Schools and Libraries (E-Rate)

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Step 4 Application Review

Updated July 2018

The 30% Rule

Each FCC Form 471 funding request is identified by a Funding Request Number (FRN) assigned by USAC's online system. Only eligible products and services should be included in an FRN. If services to be delivered include both eligible and ineligible components, applicants must subtract the ineligible costs from their FRNs.

The 30% Rule states that if 30 percent or more of the products or services included in a single funding request are ineligible, the funding request will be denied.

Removing Ineligible Items from an FRN

If USAC finds during application review that an applicant has included ineligible products and services in an FRN, USAC will contact the applicant to determine the exact cost associated with the ineligible items. The applicant can request that USAC either:

  1. Remove the ineligible items from the FRN or
  2. If there is a disagreement about the eligibility of a service, create a new FRN and move the ineligible items from the original FRN to the new FRN.

If the applicant does not respond to this request and USAC can determine the exact cost of the ineligible items, USAC will remove the ineligible items from the funding request and will continue to process the funding request. If USAC cannot determine the cost of the ineligible items, USAC will deny the funding request.