§  54.502   Eligible services.

   Link to an amendment published at  84 FR 70036 , Dec. 20, 2019.

   (a) Supported services. All supported services are listed in the
   Eligible Services List as updated annually in accordance with paragraph
   (d) of this section. The services in this subpart will be supported in
   addition to all reasonable charges that are incurred by taking such
   services, such as state and federal taxes. Charges for termination
   liability, penalty surcharges, and other charges not included in the
   cost of taking such service shall not be covered by the universal
   service support mechanisms. The supported services fall within the
   following general categories:

   (1) Category one. Telecommunications services, telecommunications, and
   Internet access, as defined in § 54.5 and described in the Eligible
   Services List are category one supported services.

   (2) Category two. Internal connections, basic maintenance and managed
   internal broadband services as defined in § 54.500 and described in the
   Eligible Services List are category two supported services.

   (b) Funding years 2015-2019. Libraries, schools, or school districts
   with schools that receive funding for category two services in any of
   the funding years between 2015 and 2019 shall be eligible for support
   for category two services pursuant to paragraphs (b)(1) through (6) of
   this section.

   (1) Five-year budget. Each eligible school or library shall be eligible
   for a budgeted amount of support for category two services over a
   five-year funding cycle beginning the first funding year support is
   received. Excluding support for internal connections received prior to
   funding year 2015, each school or library shall be eligible for the
   total available budget less any support received for category two
   services in the prior funding years of that school's or library's
   five-year funding cycle. The budgeted amounts and the funding floor
   shall be adjusted for inflation annually in accordance with
   § 54.507(a)(2).

   (2) School budget. Each eligible school shall be eligible for support
   for category two services up to a pre-discount price of $150 per
   student over a five-year funding cycle. Applicants shall provide the
   student count per school, calculated at the time that the discount is
   calculated each funding year. New schools may estimate the number of
   students, but shall repay any support provided in excess of the maximum
   budget based on student enrollment the following funding year.

   (3) Library budget. Each eligible library shall be eligible for support
   for category two services, up to a pre-discount price of $2.30 per
   square foot over a five-year funding cycle. Libraries shall provide the
   total area for all floors, in square feet, of each library outlet
   separately, including all areas enclosed by the outer walls of the
   library outlet and occupied by the library, including those areas
   off-limits to the public.

   (4) Funding floor. Each eligible school and library will be eligible
   for support for category two services up to at least a pre-discount
   price of $9,200 over five funding years.

   (5) Requests. Applicants shall request support for category two
   services for each school or library based on the number of students per
   school building or square footage per library building. Category two
   funding for a school or library may not be used for another school or
   library. If an applicant requests less than the maximum budget
   available for a school or library, the applicant may request the
   remaining balance in a school's or library's category two budget in
   subsequent funding years of a five year cycle. The costs for category
   two services shared by multiple eligible entities shall be divided
   reasonably between each of the entities for which support is sought in
   that funding year.

   (6) Non-instructional buildings. Support is not available for category
   two services provided to or within non-instructional school buildings
   or separate library administrative buildings unless those category two
   services are essential for the effective transport of information to or
   within one or more instructional buildings of a school or
   non-administrative library buildings, or the Commission has found that
   the use of those services meets the definition of educational purpose,
   as defined in § 54.500. When applying for category two support for
   eligible services to a non-instructional school building or library
   administrative building, the applicant shall allocate the cost of
   providing services to one or more of the eligible school or library
   buildings that benefit from those services being provided.

   (c) Funding year 2020. Libraries, schools, or school districts with
   schools that receive funding for category two services in funding year
   2020 shall be eligible for support for category two services pursuant
   to paragraphs (c)(1) through (6) of this section.

   (1) Six-year funding cycle. Each eligible school or library shall be
   eligible for a budgeted amount of support for category two services
   over a six-year funding cycle. Each school or library shall be eligible
   for the total available budget less the pre-discount amount of any
   support received for category two services in the prior funding years
   of that school's or library's six-year funding cycle.

   (2) School budget. Each eligible school shall be eligible for support
   for category two services up to a pre-discount price of $150 plus an
   additional prorated 20% (adjusted for inflation dating back to funding
   year 2015) over six funding years that will be completed at the end of
   funding year 2020. Applicants shall provide the student count per
   school, calculated at the time that the discount is calculated each
   funding year. New schools may estimate the number of students but shall
   repay any support provided in excess of the maximum budget based on
   student enrollment the following funding year.

   (3) Library budget. Each eligible library located within the Institute
   of Museum and Library Services locale codes of "11--City, Large,"
   defined as a territory inside an urbanized area and inside a principal
   city with a population of 250,000 or more, "12--City, Midsize," defined
   as a territory inside an urbanized area and inside a principal city
   with a population less than 250,000 and greater than or equal to
   100,000, or "21--Suburb, Large," defined as a territory outside a
   principal city and inside an urbanized area with population of 250,000
   or more, shall be eligible for support for category two services, up to
   a pre-discount price of $5.00 per square foot plus an additional
   prorated 20% (adjusted for inflation dating back to funding year 2015)
   over six funding years that will be completed at the end of funding
   year 2020. All other eligible libraries shall be eligible for support
   for category two services, up to a pre-discount price of $2.30 per
   square foot plus an additional prorated 20% (adjusted for inflation
   dating back to funding year 2015) over a six-year funding cycle that
   will be completed at the end of funding year 2020. Libraries shall
   provide the total area for all floors, in square feet, of each library
   outlet separately, including all areas enclosed by the outer walls of
   the library outlet and occupied by the library, including those areas
   off-limits to the public.

   (4) Funding floor. Each eligible school and library will be eligible
   for support for category two services of at least a pre-discount price
   of $9,200 plus an additional prorated 20% (adjusted for inflation
   dating back to funding year 2015) over six funding years that will be
   completed at the end of funding year 2020.

   (5) Requests. Applicants shall request support for category two
   services for each school or library based on the number of students per
   school building or square footage per library building. Category two
   funding for a school or library may not be used for another school or
   library. The costs for category two services shared by multiple
   eligible entities shall be divided reasonably between each of the
   entities for which support is sought in that funding year.

   (6) Non-instructional buildings. Support is not available for category
   two services provided to or within non-instructional school buildings
   or separate library administrative buildings unless those category two
   services are essential for the effective transport of information to or
   within one or more instructional buildings of a school or
   non-administrative library buildings, or the Commission has found that
   the use of those services meets the definition of educational purpose,
   as defined in § 54.500. When applying for category two support for
   eligible services to a non-instructional school building or library
   administrative building, the applicant shall allocate the cost of
   providing services to one or more of the eligible school or library
   buildings that benefit from those services being provided.

   (d) Funding year 2021 and beyond. Schools, school districts, libraries,
   and library systems shall be eligible for support for category two
   services pursuant to the five-year budgets described in paragraphs
   (d)(1) through (6) of this section.

   (1) Fixed five-year funding cycle. Beginning in funding year 2021, each
   eligible school, school district, library, or library system shall be
   eligible for a budgeted amount of pre-discount support for category two
   services over a five-year funding cycle that will reset in funding year
   2026 and subsequently, after every five funding years. Each school,
   school district, library, or library system shall be eligible for the
   total available budget less the pre-discount amount of any support
   received for category two services in the prior funding years of that
   fixed five-year funding cycle.

   (2) School and school district multipliers. Each eligible school
   district and schools operating independently of a school district shall
   be eligible for support for category two services up to a pre-discount
   price of $167 per student over a five-year funding cycle. The amount of
   support will be calculated at the time that the discount is calculated
   in the first funding year of the five-year cycle in which the applicant
   requests category two support, unless the school or school district
   elects to seek additional program support using updated enrollment
   numbers in subsequent funding years in the five-year cycle. School
   districts shall provide the total number of students within the school
   district. Independent charter schools, private schools, and other
   eligible educational facilities that operate under the control of a
   central administrative agency shall provide the total number of
   students under the control of that agency. Schools that are not
   affiliated financially or operationally with a school district or
   central administrative agency shall provide the total number of
   students in the school.

   (3) Library and library system multipliers. Library systems and
   libraries operating independently of a system shall be eligible for
   support for category two services, up to a pre-discount price of $4.50
   per square foot over a five-year funding cycle. The amount of support
   will be calculated at the time that the discount is calculated in the
   first funding year of the five-year cycle in which the applicant
   requests category two support, unless the library or library system
   elects to seek additional program support using updated square footage
   in subsequent funding years in the five-year cycle. Library systems
   shall provide the total area for all floors, in square feet, of all of
   its library outlets, including all areas enclosed by the outer walls of
   the library outlet and occupied by the library, including those areas
   off-limits to the public. Independent libraries shall provide the total
   area for all floors, in square feet, of all areas enclosed by the outer
   walls of the library outlet and occupied by the library, including
   those areas off-limits to the public.

   (4) Funding floor. Each eligible school and library shall be eligible
   for support for category two services of at least a pre-discount price
   of $25,000 over five funding years.

   (5) Calculation increase. Before funding year 2026 and every subsequent
   five-year funding cycle, the Wireline Competition Bureau shall announce
   the multipliers and funding floor as adjusted for inflation at least 60
   days before the start of the filing window for the next five-year
   funding cycle. The Bureau shall use the last four quarters of data on
   the Gross Domestic Product Chain-type Price Index (GDP-CPI) compared
   with the equivalent quarters from the beginning of the five-year
   funding cycle. The increase shall be rounded to the nearest 0.1 percent
   and shall be used to calculate the category two budget multipliers and
   funding floor for that five-year funding cycle. The multipliers and
   funding floor shall be rounded to the nearest cent.

   (6) Non-instructional buildings. Support is not available for category
   two services provided to or within non-instructional school buildings
   or separate library administrative buildings unless those category two
   services are essential for the effective transport of information to or
   within one or more instructional buildings of a school or
   non-administrative library buildings, or the Commission has found that
   the use of those services meets the definition of educational purpose,
   as defined in § 54.500. When applying for category two support for
   eligible services to a non-instructional school building or library
   administrative building, the applicant shall deduct the cost of the
   non-instructional building's use of the category two services or
   equipment.

   (e) Eligible services list process. The Administrator shall submit by
   March 30 of each year a draft list of services eligible for support,
   based on the Commission's rules for the following funding year. The
   Wireline Competition Bureau will issue a Public Notice seeking comment
   on the Administrator's proposed eligible services list. The final list
   of services eligible for support will be released at least 60 days
   prior to the opening of the application filing window for the following
   funding year.

   [ 62 FR 32948 , June 17, 1997, as amended at  79 FR 49198 , Aug. 19, 2014;
    79 FR 68634 , Nov. 18, ;80 2014 FR 5988 , Feb. 4, 2015;  84 FR 70036 , Dec.
   20, 2019]

   Effective Date Note: At  84 FR 70036 , Dec. 20, 2019, § 54.502 was amended
   by redesignating (d) as (e) and adding a new paragraph (d). These
   paragraphs contain information collection and recordkeeping
   requirements and will not become effective until approval has been
   given by the Office of Management and Budget.