What is Category 1?
Published May 7, 2026
Category 1 (C1) covers the E-Rate services that connect a school or library to the internet — broadband, fiber, cellular data plans, and managed connectivity. Unlike Category 2, Category 1 has no per-applicant budget cap; eligible applicants can request as much C1 funding as their discount and need supports.
What services are eligible under Category 1?
Category 1 is the connectivity layer: data transmission service, internet access, dark fiber, lit fiber, leased lit fiber, cable, DSL, fixed wireless, and cellular data plans (including mobile hotspots and wireless school bus service in funding years where USAC has approved them).
USAC publishes the full Eligible Services List (ESL) each year — that document is the authoritative source for what counts as Category 1 in a given funding year.
How is Category 1 funded?
Category 1 has no five-year per-applicant budget cap. The applicant's discount rate (from the discount matrix) is applied to eligible costs, and USAC commits up to that amount.
Category 1 commitments are reported separately in the public USAC commitment data, which makes it possible to see C1 market share by SPIN, by state, and by service type.
Common questions
- Is internet access Category 1 or Category 2?
- Internet access is Category 1. Category 2 covers internal network equipment and internal connections that distribute service inside the school or library.
- Does Category 1 have a budget cap?
- No. Category 1 has no per-applicant budget cap. Applicants can request as much C1 funding as their discount rate and demonstrated need supports.
- Are Wi-Fi hotspots Category 1?
- When USAC has approved hotspot funding for the relevant funding year, hotspots and the cellular data plans behind them are typically classified as Category 1. The Eligible Services List for the specific funding year is authoritative.
Track this in real product data.
ERateSignal turns the public USAC datasets behind Category 1 into a working tool for E-Rate sellers — Form 470 alerts, SPIN market share, and territory analytics on the apex domain.
This entry summarizes publicly available FCC and USAC guidance for educational purposes and is not legal or procurement advice. Verify all information directly with USAC or qualified counsel before making business decisions. ERateSignal is not affiliated with, endorsed by, or sponsored by USAC, the FCC, or the U.S. Government.