| Wave 8 for FY 2003 is scheduled for release on Monday, July 28. Funding in this wave is over $38 million on over 415 applications. This brings total FY 2003 funding to $746 million.
The SLD had recently announced that the threshold for Internal Connection funding would drop to 85% in Wave 8, but subsequently reversed this decision. As a result, Internal Connection funding is still being provided only for applicants at the 90% discount rate. No Internal Connection funding will be available below 70%. The availability of Internal Connection funding for applicants receiving discounts in the 70-89% range cannot yet be projected, although requests for funding in this range are currently being reviewed by the SLD.
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| Based on the recent U.S. Supreme Court decision upholding the CIPA filtering requirement for libraries, the FCC has released a new implementing Order (see FCC 03-188). The key element of the Order is that libraries, applying for Internet and/or Internal Connections discounts, “must undertake efforts in Funding Year 2003 to comply by Funding Year 2004 in order to receive e-rate funds. Libraries must be in compliance with the CIPA requirements by Funding Year 2004, except to the extent such libraries are eligible for and receive a waiver of the CIPA requirements....."
CIPA compliance means that libraries must employ Internet filtering and must have an Internet Safety Policy. The policy requirement has been in effect since FY 2002, but the filtering requirement had been stayed by a district court ruling until it was overturned by the Supreme Court decision. The new Order becomes effective on the later of the: (a) Supreme Court decision effective date; (b) publication in the Federal Register; or (c) approval of the revised Forms 486/479. For planning purposes, libraries should assume an effective date sometime in August.
The most immediate impact of the Order for many libraries is that it will require many to re-file new Form 486s on FY 2003 funding awards. Although the requirement to “undertake efforts” in FY 2003 to filter by FY 2004 does not involve a high compliance standard, the Order does require that all library applicants (except those seeking only Telecommunications services) to affirmatively certify this action. Since the current version of Form 486 (dated September 2002) requires libraries to certify only Internet Safety Policy compliance, a new version of the Form 486 (dated July 2003) is being prepared to incorporate the library filtering compliance certification.
Affected library applicants, who have already filed Form 486s for FY 2003, will be required to re-file using the new version of the Form 486. Re-filing must occur within the original 120-day deadline which, for applicants funded in Waves 1-6 and who have services starting July 1, is October 29, 2003.
Similarly, libraries that are part of consortia applying for Internet Access and/or Internal Connections, and who have already filed Form 479s for FY 2003, must resubmit new Form 479s to their consortia leaders. The deadline for resubmission is 45 days from the effective date of the Order. If some of the members of a library consortium decide not to comply with the undertaking action provision on filtering, the consortium must file a Form 500 within 30 days of filing the new Form 486 to cancel or reduce funding on Internet and/or Internal Connections services.
School applicants, who have always had to be compliant with CIPA filtering provisions, must exercise care to file the correct version of the Form 486. Once the Order becomes effective, according to draft instructions on the Form 486 Minimum Processing Standards, all applicants must use the new July 2003 version. Although the SLD may permit some grace period, once use of the new version is mandated, subsequently submitted versions of the older Form 486s (July 2001 or September 2002) will be rejected. The penalty for missing a Form 486 deadline is a reduction in funding.
The new Order raises a number of procedural questions that will require additional guidance. A more detailed notice is expected to be posted on the SLD Web site shortly.
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| Initial comments in response to the FCC’s E-rate Order and NPRM (see FCC 03-101) were due on July 21. At a minimum, the following comments are worth reviewing:
(1) The State E-rate Coordinators’ Alliance (“SECA”) and the American Library Association (“ALA”) proposed a number of measures to reduce waste, fraud, and abuse including a reduction in the maximum discount rate on Internal Connections to 70%. The rationale is to reduce funding demand, and to discourage program abuses by high discount applicants, by requiring applicants to have more “skin in the game.” This concept is also being supported by the Waste, Fraud, and Abuse Task Force (see below). SECA also recommends changes to improve administrative practices, including a more focused review effort for larger applications (see SECA comments).
(2) Comments by E-Rate Central, a member of SECA, include a summary of a study analyzing the impact of the proposed discount rate reduction for Internal Connections (see E-Rate Central comments).
(3) The Consortium for School Networking (“CoSN”) and the International Society for Technology in Education (“ISTE”) provided the best comments we’ve seen on issues dealing with government-wide debarment rules (see CoSN & ITSE comments).
Other comments can be found by using the “Search for Filed Comments” facility on the FCC Web site (see Search for Filed Comments). To use this search function, enter “02-6” in Box 1 (“Proceeding”), and click “Retrieve Document List.” Comments will be listed starting with the most recent filings. Formal replies to these comments can be filed with the FCC up until August 19.
Activities of the SLD’s Waste, Fraud, and Abuse Task Force, which are not part of the FCC’s NPRM comments, but which will result in a final report later this summer, can be found in the Task Force section of the SLD Web site. An update on the Task Force’s third meeting (held in late June) include two major recommendations, one to reduce the maximum discount on Internal Connections to 80% and another to establish at least some ceiling on the amount of funding which any one applicant can request (see Task Force Update).
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| We’ve been getting a number of questions about the Form 486 “early filing” option, and the need the check the box in Block 2, Item 6a. Generally, anyone filing a Form 486 at this time of the year does not need to check this box. Here’s why.
Form 486 is a Receipt of Service Confirmation Form. Normally, it is filed after a FCDL has been received and after services for the funding year have started. Typically, the start date for most services is July 1. The language surrounding the Item 6a box indicates that it should be checked “FOR SERVICES STARTING ON OR BEFORE JULY 31 OF THE FUNDING YEAR.” Services starting July 1 obviously meet this criterion, so it would seem logical to check the box. But, as indicated in the detailed Form 486 instructions, that’s not correct.
The real purpose of the “early filing” option is to permit an applicant, who received a FCDL before services start (e.g., in Waves 1-5 for FY 2003), to file a Form 486 immediately, without waiting for services to start – as long as services will start in July (i.e., on or before July 31). At this point in July, any funded applicant, whose services started July 1, will be filing a regular – not an “early” – Form 486. Thus, the Item 6a box need not be checked. Fortunately, for those confused by the Form’s language, incorrectly checking the box is not a fatal flaw and will not result in a Minimum Processing Standard rejection.
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