E-Rate Central News for the Week of September 21, 2009

· FY 2008 and FY 2009 Funding Status

· Update on Revised Bishop Perry Procedures

· Broad E-Rate Consultant Investigation

· E-Rate Updates and Reminders

· Schools and Libraries News Brief dated September 18^th

The E-Rate Central News for the Week is prepared by E-Rate Central. E-Rate Central specializes in providing consulting, compliance, and forms processing services to E-rate applicants. Additional E-rate information is located on the E‑Rate Central Web site (http://www.e‑ratecentral.com). To learn more about our services, please contact us by phone (516-801-7804) or through our Contact Us Web form (http://www.e-ratecentral.com/contactUs/contactForm.asp).

FY 2008 and FY 2009 Funding Status

As a result of the SLD’s recent IT upgrade no regular funding waves for either FY 2008 or FY 2009 will be released this week. We expect regular funding waves to resume next week.

Update on Revised Bishop Perry Procedures

As discussed in our newsletter of two weeks ago (http://www.e-ratecentral.com/archive/News/News2009/weekly_news_2009_0907.asp#b3), the SLD had recently revised its PIA application review procedures so as to limit corrections during the PIA process. Under a stricter interpretation of the 2006 Bishop Perry decision, permitting corrections of “clerical and ministerial errors,” the SLD had begun accepting increased funding changes only if brought to their attention as a part of the initial post-filing RAL process. Applicants seeking to make changes during regular PIA review were being denied with the following FCDL language:

According to the Bishop Perry order, applicants have an opportunity to correct certain clerical and ministerial errors they may have made when completing the Form 471 application during the RAL allowable period (date of RAL + 20 days). Your RAL request was received after the allowable correction period, therefore your RAL [or, more precisely, post-RAL] change request was not implemented.

We now understand that the FCC is considering modifications of this new interpretation so as to again permit at least certain funding changes during PIA — probably tied to a stricter definition of “clerical and ministerial errors.” While such new guidance is under consideration, it appears that the SLD is delaying final review decisions on applications that might be affected.

New guidance may be available as early as next week at the start of SLD training workshops which include a session devoted to pre-commitment corrections. One preliminary slide for this session indicates that, while PIA will work with applicants to correct clerical errors, it will not grant increased funding for applicant-requested changes. Another slide, however, suggests that increases might be permitted for PIA-identified corrections (e.g., for a mismatch between a Block 5 request and the supporting Item 21 attachment).

Applicants who had been denied PIA change requests in recent funding waves should consider filing USAC appeals. We estimate that at least 35 applicants (with 48 FRNs) have been denied FY 2009 increases specifically because of the Bishop Perry reinterpretation. By appealing, applicants may be able to benefit retroactively from any new and more flexible procedures that are implemented.

Broad E-Rate Consultant Investigation

The second shoe has dropped. As reported last June, USAC undertook a large-scale investigation of Trillion Partners and Trillion Digital Communications involving requests for information from all of Trillion’s E-rate customers (see http://www.e-ratecentral.com/archive/News/News2009/weekly_news_2009_0622.asp#b2). That action was reportedly triggered by an investigation of the Tucson Unified School District (“TUSD”) by the Arizona Attorney General “alleging antitrust, bid rigging, procurement fraud, and conflict of interest violations” involving TUSD, Trillion, and TUSD’s consultant E-Rate Consulting Services (“ERC”).

USAC is now expanding its investigation by formally requesting information from all of ERC’s former E-rate consulting clients. In addition to the Tucson-related procurement issues, USAC is also concerned with allegations that ERC “retained E-Rate program funding [i.e., BEAR reimbursements] belonging to its E-rate customers, instead of passing the payments to the intended recipients.”

Important: Please note that “ERC,” the commonly used abbreviation for E-Rate Consulting Services, LLC, most emphatically does not refer to our own company, E-Rate Central.

This round of USAC letters asks for responses to twelve questions or requests dealing with past or present consulting services received from ERC, ERC’s role in technology planning and procurement, BEAR procedures, and related documentation from FY 2004 to the present.

ERC-tainted applicants whose funding awards or payments have been delayed should respond to these inquiries as promptly and completely as possible. E-rate contacts should note that these letters appear to have been addressed to school superintendents (or equivalent), so it may be necessary to find them. Applicants who received the earlier Trillion-related inquiries should make sure that their responses are consistent. Common sense suggests that applicants should be particularly careful if using any new consultant recommended by ERC.

E-Rate Updates and Reminders

SLD IT Upgrade Status:

The interactive portion of the SLD’s Web site, which permits the online filing of most forms and provides access to various databases, was restored on schedule early last week. These online resources were shut down September 1^st to permit a move and upgrade of the SLD’s critical systems. The SLD is still dealing with a few system issues, but we consider the transition to be a success. Paper forms received by the SLD during the hiatus will be data entered now that the online filing system is back in operation.

Fall E-Rate Training:

The first two SLD training sessions will be held this week in Washington, DC on Tuesday and in Newark, NJ on Thursday. Schedules and registration information for the remaining six one-day SLD workshops are available on the SLD’s Web site. Preliminary copies of the 2009 Training Slides are also available (see http://usac.org/sl/about/training-presentations/training-presentations-archive/training-2009/fall/materials.aspx).

NTIA Broadband Grant Application Database:

The National Telecommunications and Information Administration (“NTIA”) has developed a database of all applications received for broadband stimulus funds (see http://www.ntia.doc.gov/broadbandgrants/applications/search.cfm). The database is searchable by organization, keywords, project or program type, or state.

Schools and Libraries News Brief dated September 18^th

http://www.universalservice.org/sl/tools/news-briefs/preview.aspx?id=253

The SLD News Brief for September 18, 2009, provides a number of tips for addressing FY 2008 and FY 2009 funding before the opening of the FY 2010 application window (probably in November).

For FY 2008, the SLD encourages applicants to finish filing BEAR forms for recurring services (for which the invoice deadline is October 28) and to check on the status of non-recurring services (which may have to be completed by September 30). For applicants already funded for FY 2009, the SLD suggests early filing of Form 486s (some of which must be filed by October 29).

---------------------------------------------------------------------------------------------------------------------------------

Disclaimer: This newsletter may contain unofficial information on prospective E-rate developments and/or may reflect E-Rate Central’s own interpretations of E-rate practices and regulations. Such information is provided for planning and guidance purposes only. It is not meant, in any way, to supplant official announcements and instructions provided by either the SLD or the FCC.