§ 54.502   Eligible services.

   (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 and beyond. Absent further action from the Commission,
   each eligible library or school in a school district that either did not
   receive funding for category two services in funding years 2015 through 2019
   or has completed its five-year funding cycle, shall be eligible for support
   for category two services, except basic maintenance services, no more than
   twice every five funding years. For the purpose of determining eligibility,
   the five-year period begins in any funding year in which the school or
   library  receives  discounted  category  two services other than basic
   maintenance services. If a school or library receives category two services
   other than basic maintenance services that are shared with other schools or
   libraries (for example, as part of a consortium), the shared services will
   be attributed to the school or library in determining whether it is eligible
   for support. 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.

   (d) 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]

   Effective Date Note: At  79 FR 49198 ,Aug. 19, 2015, § 54.502 was revised.
   However, paragraphs (b)(2), (3), and (5) contain information collection and
   recordkeeping requirements and will not become effective until approval has
   been given by the Office of Management and Budget.

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