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June 23, 2003

Introduction

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. To learn more about our services, please contact us by phone (516) 801-7804 or by e-mail. Additional E-rate information is located on the E-Rate Central Web site.

Wave 30 for FY 2002; Wave 6 for FY 2003

Wave 30, the last regular funding wave for FY 2002, was released on Friday, June 27. Total funding in this wave was $23 million on 23 applications. The wave also included a number of denial letters notifying affected applicants that Internal Connection requests at the 80% discount level would not be funded this year. Total cumulative funding for FY 2002 now stands at $2.2 billion pending resolution of applications still under review or on appeal.

Wave 6 for FY 2003 is scheduled for release on Monday, June 30. Funding in this wave is over $270 million on over 3,115 applications. This brings total FY 2003 funding to $654 million.

Wave 6 is significant in two respects.

(1) By releasing a wave one week earlier than normal, the SLD was able to meet its goal of issuing at least 80% of the total funding decision letters (although only 25-30% of the total dollar funding awards) it expects to issue for the entire year by the start of the actual funding year on July 1.

(2) As of this wave, the SLD has begun funding Internal Connection requests at the 90% discount level. This is the first time that any Priority 2 funding has been committed by July 1.

The SLD is to be complimented on FY 2003 funding progress. Its success in processing applications by July 1, despite having postponed the close of window until early February, bodes well for a similar February closing for FY 2004 applications.

Supreme Court Upholds Filtering Requirement for Libraries

By a 6 to 3 vote, the U.S. Supreme Court upheld the Internet filtering provisions of the Children’s Internet Protection Act (“CIPA”) as applied to libraries. The action reversed an earlier federal District Court decision that had exempted libraries from filtering. The earlier decision, based on suits brought by the American Library Association and the American Civil Liberties Union, argued that filtering was in violation of the First Amendment primarily because filters indiscriminately blocked constitutionally protected information.

The Supreme Court disagreed, arguing instead that:

(1) Although libraries “seek to provide a wide array of information, their goal has never been ‘universal coverage.’” “Internet access is neither a ‘traditional’ nor a ‘designated’ public forum.” “Especially because public libraries have traditionally excluded pornographic material from their other collections, Congress could reasonably impose a parallel limitation on its Internet assistance programs. As the use of filtering software helps carry out these programs, it is permissible…”

(2) “Concerns over filtering software’s tendency to erroneously ‘overblock’ access to constitutionally protected speech…are dispelled by the ease with which patrons may have filtering software disabled.” Given that adult users’ access to material is not “burdened to any significant degree, the statute is not unconstitutional….”

(3) “Congress has wide latitude to attach conditions to the receipt of federal assistance to further its policy objectives….” “Given the comparatively small burden imposed upon library patrons seeking legitimate Internet materials, it cannot be said that any speech-related harm that the statute may cause is disproportionate when considered in relationship to the statute’s legitimate objectives.”

One interesting aspect of the decision, that may affect all E-rate applicants, is an underlying premise expressed by two Justices that an adult can simply ask a librarian to “please disable the filter” and need not offer any reason for the request. This view appears to rely on a less restrictive condition for disabling filters that was previously expressed in terms of “bona fide research.”

The SLD has not yet posted new CIPA guidance for libraries, and is unlikely do so with any degree of specificity without a FCC decision. In the absence of such information, here are our predictions:

(1) CIPA filtering requirements are unlikely to be applied to FY 2003 funding since libraries have already begun to file FY 2003 Form 486s certifying compliance with only the Internet policy requirements of CIPA. Even if the SLD started tomorrow, a revised Form 486 would not be available for some time. We cannot envision a requirement for re-certification of filtering or the application of a different certification requirement on subsequently filed FY 2003 Form 486s.

(2) Assuming a FCC decision later this summer or fall, we would expect that libraries will be subject to full CIPA compliance in FY 2004 (not that they will simply have to certify that they are “undertaking action” to install filters by FY 2005).

We recognize that many libraries are philosophically opposed to this decision and that some have already expressed intentions to forego E-rate funding for Internet Access and Internal Connections. We urge careful consideration of such action. Because the FCC has not established specific filtering standards, the practical reality is that filtering need not be either highly intrusive or expensive. If libraries plan to apply for E-rate on their telecommunications services anyway (which are not subject to CIPA compliance), we would hate to see them pass up valuable funding for other E-rate eligible services.

SLD Web Site Updates

Several changes have been made to the SLD Web site that are worth reviewing (see notice of new changes ).

(1) First and foremost, the entire site was recently redesigned to provide easier links in columns to the left- and right-hand sides of the home page. Note that the Reference Section can now be found as the first Quick Link on the right. The BEAR/SPIN Search, which used to be accessed through the Reference Section, can now be found as one of the Tools on the left.

(2) The valuable Data Retrieval Tool (listed as “Data Requests” under the Tools links) was updated this week to provide wave numbers as both a data field and a search criterion. This will make the DRT easier to use when analyzing specific funding waves.

(3) Also new this week is an updated Reference Section Guidance on SPIN changes and State Replacement Contracts (that also require SPIN changes). SPIN change request letters now require information on monthly charges for services provided by both the original and the new service providers, and on effective dates for each, in situations in which the original vendor provided any services under that year’s FRN. The revised section on State Replacement Contracts lists the information that must be provided once the new contract is in place (including the state’s 15-digit Form 470 on which the new contract was based), and describes the process for requesting a SPIN change to the new contract’s vendor by marking up, and submitting, the applicant’s FCDL letter.