches and has branches located in different school districts, how will that library system calculate an average discount?

A: The library system will determine the discount to which each of the school districts in which its branches are located is entitled. The library system will then add the discount percentages and divide by the number of branches, which will yield the system-wide discount percentage.

Q: How will an eligible school or library determine whether it is located in an urban or a rural area for purposes of applying for universal service discounts?

A: The Commission concluded that, for purposes of the schools and libraries discount program, rural areas should be defined in accordance with the definition adopted by the Department of Health and Human Services' Office of Rural Health Policy (ORHP/HHS). ORHP/HHS uses the Office of Management and Budget's Metropolitan Statistical Area (MSA) designation of metropolitan and non-metropolitan counties, adjusted by the most recent Goldsmith Modification, which identifies rural areas within large metropolitan counties. Both the list of MSAs and the Goldsmith Modification will be posted on the Common Carrier Bureau's homepage (www.fcc.gov/ccb) and on the FCC's education webpage (www.fcc.gov/learnnet).

Q: How will the discount program actually work? Who will receive funds from the universal service administrator?

A: Schools and libraries will only be required to pay the portion of their bill remaining after the discount has been applied. For example, a school that is eligible to receive a 60% discount will be required to pay only 40% of the bill. It will be up to the service providers providing discounted services to apply for reimbursement of the remaining 60% of the bill from the universal service administrator.

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