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Wide Area Networks (WANs)

A wide area network (WAN) is a voice, data, or video network that provides connections from one or more computers or networks within an eligible school or library to one or more computers or networks that are external to such eligible school or library. Excluded from this definition is a network that provides connections between or among buildings of a single school campus or between or among buildings of a single library outlet or branch, when those connections do not cross a public right of way.

Leasing a WAN is eligible for Schools and Libraries Program support but building or purchasing a WAN is not eligible.

To the extent that states, schools, or libraries build or purchase a WAN, the cost of such networks is not eligible for support. However, WAN capability can be obtained as a Telecommunications Service.

Additionally, WAN service can be eligible for discount as Internet Access, if leasing of the WAN is the most cost-effective means of obtaining Internet access. In that case, the service must be limited strictly to basic conduit access to the Internet.

An understanding of how USAC defines local area networks (LANs), other internal connections, and WANs is important to ensure that applicants submit funding requests that contain only eligible products and services. In addition, applicants should understand the eligibility requirements for the categories of service, such as Telecommunications Services, Internet Access, Basic Maintenance and Internal Connections.

FCC rules provide that the actual wires that carry data across public rights-of-way and the components located outside a school or library facility are WAN components and are evaluated for eligibility under Telecommunications Services and Internet Access. Networking components located within a school or library facility are most often internal connections rather than WAN components.

However, there is an exception to this general rule. If certain conditions are met, components located at a school or library can be considered part of "end-to-end" Telecommunications Services or Internet Access and can then be supported under these categories of service, rather than as Internal Connections.

FCC rules establish a rebuttable presumption that a connection does not constitute an internal connection if it crosses a public right-of-way. See the Eligible Services List for the appropriate funding year.

WAN Lease

Applicants can obtain support for the services of WANs by leasing these services under the program rules that apply to telecommunications services and Internet access, but not by procuring WAN components as internal connections. The term "lease" refers to arrangements whereby the ownership of the facility remains with the service provider. No ownership attributes are undertaken by the lessee (applicant). Whether or not an arrangement constitutes a lease will be based on a review of contractual terms and conditions.

WAN Discount Examples

  • Example A: Assume that the computers of a school district and library system are connected and share information among the various sites and use the network for voice telecommunications services, data transmission, and Internet access. The connections between the buildings are leased from an eligible telecommunications carrier. The price of the connections is eligible for support.
  • Example B: Assume that the computers of a school district and library system are connected among the various sites in order to share access to the Internet. The connections between sites are leased from a non-telecommunications carrier such as a cable company and are the most cost-effective means of accessing the Internet. The cost of leasing the connections is eligible for support as Internet access so long as the service is limited to basic conduit access to the Internet.
  • Example C: Assume that the computers of a school district and library system are connected and share information among the various sites and use the network for voice telecommunications and for the transmission of data. The connections between sites were purchased and installed by the school district and library system. These connections are not eligible for support because the connections are purchased and installed by the school district and library system.

Applicant Ownership Prohibition

Costs of eligible telecommunications services and Internet access must not provide ownership interest to applicants. Eligible costs in these two categories of service are for provision of services only, not applicant ownership.

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. USAC will not provide support on an agreement that is titled or described as a lease when, in effect, the terms of the agreement constitute a purchase.

Factors evaluated when making this determination include whether the applicant has exclusive access to the WAN facilities, whether a lease-purchase agreement exists, and whether a substantial payment for upfront capital costs is part of the agreement. Contracts with an option for the applicant to purchase WAN facilities will not be supported.

Support is not provided for the initial construction costs for WAN facilities being built for the exclusive use of an applicant, except in established rural areas where no acceptable alternatives exist. Except in such rural areas, applicants are expected to use the shared infrastructure facilities of service providers in order to obtain the most cost-effective service.

Although program support may not be used for the full construction costs of WAN facilities in a non-rural area, it may be used for a proportionate cost of WAN facilities that can be shared among multiple organizations.

USAC will review contractual terms, the technical configuration, and up-front construction costs to determine whether exclusive use is being provided. Costs in funding requests may be compared against the total costs of a service provider's construction project. These review steps allow USAC to determine whether the funding request is consistent with a simple lease of facilities (eligible) or whether it reaches essentially the same result as a prohibited WAN purchase by an applicant (not eligible).

Capital Investment Costs

Eligible telecommunications services and Internet access can include service provider equipment costs and/or a non-recurring charge for capital investment by the service provider. However, in cases where applicants enter a multi-year contract and the upfront or non-recurring charge is $500,000 or more, the total charge must be prorated evenly over a period of at least three years. Applicants may not seek to recover more than one-third of the total non-recurring charges in any one funding year if they are $500,000 or more.

Costs of eligible telecommunications services and Internet access must not provide ownership interest to applicants. Eligible costs in these two categories of service are for provision of services only, not applicant ownership.