In today’s highly competitive business environment, it’s important to leave no opportunity unexamined. One area that has emerged for channel pros: E-rate, the federal government program that helps school districts purchase digital tools and technology. “The E-rate program is the primary source of funding for internet connections in K–12 schools and public library systems,” points out John Harrington, CEO for Funds for Learning LLC, an Edmond, Okla.-based professional firm specializing in the federal E-rate funding program and helping companies navigate it.
E-rate is managed by the Federal Communications Commission (FCC). The program is funded based on demand; it is currently capped at $3.9 billion. Individual schools, school districts, and libraries apply for funds individually or as part of a consortium. According to the FCC, funding revolves around two categories of service. The first focuses on services for a school or library (telecommunications, telecommunications services, and internet access). The second category involves services that deliver internet access within schools and libraries (internal connections, basic maintenance of internal connections, and managed internal broadband services).
It’s no small matter. According to the 2016 E-Rate Trends Report from Funds for Learning, more than 10,000 E-rate applicants from across the country competitively bid out networking projects that totaled $1.63 billion in 2016. These include switches and routers ($743 million), Wi-Fi equipment ($412 million), data cabling ($185 million), installation ($140 million), and managed Wi-Fi and maintenance ($165 million). “These projects are driven by robust demand for Wi-Fi networks on K–12 school and library campuses. The annual expenditures for these types of goods and services is expected to continue at this level for the foreseeable future,” Harrington explains.
Today, a growing number of schools are embarking on programs to take their internet infrastructure into the digital age, and demand for technology isn’t likely to subside anytime soon. In many cases, they are attempting to catch up to private industry, which has already invested heavily in internet and networking upgrades. However, most school districts—particularly smaller entities—lack the IT expertise to build out robust IT and networking frameworks. “It is important that schools and libraries have qualified technology partners. The vendors that work with them can play a vital role in the technology transformation,” Harrington says.
For channel pros, the opportunities to participate in this space are significant and potentially profitable. For one thing, nearly all schools now participate in the E-rate program. For another, many are looking for tech partners that can serve as a one-stop shop and address technology needs. Finally, channel pros and VARs can realize ancillary benefits from these projects. “K–12 school systems and public libraries play a prominent role in the community,” says Harrington. “Serving schools and libraries is a way to support the entire community while establishing a broad presence in the area.”
Tapping this burgeoning market requires more than a willingness to sell products and devise quick solutions for schools. There’s a need to understand state and local competitive bidding rules, E-rate regulatory requirements, annual filing requirements, and how to submit paperwork through the federally regulated system. It’s also important to recognize that projects don’t take place particularly fast. In many cases, it can take several months for a school district to obtain funding and proceed with a project. Although E-rate paperwork isn’t particularly complicated, it typically takes some training and attention to detail to ensure that it is prepared and submitted correctly.
In addition, companies participating in the space should understand E-rate rules ahead of time, prepare their paperwork carefully, and keep a close eye on deadlines. Finally, it’s critical to dedicate resources to understanding the rules and managing these processes. Concludes Harrington: “E-rate-funded projects are helping [to] transform schools and libraries into connected learning environments. The E-rate market is sizable and those companies that participate often see a return on their investment that is both tangible and intangible.”