News of the Week

USAC announced it will release Wave 1 Funding Commitment Decision Letters (FCDLs) for FY 2015 on Thursday, May 21, 2015. The date of the first wave is one week later than last year, but much sooner after the close of the window (which had been extended three weeks this year). It is, however, a much smaller wave comprised of approximately 7,000 FCDLs (about 50% of last year’s Wave 1) for over $150 million (about 25% of last year’s Wave 1). Funding in Wave 1 includes both Category 1 (probably over 90% of the Wave) and Category 2 at all discount levels.

When the FCDLs are received, applicants may begin to file their Form 486s. USAC has updated the online Form 486 for FY 2015; it will be available for online filing starting Thursday, May 21 (see “E-RateUpdates and Reminders” section below).

Wave 54 for FY 2014 will be released on Wednesday, May 20th. Funding for FY 2014 is available for Priority 1 services only. Priority 2 funding has been denied at all discount levels. Cumulative funding for FY 2014 is $2.20 billion.

Form 471 Certification Deadline:

As announced in the S&L News Brief of May 1, 2015, USAC mailed out almost 2,790 warning letters two weeks ago to applicants who had filed timely Form 471s online for FY 2015, but who — according to USAC records — had not yet certified those applications. The list of those who were sent these “Notification of Form 471 with No Certification” letters was apparently compiled at least several days before the mailing and before USAC had finished recording all of the paper certifications it had already received.

Applicants who have already submitted their Form 471 certifications and received these notification letters, should do the following:

1. Check the current Application Status on the SLD website. A properly certified Form 471 should be labeled “Certified – In Window” or better (maybe already in “Initial Review”).
2. If the status indicates only “Complete,” call the Client Service Bureau (888-203-8100) to confirm USAC’s receipt of the certification.
3. If in doubt, resubmit the certification.

Those who have not yet submitted their certifications should do so now. Certifications must be filed on or before May 26, 2015.

Early Filing of Form 486s:

USAC has already updated its online Form 486 for FY 2015. Once Wave 1 is released later this week, funded applicants will be able to begin filing their associated Form 486s to confirm receipt of services (and CIPA compliance, if required). Form 486 Notification Letters should start going out soon after the first forms are filed.

A paper type-in version of the Form 486 is available in the E-Rate Central Forms Rack.

Applicants can file Form 486s early, before services have started, if: (a) they have received a Funding Commitment Decision Letter with approved funding; (b) their services will begin in July; and (c) they can accurately make all of the certifications required on the form. To file a Form 486 before July 1st, use the checkbox in Item 6a.

FCC Fiber Build Workshop:

The FCC is conducting a workshop on Wednesday, May 20th, to discuss E-rate funded fiber build projects. The workshop will be held at the FCC in Washington, DC, and will be webcasted. The four key agenda topics are:

• Overview of the new E-rate fiber construction rules
• Statewide and regional case studies
• School district and local case studies
• Fiber planning tools

FCC Appeal Decision Watch:

The FCC issued two E-rate decisions last week involving late filed forms. In one decision (DA 15-570), the FCC denied requests for review and/or waivers of Form 472 invoice deadlines for four applicants covering FY 2000 through FY 2010. In all cases, the FCC decided that “…the petitioners waited an unreasonable amount of time after the last date to invoice to seek an invoicing deadline extension and have failed to present extraordinary circumstances that would justify the failure to timely submit the invoices.”  The decision is a further indication that the FCC is serious about enforcing the invoicing provision of its new E-Rate 2.0 rules permitting one deadline extension, and placing a strong burden of proof on applicants to support any additional extensions.

In a second decision (DA 15-571), the FCC dismissed an applicant’s request for relief of a Form 486 deadline on the basis that an appeal of the deadline should have first gone to USAC. Again, this decision is in line with a new E-Rate 2.0 rule requiring all E-rate appeals to be filed first with USAC. Interestingly, the decision suggested that the applicant could have requested a waiver of the administrative deadline directly from the FCC.

In two other actions (DA 15-536 and DA 15-537), the FCC assessed significant fines and entered into Consent Decrees with Sprint and Verizon Wireless to resolve allegations that both parties had engaged in “cramming” — a practice involving charging customers for unauthorized third-party services. These particular cases both involved monthly charges from Premium Short Message Services (“PSMS”) ranging from $0.99 to $14.00 as subscription fees for ringtones, wallpapers, and text messages. Although not directly related to E-rate, two aspects may be of interest, namely:

1. The Consent Decrees included a number of provisions that we’ve seen incorporated in E-rate compliance agreements with certain E-rate applicants or service providers, including:
   1. Designation of an internal Compliance Officer
   2. Implementation of a compliance plan
   3. Employee training
   4. Reporting and recordkeeping requirements
2. A total of $120 million of the assessed fines will be used in a “consumer redress program” to refund unauthorized PSMS charges. To the extent that an E-rate applicant receives a material refund for PSMS services on which E-rate discounts were received — most likely in error — repayment of the discounted portion to USAC is advised.

USAC Fall Applicant Training:

USAC announced the dates and locations of its fall E-rate applicant workshops last week. As in recent years, there will be eight regional one-day training sessions beginning Friday, October 2nd in Washington, DC. Registration is now open and attendance is building quickly. The full training schedule with registration links is as follows:

The S&L News Brief of May 15, 2015, reviews two topics discussed above: (a) the May 26th Form 471 certification deadline; and (b), use of the Form 486. Note that the Form 486 section of the News Brief mentions, if only for completeness, that one use of the form is to certify compliance with the technology plan requirements, if required. As indicated, technology plans are no longer required for E-rate purposes (and, effectively, have not been required since FY 2012, the last time Priority 2 was funded at any discount level).

The Form 479 is a special purpose form used by consortium members to certify CIPA compliance to the consortium leader who, in turn, can file a Form 486 certifying, in part, compliance on behalf of the entire consortium. As such, member Form 479s are filed with the consortium lead — not with USAC — and must be received before the consortium lead can file the Form 486. Form 479s are not required as a prerequisite for a Form 486 involving only telecommunications service(s).