Summary of Changes Since Year 3

The E-rate program underwent some major changes in Year 3, but that will not be the case in Year 4. Applicants will apply in the fall of 2000 for discounts for the funding year that will run from July 1, 2001, to June 30, 2002. The Form 470 application form that was used in Year 3 will be used again in Year 4. However, there are some minor changes in the Form 471 application and you must use the new version of the form. There will also be some minor changes involved in processing funding requests for Year 3. Here are more details about them.

Choosing Your Payment Method

The Federal Communications Commission has decided to leave it up to applicants and service providers to work out whether they will use discounted invoices or the Billed Entity Applicant Reimbursement (BEAR) process to receive their discounts during the third funding year, which runs from July 1, 2000, to June 30, 2001. More details on these payment methods are available in Section 8 of this workbook, "Getting Your Discounts."

However, once you have submitted a form for a particular funding item, you must continue to use that payment method all year long. In other words, if your service provider submits an invoice to the Schools and Libraries division, you will commit yourself to that payment method. Similarly, if you submit a BEAR form for a particular item, you must continue to use that method throughout the rest of the year.

The Form 486 and Form 500

In the summer of 2000, the FCC approved a new version of the Form 486, the form that e-rate applicants have to submit to certify that their service providers should be paid. Consequently, the SLD is no longer accepting the old version of this form, which was dated October 1998. The new form is simplified, and is to be used to signal that a service has been delivered and the Universal Service Administrative Company is authorized to begin processing payments to a vendor. Applicants also will use this form to specify the entity that has approved their technology plans.

The FCC created a new form, the Form 500, to take over some of the functions that the Form 486 used to perform. The Form 500 should be used if an applicant needs to extend a contract to take advantage of an extension in the installation deadline. For instance, if an applicant did not install internal connections until right before the Sept. 30, 2000, deadline for Year 2, and its contract originally expired on June 30, 2000, it would have to use the Form 500 to notify the SLD that the contract had been extended so that the work could be performed.

The Form 500 is also used to cancel funding requests that an applicant discovers it will not be able to use, or to reduce the amount of funding that has been set aside for an applicant. The SLD hopes that applicants will make use of these features to free up funding that could be committed to other applicants.

Funding for Late-Filed Year 2 Applications

Because applicant demand for Year 2 discounts did not exceed the available funds, the SLD will be able to make funds available for Year 2 applications that were received after April 6, 1999. The SLD has said that eligible applications that were filed between April 6, 1999, and March 1, 2000, will be funded, and then it will fund applications filed between March 1 and March 31, 2000, according to special rules of priority. The SLD will not begin issuing these funding commitments until it has finished processing funding commitments for Year 3.