Item 21 Attachments For Form 471

1. Item 21 Attachment Overview
2. Item 21 Attachment Examples
3. Certifications and Additional Information to Include in Item 21 Attachments
4. How to File the Item 21 Attachment
   Appendix:  Further Examples of Certifications and Additional Information

Each Form 471 Block 5 Funding Request must include a description of the products and services for which discounts are being sought. This description is known as an "Item 21 Attachment."

Clear and complete Item 21 Attachments allow an efficient review of funding requests so that prompt funding decisions can be made. Incomplete or unclear Item 21 Attachments slow the decision process, to the detriment of applicants and service providers.

The paragraphs below describe the components of Item 21 Attachments, and provide several examples.

1. Item 21 Attachment Overview

Several different formats are possible for the Item 21 Attachment. However, the Item 21 Attachment generally consists of three parts, as follows:

• Narrative overview or description
• Line item detail of the products and services requested
• Additional details such as equipment locations or other information needed to support the specific funding request.

Applicants often receive the assistance of service providers in creating the Attachment, which can be one or more of the following:

Applicant-provided documentation
A quote or bill from the vendor
A copy of the contract for the service

In addition, the SLD has developed a prototype on-line system for creating Item 21 Attachments as part of its Eligible Products Database pilot program. It is available at http://www.sl.universalservice.org/vendor/epd_pilot.

Narrative description.  The narrative description should be a summary that allows SLD staff to understand the objective of the funding request.  For example:

• “Additional E-mail servers for three locations”
• “Internet access for new library branch”
• “New data distribution equipment to replace old equipment”

Line item detail.  Regardless of the specific format utilized, the Item 21 Attachment should include the following type of information:

Additional details.  Products and services that can be supported with E-rate funds are “conditionally eligible,” which means that they are eligible for funding if used in certain ways.  The Item 21 Attachment is the applicant’s opportunity to provide sufficient information so that SLD staff can make a determination about whether the applicant’s proposal meets FCC eligibility rules.  This document, the Eligible Services List, and other documents provided in the Reference Area of the SLD web site, provide further information about the ways that products and services should be used if E-rate funding is to be obtained.

Location information.  The instructions for Form 471 for Fund Year 2005 indicate that Internal Connections funding requests are to include information about where the physical components will be located.  This is often the same as the entities that are receiving service, as indicated in Block 4 of Form 471.  However, in some cases, components can be installed in a location different than the entity receiving service, such as when components are located at a district office but serve the needs of one or more separate schools.  Examples of information that specify the physical location of internal connections products could be:

• “One router and associated components per school”
• “All equipment to be located at District Office”
• “Components to be located at entity number 12345”
• “One file server will be located at each location specified in Block 4, except three file servers will be installed at entity number 12345.”

An overall specification for the location of components may be possible for some funding requests, while in other cases information may be required that is specific to some or all line items.

In the next section, some examples of Item 21 Attachments are presented.  In Section 3, further information about the “Additional Details” section of the Item 21 Attachment is provided.

2. Item 21 Attachment Examples

Examples are provided below (in Microsoft PDF file format) to assist applicants in understanding an acceptable layout and relevant information for the Item 21 Attachment. Click on the links below to view each example.

To view an Item 21 Attachment that features Internal Connections, click here

To view an Item 21 Attachment that features Internet Access Services, click here.

To view an Item 21 Attachment that features Telecommunications Services, click here.

Submission of a representative telephone bill.   In addition to the above examples, for telephone services, an applicant may submit a previous, representative bill, and optionally may include a listing of the previous year's charges in order to substantiate these charges for the next fund year. To view an Item 21 Attachment that is based on a representative previous phone bill, click here. Any ineligible components of the phone bill (such as extra costs for an unlisted number) must be removed from the funding request. Any funding requests greater than that indicated by the historical information submitted must be justified with specific information, such as: "Two additional phone lines are being installed."  General information, such as “anticipated growth” is insufficient unless accompanied by specific and verifiable rationale.  If 30% or more of a funding request does not have specific justification information, the entire cost may be denied.

3. Certifications and Additional Information to Include in Item 21 Attachments

The above examples illustrate relatively straightforward funding requests. However, in many instances additional information is useful or necessary. The SLD often will request additional information during its review process.  Applicants can assist SLD review of their funding requests by providing information as a part of the Item 21 Attachment that would otherwise be requested during the review process.

In general, further information will be requested where information submitted is not sufficiently detailed, or where additional review is deemed appropriate.  For example, the following information submitted without further details would NOT be sufficiently complete for the SLD to make a positive funding determination:

For this example, SLD staff would need to request further information about the specific products being purchased and the details of the requested technical services.  SLD staff also may request copies of vendor quotations, a specific listing of the modules or specifications for a product, and/or copies of contracts, so for complex configurations or relatively high-end components, applicants may wish to include this information as part of the Item 21 Attachment.

Funding requests should be accurately described in sufficient detail to enable SLD staff to make efficient and correct funding determinations.  Applicants should check the Eligible Services List, and other documents available in the Reference Area of the SLD web site, in order to understand the eligibility requirements for the products and services being requested.  The Item 21 Attachment should provide correct and complete factual information that shows that the conditions for eligibility are satisfied.  For example:

• “The Web hosting service does not include any ineligible content creation services.”
• “The memory upgrade requested will be installed in an eligible e-mail server.”
• “The multiple T-1 lines are not redundant or duplicative, and are required for the bandwidth needs of the applicant.”
• “The training requested consists of basic instruction in the use of eligible equipment.  It is directly associated with the purchase of this equipment, and is part of the same contract.  No end user training is being provided.”

SLD’s review process also requires further information when funding requests include the following components or configurations:

• Remote access equipment
• Equipment that can establish a Virtual Private Network (VPN)
• File servers
• Extensive file storage
• Wireless components
• Ineligible functionality that must be cost allocated
• Amortization of up-front service provider infrastructure costs
• On-premise Priority 1 equipment

The Appendix to this document provides suggestions for information to include in Item 21 Attachments when any of the above functions or features is included.

4. How to File the Item 21 Attachment

The Item 21 Attachment can be submitted to SLD by e-mail, by fax, by U.S. mail or courier, or as a part of a manually filed Form 471 application. The attachment should include this information:

A label of "Form 471 Item 21 Attachment"

The applicant's name

The Attachment Number you have specified on Form 471 for the Item 21 Attachment.

Additionally, if the Item 21 Attachment is being submitted separately from the Form 471, then the Attachment or a cover letter must also include:

The applicant's Billed Entity Number

The Form 471 application number, if one has been assigned through electronic filing, or the Form 471 Applicant Form Identifier, if the Form 471 has been filed manually.

The Item 21 Attachment must be received before the SLD can begin review of a Form 471 application.  While the Item 21 Attachment need not be submitted within the "Form 471 filing window," it must be filed in a timely fashion so that SLD can review the information and make a determination of product and service eligibility.

Applicants who already have been contacted by a member of the SLD review team about a submitted Form 471 should send the Item 21 Attachment to the e-mail address or fax number that the SLD review team member provides. Otherwise, Item 21 Attachments should be submitted in either of the following ways.

Send submissions via E-mail. (Do not send submissions other than Form 471 Item 21 Attachments to this e-mail address.) Documents may be sent in most commercially available word processing or spreadsheet formats. Scanned documents may also be sent. (TIF file format is preferred.) Total file size of the e-mail message must be limited to less than 10 Megabytes. If you have more than one Form 471 application, do not combine Item 21 Attachments from multiple Form 471 applications in the same e-mail message.

Send fax submissions to (973) 599-6511. (Do not send submissions other than Form 471 Item 21 Attachments to this fax number.)

Send U.S. mail submissions to SLD-Form 471, P. O. Box 7026, Lawrence, Kansas 66044-7026. For courier delivery services or U.S. Postal Service Return Receipt Requested, send to SLD Forms, ATTN: SLD-Form 471, 3833 Greenway Drive, Lawrence, Kansas 66046.

All certifications provided as a part of the Form 471 also apply to the Item 21 Attachment, including certifications of compliance with state and local procurement laws and compliance with Schools and Libraries Support Mechanism program rules. Misrepresentations on the Item 21 Attachment can result in the administrative and criminal penalties described in Block 6 of Form 471.

Appendix:  Further Examples of Certifications and Additional Information

The following examples describe particular cases where further information should be supplied with Item 21 Attachments.

Remote access equipment. FCC rules do not allow funding for products or services that are used to provide data connectivity into an applicant's network from ineligible locations. A product that is capable of providing such a remote access capability can be eligible for discounts only if the applicant provides a certification that it will not be used for such ineligible purposes. The required certification is as follows:

The remote access equipment for which I seek discounts either will not be used to provide remote access or, if it is to be used remotely, I will take steps to ensure that only entities eligible for support under the Schools and Libraries Support Mechanism have the capability to access it.  In the latter case, for example, access will not be available from homes or other non-school or non-library sites.

If this certification cannot be truthfully completed, and there would be a combination of both eligible and ineligible uses, then refer to the SLD document Cost Allocation Guidelines for Products and Services that Contain Eligible and Ineligible Components.

Virtual Private Networks (VPNs).  Some data distribution components such as routers include the capability to establish a Virtual Private Network, and such functionality is not eligible under FCC guidelines.  Therefore, E-rate support cannot be provided for products or modules designed specifically as VPN devices.  However, products that include this functionality, but can be used for other eligible purposes, can receive E-rate support if applicants submit a certification that the components will not be used for ineligible purposes.  This certification may be submitted:

The data distribution equipment for which I seek discounts will not be used for ineligible purposes, such as establishing a Virtual Private Network.  Any such functionality available in E-rate funded components will not be utilized.

If this certification cannot be truthfully completed, and there would be a combination of both eligible and ineligible uses, then refer to the SLD document Cost Allocation Guidelines for Products and Services that Contain Eligible and Ineligible Components.

Network file servers.  The eligibility of network file servers is dependent on the use of the servers.  Therefore, the SLD will not approve funding requests for file servers unless the specific use(s) of the file servers are specified.  In addition, file server costs should be allocated appropriately between eligible and any ineligible uses.  If the use of the file server is fully eligible, then applicants can assist the SLD review process by including the following statement: 

The network file server(s) for which I seek discounts will be used only for the following eligible purposes:  [applicants should indicate the eligible uses for the server(s)].  The server(s) will not be used for ineligible purposes, including but not limited to the following ineligible uses:  Application Server (e.g., providing application software to end users), Database Server, Data Warehouse Server (including storage of non-e-mail end user files), and Archive Server.

The Eligible Services List, available in the Reference Area of the SLD web site, provides additional information about the eligible and ineligible uses of file servers.

If this certification cannot be truthfully completed, and there would be a combination of both eligible and ineligible uses, then refer to the SLD document Cost Allocation Guidelines for File Servers and Other Components.

Extensive file storage.  Computer equipment such as hard drives that is used for storage is eligible or not eligible, depending on how it is used.  When funding requests include components that provide particularly high data storage, the SLD may seek further information to ensure that funding is provided only for eligible uses.  If applicants believe that their funding requests could raise a question about the eligibility of included storage, and if the use of computer storage equipment is fully eligible, then applicants can assist the SLD review process by including the following statement:

The storage capacity for which I seek discounts will be used only for the following eligible purposes:  [applicants should indicate the eligible uses of the storage].  The storage will not be used for ineligible purposes, including but not limited to the following ineligible uses:  storage of end user files other than e-mail, storage for application software or other ineligible software, storage of archival information, and storage for caching.

If this certification cannot be truthfully completed, and there would be a combination of eligible and ineligible uses, then refer to the SLD document Cost Allocation Guidelines for Products and Services that Contain Eligible and Ineligible Components.

Wireless Components. Wireless components are technologically capable of providing connectivity either within an applicant’s grounds or beyond those grounds across a public right of way. FCC rules indicate a presumption that components are ineligible as internal connections in this latter configuration, i.e., the components are not eligible when utilized for a wide area network.  Therefore, Internal Connections funding requests that include wireless access points or antennas should include a certification that the components will only be used in an eligible configuration, as follows:

The wireless components for which I seek discounts will not be configured to enable data or other communication across a public right of way, and will be used only for connectivity within a single campus of a school or library facility.

If this certification cannot be truthfully completed, and there would be a combination of eligible and ineligible uses, then refer to the SLD document Cost Allocation Guidelines for Products and Services that Contain Eligible and Ineligible Components.

Ineligible functionality that must be cost allocated. Applicants must only seek funding for eligible products and services. Cost of ineligible components or functionality must be subtracted. Click here to view an Item 21 Attachment that includes a subtraction for ineligible functionality. For further information about subtracting ineligible capability see Cost Allocation Guidelines for Products and Services that Contain Eligible and Ineligible Components.

Amortization of up-front capital costs. For projects that have service provider infrastructure with up-front capital costs greater than $500,000, the initial capital costs must be amortized over at least a three-year period. To view an Item 21 Attachment that shows the amortization of capital costs, click here.

The use of E-rate funds for the buildout of a service provider's infrastructure is limited. The FCC has recognized that some business arrangements between an applicant and service provider, even if labeled a lease of services, can reach essentially the same result as a prohibited WAN purchase by applicants. The SLD will not commit to discounts on such arrangements. Further information about relevant program rules may be found in Wide Area Network (WAN) Fact Sheet posted in the Reference Area of this web site.

On-premise Priority 1 equipment. In limited circumstances, some types of equipment located at the applicant site can be funded as a part of an end-to-end telecommunications or Internet access service. Depending on the complexity of the request, the Item 21 attachment for such funding requests may consist of from two to four components:

• The listing of products and services that make up the request. This should include a specification of the components that will be located at the applicant site, and a narrative overview of the funding request.
• A statement indicating whether or not there is compliance with each of the several conditions for on-premise Priority 1 equipment. (The web site reference provided below has further information about each of these conditions.)
• When not otherwise clear from the other information provided, a calculation that shows whether or not up-front capital charges of on-site components are less than 67% of total charges requested.
• For situations in which the equipment configuration is not clear from other information submitted, a network diagram may be required that shows how the components are interconnected with an applicant's internal connections components.

In cases where the above information is not provided, SLD may request further information during review of the application. To view an Item 21 Attachment that specifies on-premise Priority 1 components, click here. Further information is available in the document On-Premise Priority 1 Equipment posted in the Reference Area of this web site.

In addition to the above information and certifications, the SLD reiterates that the applicant certifies as a part of the Form 471 that (1) resources to use the services effectively have been secured (Form 471, Block 6, Item 25), and (2) all required documents will be retained for a period of at least five years after the last day of service delivered (Form 471, Block 6, Item 32).