I. Eligibility for Universal Service Discounts

Q: Which schools are eligible to receive discounts?

A: The Commission concluded that, to be eligible for universal service discounts, a school must meet the statutory definition of an elementary or secondary school found in the Elementary and Secondary Education Act of 1965, must not operate as a for-profit business, and must not have an endowment exceeding $50 million. Both public and non-public elementary and secondary schools that meet these criteria will be eligible to receive discounts on eligible services.
Q: Which libraries are eligible to receive discounts?

A: The Commission concluded that, to be eligible for universal service discounts, a library must operate as a not-for-profit business and must be eligible for assistance from a state library administrative agency under the Library Services and Technology Act (LSTA). In addition, while the definition of library in the LSTA includes public libraries, public elementary or secondary school libraries, academic libraries, research libraries that are not affiliated with an institution of higher education, and private libraries subject to state determination, the Commission concluded that a library's eligibility for universal service discounts funding will depend on its funding as an independent entity. "Independent" means that the budget of the library must be completely separate from that of any institution of learning. For example, because institutions of higher education are not eligible for universal service discounts, an academic library will only be eligible if its funding is completely separate from the funding of any institution of higher education. On the other hand, a library within an eligible school will be entitled to receive discounted services as part of the school.

Q: Will eligible schools and libraries applying for discount funding be allowed to aggregate their demand for telecommunications service with others?
A: Yes. The Commission encourages eligible schools and libraries to aggregate their demand with others to create a consortium with sufficient demand to attract competitors and negotiate lower rates. It is important to note that entities not eligible for universal service discounts will benefit from lower pre-discount prices from such aggregation, but they will not be permitted to gain eligibility for discounts by participating in consortia with those who are eligible. Clearly, this will place responsibility on consortia to keep careful records of their expenses so that only the eligible entities receive the discounts.
Q: With whom will eligible schools and libraries be permitted to aggregate demand?
A: Eligible schools and libraries may aggregate demand with other eligible schools and libraries, rural health care providers, public sector (governmental) entities, and/or private sector entities. Schools and libraries that join consortia composed only of other schools and libraries, rural health care providers, and public sector (governmental) entities may, under the Communications Act, receive below tariff rates on any eligible tariffed services they order. Eligible schools and libraries participating in consortia that include private sector entities may receive a universal service discount only if any interstate services that such consortia receive from incumbent local exchange carriers are provided at generally tariffed rates.
Return to USF topics