The SLD announced this week that Wave 1 of FY 2003 would be issued in the last week of April. This is a one-week offset from the funding wave schedule for FY 2002 so, for at least a while, applicants can expect to see weekly funding waves - a wave for FY 2002 one week alternating with a wave for FY 2003 the next.
If the first funding wave for FY 2003 follows the FY 2002 pattern - and we believe that the SLD's review and approval process is further along this year - we would expect that Wave 1 will encompass on the order of $200 million in approvals for 10,000 applications.
Funding in the first FY 2003 waves will be for Priority 1 (Telecommunications and Internet Access) services only. Based on preliminary estimates, released to the FCC on April 3, the total demand for Priority 1 services was $1.745 billion. This is well within the annual funding cap of $2.25 billion. The availability of funding for Priority 2 (Internal Connection) services cannot yet be determined. FY 2003 funding in subsequent waves is likely to proceed as follows:
(1) The first few waves will deal only with Priority 1 applications.
(2) Sometime in May, the SLD should be able to establish the highest discount level at which Priority 2 requests will not be funded. At this point, the SLD will begin issuing "Not Funded" decisions on Priority 2 applications with all FRNs at or below that discount threshold. The SLD will then also begin reviewing and ruling on mixed priority applications with sub-threshold discounts.
(3) By July 1, the start of the funding year, the SLD should have released funding decisions - "Funded" or "Not Funded" - on the majority of the FY 2003 applications. Last year, over 70% of the funding decisions had been made by this date, and the SLD's goal is to do even better this year.
(4) Later this summer, the SLD should be able to determine the availability of Internal Connection funding, at least at the 90% level, and begin to release decisions on Priority 2 and mixed priority applications at this discount level. Last year, the decision on 90% Internal Connection funding was made in September. This year, with lower demand for 90% Internal Connection funds, the decision may come earlier.
(5) Decisions on Internal Connection funding at discounts rates below 90% (but above the original "Not Funded" threshold) will be made at successively lower levels throughout the fall and winter.
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