E-Rate Category 2: Eligible Services
Through the E-rate program, the Federal Communications Commission (FCC) helps U.S. schools and libraries get affordable internet and telecommunications services to support digital learning and resource access. The program, administered by the Universal Service Administrative Company ↗ (USAC), gives 20% to 90% discounts, depending on the applicant’s economic need and location.
E-rate Category 1 services focus on external connectivity, such as internet access, telecommunications, data transmission, and voice over IP (though voice services are being phased out). Recent additions to Category 1 include Wi-Fi hotspots for off-site internet access ↗ and Wi-Fi connectivity on buses ↗. Category 2 services cover internal connectivity, such as routers, switches, wireless access points, cabling, and related managed services and maintenance. This article examines E-rate Category 2 eligible services.
| E-Rate Category 2: Eligible Services | |
| Type of Service | Description |
| Internal Connections |
|
| Managed Internal Broadband Services |
|
| Basic Maintenance of Internal Connections |
|
| Cloud-Based or Virtualized Solutions |
|
Funding Year 2025 Is a 'Use It or Lose It' Year!
The Category 2 budget is a five-year funding cap for each school or library site that expires at the end of funding year 2025 (June 30, 2026). It provides financial support for the Category 2 services covered in the above table. Any unspent funds in the current budget cycle will expire on June 30, 2026, unless the FCC decides to renew, revise, or replace the system.
Funding Allocation Per Site
- Schools and libraries are allocated a budget based on their size.
- Schools: Budget is calculated as $167 per student (urban areas) or $194 per student (rural areas).
- Libraries: Budget is calculated based on square footage.
Five-Year Period
- Budgets are refreshed every five years.
- The current cycle runs from funding year 2021 to 2025.
Minimum Budget
- A minimum budget of $25,000 per site is provided, regardless of size.
Renewal
- The FCC may refresh the budgets for another five years.
- Budgets may remain unchanged or be adjusted based on inflation or needs.
Revisions
- Adjustments to funding formulas (such as higher per-student rates or expanded service eligibility).
Elimination
- The FCC could discontinue the Category 2 budget structure and implement alternative funding methods.
Planning Ahead:
- Applicants should review their budgets and submit funding requests for critical projects before the expiration.
Future Uncertainty:
- Schools and libraries should stay informed about FCC decisions regarding post-2025 funding structures.
Category 2 Budget Issues and Service Providers
As the Category 2 budget for E-rate expires, service providers should take steps to support schools and libraries while positioning themselves for success. As a first step, service providers should review all existing contracts and agreements with E-rate funding recipients to make sure they're in line with the program's rules. They need to let their E-rate customers know how important it is to use their remaining budgets before the deadline. Communication will build trust and ensure schools and libraries prioritize spending on essential projects.
Providing tailored support, like helping customers fill out FCC Forms 470 and 471, can increase customer loyalty and differentiate providers. Providers can make their services indispensable by aligning them with the needs of schools and libraries.
It's also important for providers to stay on top of changes to the E-Rate program after 2025. There's no word yet on whether the current Category 2 budget structure will be renewed, revised, or replaced. It's up to service providers to monitor FCC updates, take part in public comment opportunities, and work with industry groups. This will help providers prepare for future funding structures and make them part of the E-rate ecosystem.
- Act now: Help schools and libraries make the most of their remaining budgets before the June 30, 2026, deadline.
- Stay agile: Prepare for potential changes in the E-rate program and adjust your offerings accordingly.
Engage proactively: Build stronger relationships with customers and establish yourself as a trusted partner for future funding cycles.
WAV, RUCKUS Can Help with E-Rate Category 2 Eligible Services
For service providers, the road from the E-rate award to the final project payment can be rocky. WAV has crafted an easy 90-day financing solution for RUCKUS resellers and integrators.
"Our company understands the ebbs and flows of cash in E-rate environments. By the time you're awarded a 471 [services contract], the school has installation expectations, and ultimately, that funding flowing to you could take quite a bit of time," says Zach Hubeck, executive vice president of marketing at WAV, in a Youtube video ↗.
"We understand that at WAV, and we wanted to offer you a 90-day-term e-rate program for eligible partners. If you need help and you need relief in these environments, contact your sales rep or our accounting folks to talk about how we can do this for you," he adds.
The E-rate teams at WAV and RUCKUS ↗ know compliance and regulatory requirements, and we can work with limited resources. We know how to build and manage complex networks, and we understand how to do it with limited resources.
WAV is a preferred Wi-Fi technology distributor for top brands like RUCKUS. Our team of experts can help you navigate the E-rate Category 2 eligible services process. |
