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Category One and Category Two Services
Category One
Category Focus

Category One focuses on services necessary to provide broadband connectivity to school and library buildings. Previously eligible services have been eliminated completely or are being phased out of the program.

Category One Services

Digital Transmission Services and Internet Access:


  • Broadband over Power Lines
  • T-1, T-3, Fractional T-1
  • Ethernet
  • Leased Lit Fiber
  • Leased Dark Fiber
  • Self-Provisioned Broadband Networks
  • Satellite Services
  • Wireless Services (e.g. microwave)

Note that eligible costs for leased lit fiber, dark fiber, and self-provisioned networks include monthly charges, special construction, installation and activation charges, modulating electronics, and maintenance and operation charges. Network Equipment and maintenance and operation costs for existing networks are eligible. All equipment and services, including maintenance and operation, must be competitively bid.

E-Rate support is not eligible for:

  • components of telephone service (such as directory assistance charges, custom calling services, direct inward dialing, and 900/976 call blocking)
  • inside wire maintenance plans
  • outdated services such as paging
  • text messaging or email
  • services that may use broadband but do not provide it, including e-mail, voice mail, and web hosting
  • applications and content
  • equipment such as computers, laptops, tablets, and all other end-user devices

Off-campus use, even if used for an educational purpose, is ineligible for support and must be cost allocated out of any funding request.

Phasing out of Voice Services

Support for voice services is being phased out of the E-Rate program by subtracting 20 percentage points from an applicant's normal discount rate each funding year beginning with Funding Year 2015 (regardless of whether or not the applicant applied for or received funding for voice services during those years), until the applicant reaches 0% funding support for voice services.

The phase down applies to all costs incurred for the provision of telephone services and circuit capacity dedicated to providing voice services.

Voice services being phased out include the following:

  • Local and long distance phone service (often referred to as "POTS")
  • 800 service
  • Radio loop
  • Satellite telephone
  • Shared telephone service
  • Centrex
  • ISDN (when dedicated to voice services)
  • Wireless telephone service (including cellular voice services)
  • Interconnected VOIP
  • Circuit capacity dedicated to providing voice services

FY2017: The discounts applicants receive for voice services will be 60 percentage points lower than their discount rates for other eligible services.

FY2018: Only entities normally at the 90% discount level will still be approved for voice services, which will be be reduced to a discount rate of 10%. All other entities will have already been phased out of any eligibility to receive discounts for voice services.

Category Two
Category Focus

Category Two eligible services are focused on connectivity to devices within buildings, and support is limited to the internal connections necessary to bring broadband into, and provide it throughout, schools and libraries.

Category Two funding is subject to a five year pre-discount budget through Funding Year 2019.

LEARN MORE Learn more about Category Two budgets

Category Two Services
Broadband Internal Connections

Support is available for broadband connections used for educational purposes within, between, or among instructional buildings that comprise a school campus or library branch. Services cannot extend across a public right-of-way beyond the school or library facility. Eligible Internal Connections must be located at the applicant site and must be necessary to transport information to classrooms or publicly accessible rooms of a library.

Internal connections support is limited to those broadband distribution services and equipment needed to deliver broadband to students and library patrons.

  • access points used in a LAN or WLAN
  • cabling, connectors, and related components used for internal broadband connections
  • caching (including caching service, caching equipment or components, caching servers)
  • firewalls
  • network switches
  • routers
  • racks that house eligible equipment
  • uninterruptable power supply that supports eligible equipment
  • wireless LAN controllers
  • improvements, upgrades, and software necessary to distribute high-speed broadband throughout school buildings and libraries
  • cloud-based functionality of eligible equipment, such as cloud wireless controllers, are eligible.
  • licenses for eligible equipment
  • software that supports eligible equipment
  • taxes, surcharges and other similar reasonable charges
  • shipping charges
  • training on how to use eligible equipment
  • installation and configuration (no longer has to be provided by the equipment vendor)

To focus support on only those internal connections necessary to enable high-speed broadband connectivity, E-Rate support for the following is ineligible:

  • circuit cards/components
  • interfaces
  • gateways
  • servers
    (exception: servers necessary for caching)
  • software
    (exception: the software that supports eligible broadband internal connections)
  • storage devices
  • telephone components
  • video components
  • voice over IP or video over IP components
  • data protection components, such as virtual private networks
    (exceptions: firewalls and uninterruptible power supply/battery backup)

Basic Maintenance of Eligible Broadband Internal Connections

Support is available for basic maintenance and technical support appropriate to maintain reliable operation when provided for eligible broadband internal connections. Support for basic maintenance will be paid for actual work performed and parts repaired or replaced. Basic maintenance is eligible for support only if it is a component of a maintenance agreement or contract for eligible broadband internal connections - the components themselves must be eligible for discounts for their associated basic maintenance services to be eligible.

  • Repair and upkeep of eligible hardware
  • Wire and cable maintenance
  • Basic technical support
  • Configuration changes

Note that many of the services below that are ineligible under BMIC are eligible as Managed Broadband Services.

  • Services that maintain ineligible equipment
  • Upfront estimates that cover the full cost of every piece of eligible equipment
  • Services that enhance the utility of equipment
  • Network management services, including 24-hour network monitoring
  • On-site technical support
  • Unbundled warranties
Managed Internal Broadband Services

Services provided by a third party for the operation, management, and monitoring of eligble broadband internal connections are eligible managed internal broadband services, for example managed Wi-Fi.

  • Management and operation of the LAN/WLAN, including installation, activation, and initial configuration of eligible components, and on-site training on the use of eligible equipment
  • E-Rate support is limited to those expenses or portions of expenses that directly support and are necessary for the broadband connectivity within schools and libraries
  • Managed voice service