The E-Rate program provides discounts on two categories of services for eligible schools and libraries. Understanding exactly what's covered—and what's not—is essential for filing an accurate Form 471 and maximizing your funding.
USAC publishes an updated Eligible Services List (ESL) each funding year. Here's what you need to know for FY2026.
Data Transmission Services & Internet Access
Category 1 covers the connectivity that gets internet to your building and between your buildings. Discounts range from 20% to 90% based on your poverty percentage.
Category 1 Eligible Services
Internet Access
| Service | Eligible? | Notes |
|---|---|---|
| Broadband internet access (fiber, cable, DSL) | ✅ Yes | Most common C1 service |
| Dedicated fiber internet | ✅ Yes | Higher capacity, dedicated bandwidth |
| Fixed wireless internet | ✅ Yes | Point-to-point or point-to-multipoint |
| Satellite internet | ✅ Yes | For rural areas without fiber/cable |
| Cellular/mobile data plans | ❌ No | Home internet for students not eligible |
| Residential internet for staff | ❌ No | Must be at eligible locations |
Data Transmission (WAN)
| Service | Eligible? | Notes |
|---|---|---|
| Wide Area Network (WAN) connections | ✅ Yes | Between eligible locations |
| Dark fiber leases | ✅ Yes | Long-term leases + maintenance |
| Lit fiber services | ✅ Yes | ISP-managed fiber connections |
| Ethernet transport | ✅ Yes | Point-to-point ethernet |
| MPLS circuits | ✅ Yes | Multi-site connectivity |
| Self-provisioned fiber (construction) | ✅ Yes | Special rules apply |
💡 Bundled Services
If your internet service includes bundled features (email hosting, web hosting, DNS), the entire service is eligible as long as the primary purpose is internet access. However, voice/phone services are no longer eligible as of FY2020.
Internal Connections (Wi-Fi & Network Equipment)
Category 2 covers the network equipment inside your buildings that distributes internet to users. Each school gets a $167/student budget over a 5-year cycle. Learn more in our Category 2 funding guide.
Category 2 Eligible Equipment & Services
Wireless Equipment
| Equipment | Eligible? | Notes |
|---|---|---|
| Wireless access points (WAPs) | ✅ Yes | Most common C2 purchase |
| Wireless controllers | ✅ Yes | Hardware or virtual |
| Cloud-managed wireless licenses | ✅ Yes | Multi-year licenses eligible |
| Wireless site surveys | ✅ Yes | As part of installation |
Network Switching & Routing
| Equipment | Eligible? | Notes |
|---|---|---|
| Network switches (managed) | ✅ Yes | Layer 2 and Layer 3 |
| Core routers | ✅ Yes | Internal distribution only |
| PoE (Power over Ethernet) switches | ✅ Yes | Powers WAPs directly |
| Network modules and SFPs | ✅ Yes | Expansion modules |
Cabling & Infrastructure
| Item | Eligible? | Notes |
|---|---|---|
| Structured cabling (Cat 5e/6/6a) | ✅ Yes | New runs and replacements |
| Fiber optic cabling (internal) | ✅ Yes | Between wiring closets |
| Patch panels and cable management | ✅ Yes | Infrastructure components |
| Network racks and cabinets | ✅ Yes | For housing equipment |
| Electrical work | ❌ No | Not networking-specific |
| HVAC for server rooms | ❌ No | Facilities, not networking |
Security & Protection
| Item | Eligible? | Notes |
|---|---|---|
| Firewalls (hardware/virtual) | ✅ Yes | Network security appliances |
| Content filtering appliances | ✅ Yes | Required for CIPA compliance |
| UPS/battery backup (for network equipment) | ✅ Yes | Must protect eligible equipment |
| Security cameras | ❌ No | Physical security, not networking |
| Antivirus software | ❌ No | End-user software |
Installation & Configuration
| Service | Eligible? | Notes |
|---|---|---|
| Basic installation of eligible equipment | ✅ Yes | Labor for installing C2 equipment |
| Configuration services | ✅ Yes | Initial setup of networks |
| Basic maintenance (BMIC) | ✅ Yes | 24/7 support, repair/replacement |
| Training on new equipment | ❌ No | End-user training not covered |
| Ongoing managed services | ❌ No | Beyond basic maintenance |
What's NOT Eligible for E-Rate
These are commonly requested items that are not eligible for E-Rate funding:
⚠️ Common Ineligible Items
- End-user devices: Laptops, tablets, Chromebooks, desktops
- Servers: Application servers, file servers, email servers
- Software: Operating systems, productivity suites, learning management systems
- Voice/telephone services: Removed from E-Rate as of FY2020
- Video surveillance: Security cameras and DVR systems
- Printers and peripherals: All end-user peripherals
- Classroom AV equipment: Projectors, interactive displays, speakers
- Professional development: Teacher training, PD workshops
Key Rules to Remember
The "2-in-5" Rule for Category 2
Applicants can request Category 2 funding in any 2 out of 5 funding years within their budget cycle. You don't have to use all your budget at once—strategic planning helps maximize your investment.
Cost Allocation for Shared Equipment
If equipment serves both eligible and ineligible purposes (e.g., a firewall that also manages VoIP), you must allocate costs appropriately. Only the portion supporting eligible services can be funded.
Manufacturer Discontinuation
USAC does not require specific manufacturers or brands. You can choose any manufacturer as long as the product type is on the eligible services list.
✅ Planning Tip
Review the official ESL on USAC's website each year, as it can change. Our team monitors all ESL updates and advises clients on any changes that affect their funding strategy.
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