FCC C2 Guidance: NIFs Ineligible, FY2020 Data Allowed for FY 2021 Student Counts

The Wireline Competition Bureau issued a public notice on October 14, 2020 (C2 Public Notice), providing additional guidance related to the category two (C2) services budget approach established by the Commission in the Category Two Report and Order.

In the Category Two Report and Order, the Commission adopted a rule that, starting in funding year (FY) 2021, C2 budgets will be calculated at the school district-level based on the total number of full-time students in a school district, rather than on a school-by-school basis.  School districts may use the funding as needed at schools within their districts. 

In the C2 Public Notice:

• The Bureau reaffirmed the Commission’s decision that non-instructional facilities are not eligible for E-rate funding.  
• Applicants must remove the costs of any use of shared network equipment by a non-instructional facility.
• Given the pandemic, applicants may use their full-time enrollment numbers from their FY 2020 FCC Form 471 applications for FY 2021.
• Applicants must validate their student enrollment numbers once during the five-year funding cycle to set their C2 budgets and may update the enrollment numbers in future funding years during the five-year cycle if they choose to do so.
• The Bureau clarified the Commission’s decision in the Category Two Report and Order that, beginning in FY 2021, school districts may only count each full-time student in the district one time when calculating their district-wide budget, based on their state’s definition of full-time student.  No part-time students may be counted for purposes of a district’s budget. 
• Independent schools that are attended by students from multiple districts on a part-time basis only (such as vocational schools that are not part of a district) should continue to count their students as full-time students consistent with previous guidance provided under the prior C2 budget rules.
• Students enrolled at brick and mortar schools should be counted as full-time students even if they receive some or all instruction via remote learning during the impact of the COVID-19 pandemic. Previously, virtual students could not be counted for C2 budget purposes. 
• Beginning in FY 2021, charter schools may demonstrate that they are individually responsible for their finances and administration even when they are legally part of a school district under state law.  This approach will allow charter schools in this position to file as an independent charter school with their own category two budget and discount rate.
• Evidence of a charter school’s financial and administrative independence may include, but is not limited to, a charter school’s chartering contract, bills and contracts with vendors in the name of the charter school, or a letter from either the State Education Agency or the school’s charter authorizer.