What Is E-Rate Category 1 and What Qualifies?

Demystifying E-rate Category One Funding

Many years ago, the United States government initiated a program called E-rate, which, simply put, provides funding to help schools and libraries get online. In this blog post, I aim to demystify what's known as Category One funding—the types of internet and connectivity services eligible for government reimbursement.

Types of Category One Connectivity

Let's begin with the simplest aspects of Category One funding. Category One refers to services that receive priority funding because they provide the essential internet access coming into your school or library. (I will discuss Category Two funding, which covers internal equipment like switches and wireless access points, in another post.) There are three types of connectivity that fall under Category One:

1. Internet with Fiber

This is when you contract an Internet Service Provider (ISP) to deliver a fiber-optic connection directly to your school. Fiber-optic connections can reach speeds up to 100 gigabits per second (as of mid-2021), and future advancements may increase this capacity even further by utilizing different wavelengths of light. While we won't delve deeply into the technical details, it's important to note that fiber-optic cables offer significant potential for expansion.

When it comes to Category One connections, obtaining an internet connection via fiber is the most qualified option. You can receive speeds of 1 gigabit, 10 gigabits, or more directly from the ISP, and this is covered by E-rate. The percentage of costs covered by E-rate is based on the proportion of students eligible for free or reduced-price lunches at your campuses. As with any government program, there are nuances and complexities, but suffice it to say that standard internet fiber connections are covered without issue.

2. Internet with Non-Fiber

Internet with non-fiber connections is also covered. While fiber-optic connections are excellent due to their symmetric speeds—meaning equal upload and download speeds, which is especially important in today's world where upload speed is critical for activities like broadcasting online classes—non-fiber connections are still an option. Non-fiber connections include DSL and cable modems, the types typically found in homes. These are known as asymmetric connections because the upload and download speeds are typically different, with higher download speeds and limited upload speeds. This can be less ideal for activities like running online classes from your school.

3. Commodity Internet

The third type is commodity internet. On E-rate funding forms, this refers to internet services without specific transport details. Essentially, you're paying for internet connectivity without concern for how it is delivered to your school—it could be bundled with other services or provided through various means. For example, a provider might offer you 200 megabits per second of internet connectivity without specifying the transport method. This commoditized internet service is also covered by E-rate.

Non-Internet Connection Types Covered Under Category One

These services are considered broadband transport, as opposed to direct internet access, and are also covered under E-rate Category One funding. They may include internet access, placing them in the previous category, or they might simply provide transport to connect multiple buildings within your campus.

For example, your campus might have a main building and several sub-buildings. Your internet connectivity enters through the main building, and then you need to connect the sub-buildings. These buildings could be just across a sidewalk or miles away; if they are part of your campus, they require connectivity.

1. Leased Lit Fiber

One type of connectivity that can be funded is leased lit fiber. This means a provider—possibly the same one supplying your internet connectivity—allows you to use their fiber-optic infrastructure, which they manage and maintain. If something happens to the fiber, they handle repairs and monitor connectivity issues. This is what is meant by "lit fiber." It's their fiber, and they charge you a monthly fee to use it to connect your buildings, providing network access between them. This is known as leased lit fiber and is covered under E-rate Category One.

2. Leased Dark Fiber

Another option is leased dark fiber. Dark fiber refers to unused fiber-optic cables that were installed but not "lit" with service. Historically, the majority of the cost in installing fiber comes from the construction work—digging up streets, laying conduit—not from the fiber itself. Anticipating future needs, carriers often installed thousands of extra fiber strands. These unused fibers can be leased to you.

With dark fiber, the provider doesn't manage or support it; they simply grant you access to a fiber strand that you can use as you see fit. You connect your own equipment to it and handle all aspects of its operation. While leasing dark fiber may be more expensive initially compared to lit fiber, you gain full capacity and control over the fiber line. By utilizing different wavelengths of light, you can increase the bandwidth, potentially making it more cost-effective in the long run.

However, it's important to note that E-rate will require you to justify that this option is actually more cost-effective than leasing lit fiber. Simply wanting to have control over your own fiber isn't sufficient; you must demonstrate that it is a financially prudent choice compared to paying a service provider monthly for lit fiber.

3. Category One Network Equipment

Additionally, leasing dark fiber may require you to obtain equipment to make it operational—this is known as Category One equipment. While E-rate Category Two funding covers internal network equipment like wireless access points, switches, routers, and firewalls, Category One network equipment pertains to the hardware needed to make these external connections work. For instance, dark fiber won't function without the necessary Category One equipment.

4. Self-Provisioned Fiber

The same considerations apply to self-provisioned fiber. This is when your school or library incurs the construction costs to run fiber between your buildings. For example, your main building might serve as a central hub with various internet connections, and you need to connect it to numerous other buildings across your campus, which could span an entire metropolitan area.

You might choose to trench the fiber yourself, and recent E-rate guidelines (as of 2016) allow for sharing some of that fiber with non-E-rate entities, such as businesses or city organizations. You can share costs and services with others not part of the E-rate program. However, if you opt for self-provisioned fiber—essentially becoming a type of Internet Service Provider (ISP) yourself—you must justify that this option is more cost-effective in the long term than simply signing up for a basic internet connection or leasing lit fiber. E-rate will require a thorough cost analysis to support this choice.

5. Non-Fiber Connectivity

Non-fiber connectivity is another option. This includes methods beyond laying fiber-optic cables, such as installing wireless access points or dishes on your buildings to transmit signals wirelessly. You can establish connections across a parking lot or even over miles to another building by beaming internet access between them. This approach is more common than you might think and can be very cost-effective—often more so than fiber. With the right network equipment, wireless connections can also be highly stable. Non-fiber connectivity is also eligible under E-rate Category One funding.

Conclusion

Understanding the E-rate program's complexities can be daunting, and many schools and libraries hesitate to participate due to this. My hope is that by simplifying these concepts, this information becomes more accessible, enabling you to take advantage of the funding available for your institution. When it comes to E-rate Category One funding, understanding your options is the first step toward optimizing your connectivity solutions.

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