Embrace E-rat e 2.0 Now!
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- Douglas Powell
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1 Embrace E-rat e 2.0 Now! Grounding on changes to the FCC s E-Rat e program E-Rate funding year 18;
2 A great chance to Make it Mat t er Let s connect millions of students to classroom Internet services this year. 63% of K-12 schools have insufficient Internet access Today, the average American school has about the same bandwidth as the average American home even though obviously there are many more people at school than there are at home Onl y around 20 percent of our students have access to true high-speed Internet in their classroom. By comparison, South Korea has 100 percent of its kids with high-speed Internet. 2
3 E-Rat e reforms have increased t he TAM, and complexity There are now 3 paths schools can follow to get E-Rate funding Hardware Bid Similar to years past Customer files Form 470 with their specs Partner responds with bid Customer files Form 471 for winner s products Wait for funding from USAC E-rate funding allocated over 5 years FCC Funding: $1B 2015 E-Rate funding year 18 Managed Service / Mult i- Year Cont ract New for 2015! Simplified application process Partner responds with bid Customer files Form 471 for winner s products Wait for up to 5-years of funding commitment from USAC Must still re-apply each year $1B 2016 E-Rate funding year 19 Preferred Mast er Cont ract New for E-rate 2.0, but none named for FY15 yet Prices negotiated in advance No approved contracts have been announced mentions of GSA Bureau may waive Form 470 bidding requirement Customer files Form 471 for products at contract prices Wait for funding from USAC E-rate funding allocated over 5 years Enhancing our ability to pursue this opportunity requires focused Sales Enablement resources 3
4 Agenda E-rate 2.0 explained HP s E-rat e sales program for partners Sales tools to get you started HP Networking solutions for E-rat e 2.0 Compliance Resources Q&A 4
5 E-rate 2.0 explained Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
6 What is E-Rate? The E-Rate (Education Rate) program is the street name for the Schools and Libraries Program of the Universal Service Fund. The Federal Communications Commission (FCC) makes the rules and is accountable for the program. The Universal Service Administrative Company (USAC) administers the program for the FCC. The Schools and Libraries Division (SLD) is t he E-rat e division of USAC. In July 2014, the FCC adopted an E-rate Modernization Order, reforming the program to focus on assisting schools and libraries to at tain affordable high-speed broadband. 6
7 Synopsis of E-rat e reforms UNCHANGED Discount program with $2.4 billion annual cap Discount rate calculated based on NSLP eligibility District-wide and site-specific funding requests September 16, Funds For Learning, LLC All information subject to change CHANGED Voice services phased out /web gone Single discount rate at all sites in district Category 2 (formerly P2) discounts Top discount lowered from 90% to 85% Discounts capped over 5 years; $1 billion rollover USAC will try to issue all Funding Commitment Decision Letters (FCDL) for workable Funding Request Numbers (FRN) by September 1st of each funding year. Progress will be assessed via reporting to the FCC. 7
8 Draft Eligible Services List (ESL) for 2015 Nothing will be final until October WIRELINE COMPETITION BUREAU SEEKS COMMENT ON DRAFT ELIGIBLE SERVICES LIST FOR SCHOOLS AND LIBRARIES UNIVERSAL SERVICE PROGRAM Released: August 4, 2014 Comment Date: September 3, 2014 Reply Comment Date: September 18,
9 New Terminology Cat egor y 2 the second category of supported services, includes the services and internal connections needed for broadband connectivity within schools and libraries. Ol d New (E-rate 2.0) Definition Priority 1 Category 1 Connectivity to a school/library: Telecommunications and Internet Access Priority 2 Category 2 Connectivity within a school/library: Internal Connections and Basic Maintenance of Internal Connections 9
10 Category 2: Internal connections Eligible Broadband Internal Connections Components: Eligible products: Routers, switches, wireless access points, internal cabling, racks, wireless controllers, firewalls, UPS/battery backup supporting eligible equipment, software supporting eligible equipment (including CALs for LAN/WAN networks), cloud/virtualized functionality of this equipment Newly added to the Eligible Services List for category 2: Caching Managed Wi-Fi 10
11 Eligibility limitations to Category 2 If eligible components are used for both eligible and ineligible purposes (i.e. firewall/ips), the cost of the ineligible portion of use must be cost allocated. We can help with cost allocation! hp.com/go/erate Example: firewall is eligible, IPS is not SKU/Part Number Description E-rate Eligible % Notes JC882A HP S1050F NGFW Appliance 85% IPS subscription cost-allocated JC883A HP S3010F NGFW Appliance 85% IPS subscription cost-allocated JC884A HP S3020F NGFW Appliance 85% IPS subscription cost-allocated JC885A HP S8005F NGFW Appliance 85% IPS subscription cost-allocated JC886A HP S8010F NGFW Appliance 85% IPS subscription cost-allocated JC887AAE HP TP DVLabs DV for S1050F 1-yr E-LTU 0% JC888AAE HP TP DVLabs RepDV for S1050F 1-yr E-LTU 0% JC889AAE HP TP DVLabs DV for S3010F 1-yr E-LTU 0% JC890AAE HP TP DVLabs RepDV for S3010F 1-yr E-LTU 0% JC891AAE HP TP DVLabs DV for S3020F 1-yr E-LTU 0% JC892AAE HP TP DVLabs RepDV for S3020F 1-yr E-LTU 0% JC893AAE HP TP DVLabs DV for S8005F 1-yr E-LTU 0% JC894AAE HP TP DVLabs RepDV for S8005F 1-yr E-LTU 0% JC895AAE HP TP DVLabs DV for S8010F 1-yr E-LTU 0% JC896AAE HP TP DVLabs RepDV for S8010F 1-yr E-LTU 0% 11
12 Eliminated from support Previous Priority 1 and Priority 2 components that are no longer E-Rate eligible Things that run on the network are out The focus now is on delivering broadband to and within schools and libraries Priority 1 services being phased out: Phone service Voic Paging Web hosting Priority 2 products ruled out: Circuit Cards/Components Interfaces Gateways Antennas Servers Software Storage Devices Voice Telephony voice is now considered by the FCC as an application that runs on the network Video Components, as well as voice over IP or video over IP components 12
13 Category 2 funding $1B $1B 2015 E-Rate funding year E-Rate funding year 19 Intent is to have $1 billion available for FY 2017, 2018, and 2019 as well. Funding will come from phase out of voice services and tightening of USAC administrative procedures. In setting the $1 billion annual target for Category 2 support, the Order makes clear that funds targeted for Category 2 services will be shifted if necessary to meet Category 1 demand. Funding is allocated first to highest discount bands. 13
14 Applicant Budgets for Category 2 Calculated and tracked on a per-site basis (i.e. 10 individual caps for 10 schools within a district). Shared expenses (like a data center switch) will be cost allocated among all sites and costs deducted from each school s budget School districts Districts that seek funding in funding years 2015 or 2016 may request E-rate discounts on purchases of up to $150 (pre-discount) per student over a five-year period ( ). Libraries and library systems Libraries that seek Category 2 funding in funding years 2015 or 2016 may request E-rate discounts on purchases of up to $2.30 (pre-discount) per square foot over a five-year period ( ). E-rate support available = ((number of students at the time of the discount level calculation) x ($150) x (discount level)) To ensure the Category 2 budgets are sufficient to meet the minimum demand that certain schools and libraries might have regardless of size, a pre-discount funding floor of $9,200 in Category 2 support is available for each site. 14
15 Applicant Budgets - Exampl es School district example: $150/student District % NSLP E-rate support per student Dist rict cost per student Total per student 80 $120 (80% X $150) $30 (20% X $150) $ $30 (20% X $150) $120 (80% X $150) $150 Library example : 10,000 sq feet X $2.30/sq = eligible for E-rate support up to $23,000 Library discount % E-rate support Library cost Total (sq. f eet X $2.30) 80 $18,400 (80% X $23,000) $4,600 (20% X $23,000) $23, $4,600 (20% X $23,000) $18,400 (80% X $23,000) $23,000 15
16 Price transparency To increase pricing transparency in the E-rate program, information regarding the specific services and equipment purchased by schools and libraries, as well as t heir line item cost s, will be made publicly available on USAC s website for funding year 2015 and beyond. This information is currently collected on FCC Form 471, Block 5, Item 21 ( Item 21s ). Item 21 data will be considered non-confidential unless an applicant can certify that the disclosure of price information violates a statute, regulation or court order. New contracts cannot contain self imposed prohibition on price disclosure unless required by state law or court order. 16
17 Item 21 at tachment Service providers will be expected to assist the applicant with completing Item 21 It em 21 data will support the FCC s on-going analysis of program ef ficiency 17
18 Recordkeeping requirement s Increased from 5 to 10 years The requirement s are heavier The document retention requirement has been expanded from 5 years to 10 years from the last date to receive service or service delivery deadline, whichever is later. I MC can help! Schools, libraries, and consortia shall maintain asset and inventory records of equipment purchased as components of supported Category 2 services sufficient to verify the actual location of such equipment for a period of 10 years after purchase. 18
19 Preferred Master Contracts Encouraging bulk buying The Commission delegates authority to the Bureau to designate preferred master contracts for Category 2 equipment, if they: Offer eligible entities nationwide the opportunity to obtain excellent pricing for Category 2 services Are limited to equipment used in Category 2 internal connections FCC Form 470 Exception May allow such contracts to be exempted from the Form 470 competitive bidding requirement Bid Evaluation Requirement May require applicants to include the preferred master contract (PMC) in their bid evaluations even if the PMC is not submitted as a bid in response to the applicant s Form
20 Mult i-year cont ract s simplified application Applicants that elect to use the multi-year contract funding review process will only be required to submit a complete FCC Form 471 for the first funding year in which they are seeking E- rate support under the multi-year cont ract. In subsequent funding years, applicants will be permitted to use a streamlined application process that will be approved through an expedit ed review process. Contracts for up to 5 years are allowed, but the FCC does not commit to fund all years of multi-year contracts. 20
21 Managed Internal Broadband Service New! Funded under Category 2 A service is eligible for support as managed internal broadband services if Provided by a third party for the operation, management, and/or monitoring of the eligible components of a school or library LAN and WLAN. May include services necessary to manage and repair the LAN/WLAN network, such as diagnostic services, 24-hour network monitoring, or helpdesk support. Applicants can apply for up to $30/ year/student pre-discount for managed or maint enance services $150 per year over 5 years, which counts toward the overall C2 funding cap. Services are slated to sunset at the end of FY 2016 unless FCC extends eligibility Applicants that received funding approval in FY 2015 and/or FY 2016 for these items may continue to obtain funding for FY 2017-FY
22 Cat egory 2 Early Inst allat ion Eligible equipment may be purchased and/or installed on or after April 1 Prior to the beginning of the funding year. This provides maximum amount of time during the summer to complete the necessary work. Disbursements will not be made until on or after July 1. 22
23 HP s E-rate sales program for partners Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
24 HP E-rat e Special Pricing Program Focused on the success of HP partners Feat ures Simple pre-approved pricing model 4 tiers for all HPN SKUs Big deal also extends to products that are not E-rate eligible SSR available, even prior to Form 470 release Uses standard low-touch volume deal registration Project pricing escalation option for deals over $250k With no single-po requirement Dedicated support from E-rate specialists Proactive assignment of Form 470s to willing partners where needed Competitively advantaged products Issue-driven collateral to support your early efforts with customers Goal s: Efficiency, so partners can respond to more Form 470s for schools and libraries Effectiveness, so partners win more Form 471s Supportive of the SLED Ecosyst em: Make SLED an attractive market Make HP easy to do business with Allow partners to earn higher GM% on HP vs. competition 24
25 2014 E-Rate Special Pricing Simpl e. Comprehensive. Aggressive. SSR available. Project Pricing escalation option. Note: Based on the nature of E-Rate opportunities and HP compliance, HP will not be approving NBOs for E-Rate opportunities * discounts do not include Distribution markup/fees 25
26 E-Rat e Special Pricing Program Quick & Easy pathway to pricing Low Touch E-Rat e Deal Regist rat ion E-Rate framework pricing is available to partners as long as: The partner s employees who deal with E-rate have taken HP s E-rate Compliance Training. The partner is bidding against a valid 470 application # Partner submits deal registration for each individual opportunity approved/denied within 4-8 hours Big deal is established for partner and specific customer Deal reg will also include a check box attesting your company and employees understand and comply with the FCC competitive bidding rules. On the opportunity tab of the deal registration provide the following in the Project Name/ ID Field: The word E-Rat e The Form 470 # you are bidding on please also indicate E-Rat e Managed Service, if applicable All SSR requests will require a volume SSR deal registration, per standard SSR process 26
27 Program Flyer Everything you need to know Link to program site Pricing tiers Process st eps Who to call Download a copy at the lower left of the webinar application window 27
28 HP Networking solutions for E-rate 2.0 Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
29 How do I get started? After completing HP s E-rate Compliance Training E-Rate Brochure Basic HPN Value prop Wired & wireless Lifetime Warranty 2.0 Innovations Unified wired/wireless SDN OpenFlow enabled Solution Paths NGFW, IMC Classroom Manager (not E- rate eligible) Common Core, 1:1, BYOD 29
30 Why does a school need E-rat e? What issues sit behind it? 30 Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Confidential For training purposes only.
31 Common Core Online Assessments = Infrastructure Moving the test online puts pressure on many layers of IT. test Desk Classroom School District Consortium 31 Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Confidential For training purposes only.
32 Common Core Solution Development Helping schools close their readiness gaps. Best Practices Guide for Net work Infrastructures Addresses the most pressing gap: Get from generic requirements to a tailored network solution Full range of academic & operational considerations Applicable to 1:1 computing environments Detailed appendix on client virtualization Customer reviews have been extremely positive 32 Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Confidential For training purposes only.
33 Solutions for t he school day Connectivity for ConnectED Better learning outcomes through a bet t er net work What if you could leverage your network to: Maximize limited teaching resources? Give teachers greater control of their classrooms while increasing the quality time they spend with each student? Reduce cost while increasing technology access? Provide the best possible Wi-Fi experience for students, guests and faculty? Deliver location based services? Enable and easily manage BYOD initiatives? 33 Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Confidential For training purposes only.
34 HP Net working solutions for t he school day Connectivity for ConnectED Sales mat erials School Day Networking Solution Brief (external link) School Day Networking Service Descriptions (partner & external) School Day Networking Partner Brief (partner portal) Partner-only and customer-facing Powerpoint slides HP Classroom Manager Overview and Demo Dec 17 SLED Webinar replay 34 Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Confidential For training purposes only.
35 Compliance Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
36 E-Rate Rul es of t he Road The E-rate program is governed by strict rules to ensure fair and open competitive bidding Among other things, applicants cannot have a relationship with service providers that would unfairly influence the outcome of the competition, cannot give service providers inside competitive information, and cannot receive gifts or donations that violate or seek to circumvent FCC rules. In many areas, the line between permissible and non-permissible activities has not been well-defined For instance, according to USAC s interpretative guidance, vendors may have pre-bidding discussions with applicants, discuss their product offerings, teach applicants about new technologies, present product demonstrations, and have neutral marketing discussions. But vendors may not engage in conduct that gives an unfair advantage, get inside information, assist applicants with technology planning, or help determine what services should be included in a Form 470 or RFP. HP E-Rate Compliance Training 2015: Click Here! The risks of non-compliance are high, and include funding denials, freezing of funding requests involving a particular vendor, and funding recovery actions. HP expects its partners to know the rules and determine how to keep their marketing activities within the rules. Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
37 E-Rate Rul es of t he Road Partners: you own your obligation to the rules. You must commit to following all program rules. For example, you must not: Give gifts (FCC allows $20/person, no more than $50/year/person) Assist applicants with the non-discounted portion of the project, directly or indirectly Provide RFP template Interfere with the bidding process Sign forms for the applicant Underwrite the applicant s payment Bribe or offer kick-backs Violate state and/or local bidding laws Design or participate in bid review or evaluation Inflate costs to offset ineligible items Help review or evaluate competing bids Market to schools/libraries after they have filed a Form 470 Violate the Lowest Corresponding Price rule (i.e. charge an E-rate customer more than other customers for the same services or products) Events: prescreen through PSGIFTRULECOMPLIANCE@hp.com HP does not participate as a direct E-rate service provider. Our only go-to-market is indirect. 37 Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Confidential For training purposes only.
38 Competitive Bidding Rules You own your obligation to the rules. You must commit to following all program rules. Make sure you have evaluated them and act appropriately. Higher risk Lower risk As individual pre-bidding contact with customers increases, so does the risk that you may violate, or be perceived to have violated, the competitive bidding rules. Once a Form 470 is posted, no marketing contact is allowed. The only contact allowed is for technical questions. Deal reg will also include a check box attesting your company and employees understand and comply with the FCC competitive bidding rules. No pre-bidding contact Increased prebidding contact 38 Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Confidential For training purposes only.
39 Resources Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
40 go/ erate fundsforlearning.com E-rat e eligibility (after ESL is final) Substitution letters Cost allocation information Resources 40 Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Confidential For training purposes only.
41 EG SLED Inside Channel Sales Team FY14 West Region AK PS Sales Manager: Troy Howard (o) (M) CA SLED, K-12 and E-Rate Jon Baker (o) (m) WA OR ID MT WY West SLED, K-12 and E-Rate Jon Baker (o) (m) CA Sal es Enabl ement Chris Wright (o) (m) HI CA NV UT AZ CO NM West Sal es Enabl ement Tyler Anderson (o) (m) 41
42 EG SLED Inside Channel Sales Team FY14 Central Region PS Sales Manager: Troy Howard (o) (M) hp.com Great Lakes - SLED Dewayne Hugh (o) (m) dewayne.hugh@ hp.com ND SD NE KS MN WI IA MO IL IN MI KY OH WV Cent r al - K-12/ E-Rate Jen Simpson (o) (m) Jen.simpson@ hp.com Cent r al - SLED Devin Christensen devin.christensen@hp.co m TX OK AR LA MS Cent r al Sal es Enablement Tyler Anderson (o) (m) tyler.anderson@ hp.com 42
43 EG SLED Inside Channel Sales Team FY14 East Region Northeast - SLED Thayne Manning (o) (m) tj.manning@ hp.com PA MD DE DC ME VT NH NY MA RI CT NJ East - K-12/ E-Rate Nhavy Ky (o) (m) Nhavy.ky@ hy.com PS Sales Manager: Troy Howard (o) (M) troy.howard@ hp.com VA Southeast - SLED Katherine Anderson (o) (m) katherine.anderson@ hp.com TN AL GA NC SC FL East Sales Enablement Chris Wright (o) (m) phillip.wright@ hp.com 43
44 Questions? 44
45 What s Next? 2015 HP E-Rate Program Rollout Schedule Stage 1 Grounding Aug 26 Introduction Oct 1 Deep Dive Oct 31 Compliance Training Stage 2 Program Det ails Program Webcast (today) E-Rate 2.0 details HP Pricing & Deal reg Customer/partner brochure CC/1:1/School day assets Channel Inside team fully trained and ready to help Stage 3 Product Focus Specific messaging: Wireless Unified Wired/Wireless Cloud Managed Networking SDN School Day If you haven t already let us know you ll be participating with us, notify your E-Rate specialist to get on our roster for training/updates/support. We will be offering E-rate compliance training next month, required to be eligible for special E-rate pricing and to bid HP. Go to or for self-training right away. Our program, product eligibility, resources will be updated on 45
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