§ 54.502   Eligible services.

   (a) Supported services. All supported services are listed in the
   Eligible Services List as updated annually in accordance with paragraph
   (b) 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 and 2016. Libraries, schools, or school
   districts with schools that receive funding for category two services
   in funding years 2015 and/or 2016 shall be eligible for support
   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. 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 four funding years.

   (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 2017 and beyond. Absent further action from the
   Commission, each eligible library or school in a school district, which
   did not receive funding for category two services in funding years 2015
   and/or 2016, 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.

   Effective Date Notes: 1. At  79 FR 49198 , Aug. 19, 2014, § 54.502 was
   revised. Paragraphs (b)(2), (b)(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.

   2. At  79 FR 49198 , Aug. 19, 2014, § 54.502 was revised, however
   paragraph (a) effective July 1, 2015.

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