·
FY 2008 and FY 2009 Funding Status
·
New FCC Appeal and Inquiry
Actions
·
E-Rate Updates and Reminders
·
Schools and Libraries News Brief dated October
23rd — Equipment Transfers
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
Wave 25 is scheduled for
release on October 27th for $55 million. This brings cumulative FY 2009 funding
to $1.2 billion. Priority 2 funding
is still being provided for discounts of only 85% or more, but the Schools and
Libraries Committee of the USAC Board is meeting this week to review a
recommendation to drop the threshold to 80%. FCC approval would be required to
implement this change.
Another item on this week’s
Schools and Libraries Committee meeting is the consideration of the Form 471
filing window dates for FY 2010.
Wave 71 for FY 2008 will be
released on October 28th.
The cumulative funding year total is currently $2.34 billion. Priority 2 funding at 87% is still
pending.
New FCC
Appeal and Inquiry Actions
As summarized below, a
number of FCC appeal decisions and requests for comments, directly or indirectly
related to E-rate, were released last week.
E-Rate Appeal
Decisions:
The FCC issued nine E-rate
orders covering appeals previously filed by nineteen applicants and one service
provider. In a break with the FCC
decision trend over the past few years (since the well-known Bishop Perry Order), which granted
appeals and/or waived rules in the majority of cases addressed, this batch of
orders denied seventeen of the twenty appeals — a strong indication that there
is a limit to the FCC’s patience with E-rate rule and procedural
violations.
The following is a summary
of these decisions. Actual copies
of the orders are available as the last nine items in the FCC’s Daily Digest of
10/21/2009 (http://www.fcc.gov/Daily_Releases/Daily_Digest/2009/dd091021.html).
|
Competitive Bidding
Issues |
|
|
Keyport
School
District (DA 09-2241)
Granted |
Determined that a
New
Jersey school had not violated state procurement
rules. In New Jersey,
“qualified” purchasing agents do not have to issue RFPs for purchases
under $25,000. (Form 470s
are, of course, still required.)
|
|
|
Amy Biehl Charter HS et al (DA 09-2242)
Denied
|
Rejected two requests
for waiver, one for a school that did not file a Form 470 and one for a
library that missed both the Form 470 and Form 471 filing
deadlines.
|
|
|
Exigent Technologies (DA 09-2245)
Denied |
Refused to overturn a
USAC recovery of funds decision from a service provider for the violation
of multiple rules involving E-rate funding for five schools. Exigent, relying on erroneous
consulting advice, had “donated” the non-discounted portion of the
schools’ service costs, helped the schools prepare Form 470s, encouraged
the schools to apply for equipment the schools did not need (and, in some
cases, was ineligible), and advised the schools that no technology plans
were required. It should be
noted that Exigent subsequently determined this advice was wrong, and
proactively investigated and reported the violations to
USAC.
|
|
|
Iosco Regional ESA (DA 09-2248)
Denied |
Refused to overturn a
USAC recovery of funds decision based on audit findings for FY 1998 and FY
1999 involving several rule violations including use of a service provider
as consultant during the competitive bidding process (plus failure to pay
the full non-discounted portion of services
received).
|
|
Eligible Services
Issues |
|
|
Hazelwood
School
District
(DA 09-2240) Granted
(remanded) |
Remanded a decision
to USAC involving an initial finding that Plexar II Stations were
ineligible. Plexar, a form of
Centrex, should be eligible, but the FCC noted that there may have been a
misunderstanding as to the nature of Plexar II
Stations.
|
|
|
Clark County School District et al
(DA 09-2243) Denied |
Rejected arguments by
three districts that “dark fiber” WANs should be treated as eligible
because: (a) in two cases, multi-year contracts were signed before FY 2004
(the year in which dark fiber was deemed to be ineligible); or (b) in one
case, dark fiber was the most cost effective
option.
|
|
|
Eagle Hill School et al (DA 09-2244)
Denied |
Confirmed USAC
determinations on the ineligibility of facilities for three schools,
including: (a) two involving student residences; and (b) one involving
pre-K and Head Start in a state in which such facilities were not defined
as elementary education.
|
|
|
Hancock County School District et al
(DA 09-2247)
Denied |
Upheld USAC decisions
denying funding (and, in one case, seeking recovery of funds) for
telecommunications services not provided by eligible telecommunications
providers. In three cases,
the FCC confirmed that cellular and paging services are telecommunications
services, and that resellers of these services are not eligible
telecommunications providers.
|
|
Clerical and
Ministerial Error Issue |
|
|
Helmet Unified School
District (DA
09-2246)
Granted |
Determined that a
district’s request to extend the service delivery deadline on four FRNs,
inadvertently omitted from a timely request to extend twenty-five other
FRNs, should be approved under Bishop Perry Order
procedures. |
Petitions for
Reconsideration:
The FCC requested comments
on two petitions for reconsideration filed by companies whose E-rate appeals had
been denied in FCC orders released last August. The comment deadline for both actions is
November 20th; reply comments are due December
7th.
The following is a summary
of the original FCC decisions.
Actual copies of the requests for comments are available in the FCC’s
Daily Digest of 10/22/2009 (http://www.fcc.gov/Daily_Releases/Daily_Digest/2009/dd091022.html).
|
Lazo Technologies et al
(DA 09-1797) Denied |
Denied a request for
relief by three subcontractors to a company whose president had been
convicted of E-rate fraud. A
more complete discussion of this decision was included in the E-Rate
Central newsletter of April 17, 2009 (see http://www.e-ratecentral.com/archive/News/News2009/weekly_news_2009_0817.asp#b3).
|
|
Integrity Communications (DA 09-1946)
Denied |
Denied a request for
review of a USAC order requiring the company to file a compliance plan as
a condition for future funding.
The company had been cited in an applicant audit for invoicing USAC
for non-contractual progress payments. Perhaps, more to the point, the
company had reportedly received a large contract from another applicant
that had not been competitively
bid. |
Two Important
Notices of Inquiry:
The FCC also released two
other requests for comments last week that are at least tangentially related to
E-rate.
|
Preserving the Open Internet Broadband Industry
Practices
(FCC 09-93) |
Comments requested on
proposed FCC rules designed to provide unencumbered, non-discriminatory
Internet access to all at equal prices, a concept also known as “net
neutrality.” (The contrary
view is that equal pricing means that high-volume Internet users will be
subsidized by average- or low-volume users.)
See http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-09-93A1.pdf.
|
|
Empowering Parents and Protecting Children in an
Evolving Media Landscape
(FCC
09-94) |
Comments are sought
on the extent to which “children are using electronic media today, the
benefits and risks this presents, and the ways in which parents, teachers,
and children can help reap the benefits while minimizing the risks of
using these technologies.”
See http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-09-94A1.pdf. |
The second inquiry is a bit
of a surprise. The Protecting Children in the 21st Century Act, enacted
last October, expanded the E-rate provisions of the earlier Children's Internet
Protection Act ("CIPA") to include a mandatory educational component in school
Internet Safety Policies. Although
the FCC has not yet provided any regulatory guidance on the implementation of
this Act, there were indications given last August that the FCC was working on a
draft Notice of Proposed Rulemaking ("NPRM") on the subject. The question now is whether this is that
inquiry.
If it is,
it’s unlikely to lead to any specific guidance on the new Act. Although there is a small section on
“Teaching Media Literacy to All Stakeholders,” dealing with the extent to which
media literacy is a required part of school curricula. CIPA itself is mentioned only once as a
footnote to this section. If it’s
not, it’s hard to imagine a new CIPA initiative until this much broader inquiry
is concluded.
Comments to both of these
new FCC dockets are not due until sixty days after publication in the Federal Register. Reply comments will be due thirty days
thereafter.
E-Rate
Updates and Reminders
Key October
Filing Deadlines:
The deadline
for filing invoices with USAC for discounts on recurring services received
during the 2008-2009 fiscal year is this Wednesday. The October 28th invoice
deadline applies to both applicant BEARs (Form 472s) and service provider SPIs
(Form 474s). Applicants must allow
enough time for their service provider(s) to review and acknowledge their BEARs
before the deadline. The SLD
recommends that applicants having trouble completing their BEARs on time file
Invoice Deadline Extensions Requests now.
The deadline
for filing a Form 486 (containing the necessary certifications on technology
plan approval and CIPA compliance) is the later of 120 days from either the
funding date or the start of services. The Form 486 filing deadline for FY 2009
funding awarded in waves 1-10 (with a service start date of July 1, 2009) is
this Thursday, October 29, 2009.
November deadlines for later waves are as
follows:
Wave 11
11/04/2009
Wave 12
11/11/2009
Wave 13
11/18/2009
Wave 14
11/25/2009
Fall E-Rate
Training:
The last of the eight SLD
2009 training sessions was held last week in Houston.
Copies of the SLD’s 2009 Training Slides are available on the SLD’s Web
site (see http://usac.org/sl/about/training-presentations/training-presentations-archive/training-2009/fall/materials.aspx).
Schools and
Libraries News Brief dated October 23rd — Equipment
Transfers
http://www.universalservice.org/sl/tools/news-briefs/preview.aspx?id=262
The SLD News Brief for
October 23, 2009, reviews the rules on equipment transfers.
General
Equipment Transfer Rules:
As a general rule,
equipment purchased with E-rate funding “cannot be sold, resold, or transferred
for money or any other thing of value.”
There are two exceptions.
- After three years from
the date of purchase, the equipment may be transferred to another eligible
entity.
- Equipment can be
transferred in less than three years if, and only if: (a) the school or
library in which it was installed is closed; and (b) the applicant notifies
USAC of the transfer.
In the case of any
transfer, the following points should be noted:
- Record retention is
critical. Inventory or asset
records for both the original entity and the new entity must reflect the
equipment transferred.
- The entity to which the
equipment is transferred need not have a discount rate at or above the
Priority 2 funding threshold for that year.
- For Two-in-Five Rule
purposes, only the original entity is charged with having used a year’s
eligibility.
Disposal of
Equipment:
Although FCC rules have
long permitted excess equipment to be traded-in against newer E-rate eligible
equipment (thus lowering the net cost for E-rate funding purposes), there were
never any formal rules permitting outright disposal of obsolete equipment. USAC had informally indicated that
equipment disposal was allowable, but this News Brief is the first time we have
seen this advice in print.
Specifically, the News brief states:
You can
dispose of outdated equipment or equipment that is no longer being used. We
suggest that you do so in an environmentally responsible way.
However, remember that – even though the equipment may be considered
salvage – you cannot accept money or any other thing of value for that
equipment.
Warning: While this is welcome news from an
E-rate perspective, applicants should note that state laws may require public
schools to auction off outdated or excess equipment. Should such equipment have any residual
value, compliance with state disposal laws might be prohibited by the E-rate
regulation that such equipment cannot be transferred (or disposed of) for
anything of value.
In September 2006, E-Rate
Central submitted an FCC petition for the clarification or waiver of rules
concerning the disposal of equipment purchased with E-rate funds (see
http://fjallfoss.fcc.gov/ecfs2/document/view?id=6518462708). The petition proposed procedures for
dealing with the disposal of equipment having some residual value. Although the FCC formally requested and
received favorable comments on E-Rate Central’s petition, no further action has
been taken.
---------------------------------------------------------------------------------------------------------------------------------
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.
