Educational Service Agencies

Educational Service Agencies (ESAs) in many states play key roles in the economical and efficient provision of a wide range of educational services to their component school districts. ESAs are known by a variety of names including Educational Service Units (ESUs), Local Educational Agencies (LEAs), and Board of Cooperative Educational Services (BOCES).

ESA services may include:

  • Instructional-level services
  • Instructional support-level services
  • Non-instructional-level services

E-Rate Funding Eligibility for ESAs

Federal law defines an ESA as a “regional public multiservice agency authorized by state statute to develop, manage, and provide services or programs to local educational agencies.” To determine whether an ESA is eligible to receive Schools and Libraries Program support as an applicant, USAC must verify that the ESA provides elementary or secondary education as determined under state law (whether the entity provides elementary or secondary education to its student population and whether the ESA facility is eligible for support because elementary or secondary education, as defined in state law, is provided at that facility). FCC rules do not specifically define or address ESAs.

USAC conducts a biennial survey of states and territories to determine whether ESAs are eligible to receive funding. State and territory officials are asked to describe the programs served by ESAs and whether ESAs operate facilities that they either own or lease that contain classrooms. The officials are asked to provide legal support for the information they supply and to certify the accuracy of their determinations. The Eligibility Table for Educational Service Agencies includes the most recent information provided by the states and territories.

Potential Eligibility Conflicts

ESAs may perform as many as three roles in the Schools and Libraries Program.

  • ESAs are applicants for program discounts.
  • ESAs provide program consulting assistance to their component districts.
  • In some instances, ESAs are service providers of eligible services.

When ESAs function as service providers, two potential conflicts may raise concerns.

  • In some states, state law or regulation permits school districts to select services provided by ESAs on a non-competitive basis.
  • Some states provide subsidies so that ESAs may provide discounted rates to public schools.

These roles raise potential conflict of interest issues, primarily with respect to compliance with the FCC’s competitive bidding requirements.

Avoiding Conflicts of Interest

ESAs That Do Not Function as a Service Provider

An ESA that does not serve as a service provider may assume the role of an applicant in filing the FCC Form 470 (Description of Services Requested and Certification Form), evaluating bids, filing the FCC Form 471 (Description of Services Ordered and Certification Form), and obtaining discounts for services for itself (if it is an eligible recipient of discounted services) and its component districts.

An ESA that does not function as a service provider may assume the role of a consultant to its component districts in regard to their service and equipment requirements, and help its component districts apply for and administer the receipt of discounts.

ESAs That Do Function as a Service Provider

Applicants must select service providers through a fair and open competitive process. The most cost-effective bid for services or equipment must be selected with price being the primary factor considered.

A potential conflict may arise when an ESA is a service provider and also an applicant and/or a consultant to school districts. The potential conflict is that the selection of the service provider may not be fair and open but may, in fact, provide an unfair advantage to the ESA as service provider.

The potential conflict may be resolved if the ESA provides only one type of eligible services (Data Transmission Services and Internet Access, Internal Connections, Managed Internal Broadband Services, or Basic Maintenance of Internal Connections), and functions in its non-service provider role(s) (e.g., applicant or consultant) with respect to separate applications for other service types.

Examples of this conflict include, but are not limited to the following:

  • an ESA cannot be both an applicant and a service provider on the same application;
  • an ESA that is a consultant to an applicant for a particular application cannot also be a service provider on that application.

ESAs in general are large enough to provide organizational and functional separation between staff acting as service providers and staff providing application and administration assistance. However, the ESA must be prepared to clearly show the separation of functions to USAC with appropriate documentation. Examples of such documentation include organizational flow charts, budgetary codes, and supervisory administration.

Other Potential Concerns

Even if state procurement rules permit public school districts to select an ESA’s services on a non-competitive basis, FCC rules require that applicants for services must use competitive bidding for eligible services. The FCC competitive bidding requirements must be met for the services to be eligible for discounts. These requirements include:

  • Posting on USAC’s website an FCC Form 470 (Description of Services Requested and Certification Form),
  • Fair and open consideration of all resulting proposals, whether in response to a Request for Proposal (RFP) or to an FCC Form 470, and
  • Selecting the most cost-effective bid with price being the primary factor.

Some states provide offsetting aid payments to public school districts, reducing some ESA charges for equipment and services eligible for discounts. If an ESA is acting as a service provider, any state reductions must be applied after the discount is applied.

The evaluation of alternatives must include price without discounts as the primary factor. It does not violate FCC rules to include other factors (weighted less heavily than the non-discount price) relating to the availability of discounts from other sources for particular alternatives.

Finally, since ESAs may be both applicants and service providers on separate applications, discounts cannot be paid twice for the same service. If an ESA is serving as an Internet service provider to its districts and the districts are seeking discounts on that Internet access, the ESA cannot also seek discounts as a consortium leader for those services from the underlying providers.