Some Are Questioning the Validity
of GPS Data's E-Rate Refundability

(Sept. 14, 2007) — For many companies bidding the numerous school bus GPS contracts around the country, one thorny issue has hovered in the background: E-Rate refunds. It is used in some sales pitches, and its intricacies are argued over behind closed doors.

With certain GPS systems, data can be transferred through the cellular band like cell phones while others use a radio bandwidth. And like a cell phone, there is a monthly fee to use this option to transfer bus location and other GPS-related information back to a district’s transportation department. The “data transfer fee,” as listed on certain monthly bills, has been labeled as E-rate refundable by some companies. This means a school district could request reimbursement from the Universal Service Administrative Company (USAC) for this recurring charge.

USAC is a not-for-profit corporation that administers the federal Universal Service Fund. School refunds come from the Schools and Libraries Program department of USAC, which gives eligible schools and libraries a discount for certain telecommunication services, Internet access and internal connections.

Last week USAC representatives met with the FCC, and they planned to discuss whether schools could receive E-rate refunds for data transfer fees related to school bus GPS systems. The outcome had yet to be shared with STN. Although wireless Internet access service from portable devices is listed on USAC’c Eligible Services List Schools and Libraries Support Mechanism for Funding Year 2007, it does not specifically name the transfer of GPS data from school buses. According to one source familiar with E-Rate, some companies are using this idea of a federal rebate to sell their system.

“Sometimes they’ll just say that it’s E-rate refundable, but instead of making them put in for the refund they’ll just knock it off the monthly charge in the contract,” said the source, who wished to remain anonymous.

Others warn that school districts should be wary of attempting to apply for refunds for this type of service, citing the possibility of later audits and fines for receiving a rebate for a n ineligible service.

“They could get into a lot of trouble over this,” said a representative from a telecommunications products and services company.