§ 54.505   Discounts.

   Link to an amendment published at  80 FR 5989 , February 4, 2015.

   (a) Discount mechanism. Discounts for eligible schools and libraries shall
   be set as a percentage discount from the pre-discount price.

   (b) Discount percentages. The discounts available to eligible schools and
   libraries shall range from 20 percent to 90 percent of the pre-discount
   price for all eligible services provided by eligible providers, as defined
   in this subpart. The discounts available to a particular school, library, or
   consortium  of only such entities shall be determined by indicators of
   poverty and high cost.

   (1) For schools and school districts, the level of poverty shall be based on
   the percentage of the student enrollment that is eligible for a free or
   reduced  price  lunch  under  the  national  school lunch program or a
   federally-approved alternative mechanism. School districts shall divide the
   total number of students eligible for the National School Lunch Program
   within the school district by the total number of students within the school
   district to arrive at a percentage of students eligible. This percentage
   rate shall then be applied to the discount matrix to set a discount rate for
   the supported services purchased by all schools within the school district.
   Independent charter schools, private schools, and other eligible educational
   facilities should calculate a single discount percentage rate based on the
   total number of students under the control of the central administrative
   agency.

   (2) For libraries and library consortia, the level of poverty shall be based
   on the percentage of the student enrollment that is eligible for a free or
   reduced  price  lunch  under  the  national  school lunch program or a
   federally-approved alternative mechanism in the public school district in
   which  they are located and should use that school district's level of
   poverty to determine their discount rate when applying as a library system
   or as an individual library outlet within that system. When a library system
   has  branches or outlets in more than one public school district, that
   library system and all library outlets within that system should use the
   address of the central outlet or main administrative office to determine
   which school district the library system is in, and should use that school
   district's level of poverty to determine its discount rate when applying as
   a library system or as one or more library outlets. If the library is not in
   a school district, then its level of poverty shall be based on an average of
   the percentage of students eligible for the national school lunch program in
   each of the school districts that children living in the library's location
   attend.

   (3) The Administrator shall classify schools and libraries as “urban” or
   “rural” according to the following designations.

   (i) The Administrator shall designate a school or library as “urban” if the
   school or library is located in an urbanized area or urban cluster area with
   a population equal to or greater than 25,000, as determined by the most
   recent  rural-urban  classification  by  the Bureau of the Census. The
   Administrator shall designate all other schools and libraries as “rural.”

   (4)  School districts, library systems, or other billed entities shall
   calculate discounts on supported services described in § 54.502(a) that are
   shared by two or more of their schools, libraries, or consortia members by
   calculating  an average discount based on the applicable district-wide
   discounts of all member schools and libraries. School districts, library
   systems, or other billed entities shall ensure that, for each year in which
   an eligible school or library is included for purposes of calculating the
   aggregate discount rate, that eligible school or library shall receive a
   proportionate share of the shared services for which support is sought. For
   schools,  the  discount  shall  be  a simple average of the applicable
   district-wide percentage for all schools sharing a portion of the shared
   services. For libraries, the average discount shall be a simple average of
   the applicable discounts to which the libraries sharing a portion of the
   shared services are entitled.

   (c) Matrices. Except as provided in paragraph (d) of this section, the
   Administrator shall use the following matrices to set discount rates to be
   applied to eligible category one and category two services purchased by
   eligible schools, school districts, libraries, or consortia based on the
   institution's level of poverty and location in an “urban” or “rural” area.
      % of students eligible for National School Lunch Program Category one
   schools and
   libraries discount matrix Category two schools and
   libraries discount matrix
   Discount level Discount level
   Urban
   discount Rural
   discount Urban
   discount Rural
   discount
   < 1 20 25 20 25
   1-19 40 50 40 50
   20-34 50 60 50 60
   35-49 60 70 60 70
   50-74 80 80 80 80
   75-100 90 90 85 85

   (d) Voice Services. Discounts for category one voice services shall be
   reduced by 20 percentage points off applicant discount percentage rates for
   each  funding  year  starting  in funding year 2015, and reduced by an
   additional 20 percentage points off applicant discount percentage rates each
   subsequent funding year.

   (e) Interstate and intrastate services. Federal universal service support
   for  schools  and  libraries shall be provided for both interstate and
   intrastate services.

   (1)  Federal universal service support under this subpart for eligible
   schools and libraries in a state is contingent upon the establishment of
   intrastate discounts no less than the discounts applicable for interstate
   services.

   (2)  A  state  may,  however, secure a temporary waiver of this latter
   requirement based on unusually compelling conditions.

   (f) State support. Federal universal service discounts shall be based on the
   price of a service prior to the application of any state provided support
   for schools or libraries.

   [ 62 FR 32948 , June 17, 1997, as amended at  62 FR 41304 , Aug. 1, 1997;  63 FR 2130 , Jan. 13, 1998;  63 FR 70572 , Dec. 21, 1998;  75 FR 75414 , Dec. 3, 2010;
    79 FR 49201 , Aug. 19, 2014;  79 FR 68634 , Nov. 18, 2014;  80 FR 5989 , Feb. 4,
   2015]

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