Schools and Libraries Universal Service Support Mechanism, a National Broadband Plan for Our Future

In this Order, the Wireline Competition Bureau revises its guidance for the E-rate program with respect to the requirement that applicants deduct from their E-rate funding requests the value of ineligible services bundled with services eligible for E-rate support, a process referred to in the E-rate program as cost allocation. The 2010 Clarification Order permitted, under limited circumstances, E-rate applicants to seek E-rate support for purchases of eligible services bundled with ineligible components without providing a cost allocation separating out the value of the ineligible components. The Wireline Competition Bureau finds that, allowing E-rate applicants to purchase bundles of eligible products or services and ineligible components without deducting the value of the ineligible components risks having the universal service fund (Fund) overpay for services and resulted in applicant and service provider confusion. The Wireline Competition Bureau determined that E-rate applicants must deduct the value of ineligible components bundled with eligible services unless those ineligible components qualify as "ancillary" to the eligible services under the Commission's rules.