The second round of comments on the proposed Funding Year 2026 Eligible Services List (ESL) shows growing alignment around a more modern, streamlined E-rate framework. Major stakeholders, including statewide coordinators, national broadband advocates, large service providers, and consulting firms, used their reply comments to sharpen themes that first emerged in the initial filing window.
Taken together, the reply record reinforces four big ideas:
- Applicants need a simpler, more unified Category Two experience.
- Software and manufacturer support licenses should be treated as Internal Connections, not split across categories.
- Proactive managed services are increasingly central to how schools and libraries run their networks.
- Modern security and core network functions, including firewalls and DDI (DNS/DHCP/IP management), must be addressed more clearly in the ESL.
Funds For Learning’s own reply comments propose a unifying lens for these themes: a single Category Two framework that supports both internal connections hardware and the managed services needed to operate it, with today’s labels (like “MIBS”) viewed as delivery models rather than permanent silos.
1. Toward a single Category Two framework
Several reply filers call on the Commission to move away from the current three-way split among Internal Connections, Managed Internal Broadband Services (MIBS), and Basic Maintenance of Internal Connections (BMIC). Their rationales differ, but the direction of travel is similar:
- State coordinators and consulting firms document real examples where the IC/MIBS/BMIC distinctions have produced avoidable denials and rescissions, purely based on how a service was labeled on the Form 470 or 471, not on whether the underlying function should be eligible.
- Technology and broadband advocates note that these internal labels do not reflect how solutions are marketed or purchased in the real world, forcing applicants to translate ordinary contracts into E-rate categories.
In its reply comments, Funds For Learning frames these points within a simple end-state: one Category Two service type on the applicant-facing forms that encompasses equipment, licenses, and managed services. Under that model, the program can still track and report on internal connections versus managed services behind the scenes, but applicants experience a single Category Two system, not three separate checkboxes.
Reply commenters generally acknowledge that systems and training may require a phased approach. FFL’s reply therefore couples its single-C2 vision with practical short-term steps, such as simplifying how Category Two choices appear on Form 470 and clarifying that mis-labeling among sub-categories, by itself, should not cost an applicant its funding.
2. Strong support for classifying manufacturer support licenses as Internal Connections
The Bureau’s proposal to treat all manufacturer support and right-to-use licenses as Internal Connections drew broad support in the initial round, and the reply filings reinforce that consensus.
Across the board, commenters describe:
- Years of confusion about whether to place software licenses, firmware updates, and remote configuration services under IC, BMIC, or MIBS.
- Cases where the same license was treated differently across forms or reviewers, leading to competitive bidding issues, PIA denials, or post-commitment clawbacks.
Reply filers argue that if a license is necessary to operate eligible internal connections equipment, and is functionally indistinguishable from other IC-type licenses, it should be treated as Internal Connections for E-rate purposes.
FFL’s reply comments echo this logic and support the Bureau’s proposal, urging the Commission to adopt it in the final FY 2026 ESL and to provide practical transition guidance for multi-year agreements already in place.
3. Managed services vs. BMIC: clarifying roles, reducing confusion
The reply record also sharpens the contrast between proactive managed services and reactive BMIC:
- Education and broadband coalitions describe managed internal broadband services as a lifeline for smaller and rural applicants without dedicated IT staff, highlighting data showing heavy MIBS usage among districts under 5,000 students.
- State networks and service organizations characterize managed services as 24/7 monitoring, configuration, and preventative maintenance, compared with BMIC’s traditional break-fix, time-and-materials approach.
Several commenters recommend keeping a path open for managed services while questioning whether BMIC still needs to exist as a separate front-end choice. Some propose folding BMIC-type work into a broader managed-services construct; others suggest eliminating BMIC over time while keeping a narrow space for legacy arrangements during a transition.
FFL’s reply comments take a similar line but tie it explicitly to the broader simplification agenda. In the near term, FFL recommends:
- Treating BMIC-style maintenance agreements as non-recurring, so their treatment matches how they are actually purchased; and
- Directing BMIC-type activities toward a managed-services framework, rather than sustaining BMIC indefinitely as a stand-alone category.
In the longer term, these changes are framed as steps toward that single Category Two designation where “MIBS” is an operational model, not a separate program track.
4. Firewalls and security: aligning policy with modern practice
Reply commenters continue to underscore that the “basic vs advanced” firewall distinction no longer reflects modern reality. Today’s firewalls — whether physical or virtual, on-premises or managed — typically bundle multiple integrated security features, including:
- Stateful inspection
- Intrusion detection and prevention
- VPN support
- Application-layer filtering
Forcing applicants to isolate and cost-allocate among these inseparable features, they argue, adds complexity without materially protecting the Fund.
FFL’s reply comments build on this theme from its initial filing, arguing that core, integrated security functions necessary to make broadband usable and reasonably safe should be recognized within the Category Two framework. The reply filings generally stop short of calling for a broad “cybersecurity expansion” within E-rate, but they do press for an ESL that acknowledges modern perimeter protections as part of basic connectivity, not as speculative add-ons.
5. Clarifying DDI (DNS, DHCP, IP address management) eligibility
Another area where the reply record adds nuance is DDI: the combination of DNS, DHCP, and IP address management that underpins every IP network.
- Technology providers and consultants alike stress that DDI is not a luxury; it is the control plane that enables devices to communicate and users to reach online resources.
- Several filings note that DDI functions are already implicitly funded when they are embedded in routers, firewalls, or Internet access services, and argue that explicitly acknowledging them in the ESL would simply codify current practice and support vendor-neutral designs.
FFL’s reply comments support this clarification, focusing in particular on DDI as an Internal Connections function and, where delivered as part of a broader service, as an eligible managed solution under Category Two.
A Converging Vision for a Modernized ESL
Across both rounds of comments, a clearer picture is beginning to emerge. While stakeholders approach the ESL from different perspectives, many of the themes raised show broad convergence around similar modernization goals.
Multiple reply comments highlight:
- The need for consistent treatment of software and licenses, particularly those essential to operating internal network equipment.
- The importance of proactive managed services, especially for smaller applicants that lack dedicated IT staff.
- Recognition that firewall and DDI functions are foundational components of today’s broadband environments.
- A desire for a simpler and more intuitive Category Two structure, one that reduces misclassification and administrative friction.
These themes align with issues that have surfaced repeatedly in applicant feedback, technology trend data, and policy discussions across the E-rate community. The reply record suggests that, even without identical prescriptions, stakeholders are increasingly identifying the same pain points, and many are pointing toward similar solutions for addressing them.
What this means for applicants
The reply record highlights several areas where stakeholders see opportunities for improvement in the Eligible Services List. While the FCC has not yet indicated what revisions it may adopt for Funding Year 2026, the themes raised in this docket point to issues that applicants consistently confront: clarifying how software and support licenses are treated, understanding the role of managed services, navigating modern security needs, and reducing the friction created by multiple Category Two sub-types.
As the Commission reviews the full set of comments, applicants should monitor the proceeding closely and remain attentive to any ESL updates that could affect procurement plans or future filings. Regardless of the final decisions, the conversation underway reflects the evolving realities of school and library networks and the ongoing effort to align E-rate policy with those needs.
Funds For Learning will continue tracking developments, providing analysis, and supporting applicants as the FCC’s review progresses.
