News of the Week

Funding Status: FY2 - FY5

The SLD is currently in the midst of a short funding hiatus between the last major funding wave for this year (FY4) and the first funding wave for next year (FY5). This situation is about to change. Before the end of April, we expect to see:

• The release of a number of funding commitments based on previously approved SLD appeals for FY2 and FY3
• An additional funding "ripple" (also designated Wave 15a) for FY4
• Most importantly, the first funding wave for FY5. Because the SLD has been reviewing FY5 applications for several months, awaiting formal FCC authority on next year's funding level, we expect Wave 1 to be relatively large. Most likely, it will only deal with applications requesting discounts on Priority One services (telecommunications and Internet access).

NPRM Comments: Preliminary Observations

The FCC has received over 130 comments to its Notice of Proposed Rule Making on the E-rate program and will accept additional reply comments through May 6. Although we have not read all these comments, a few common points of view seem to be emerging.

Here are a few preliminary observations:

1. There is broad support for making mobile telephone service eligible for all school and library personnel.
2. There is strong support for making voice mail service eligible.
3. Many problems are seen in the development of a computerized list of eligible services. While applicants would clearly like access to the same eligibility list provided to SLD reviewers, there is little support for linking a computerized list with the actual online application process.
4. The SLD's current policy of rejecting FRNs that include more than 30% ineligible charges is seen as a reasonable balance of fairness and administrative efficiency.
5. While supportive of the provisions Americans with Disabilities Act, most applicants, and vendors, do not believe E-rate certifications of compliance are needed or appropriate.
6. Applicants support a rule that would require all vendors to offer discounted billing. Telecom carriers - presumably those not now offering discounted bills - are opposed to such a rule.
7. Many of the comments support placing some limits on the transferability of E-rate funded equipment and/or on the frequency of internal connection funding for the same applicants.
8. Applicants overwhelmingly support the rollover of unused program funds from one year to another. Many of the carriers argue that unused funds should be used to reduce their contributions.
9. There is broad support for extending the appeal window to 60 days on a permanent basis. (It was recently extended to 60 days, but only on a temporary basis.)
10. There is little support for a FCC suggestion that audits be conducted at applicant expense.
11. Many applicants complained about the complexity of the program and the large number of applications that have been denied as a result of simple procedural or clerical errors. Several applicants suggested that the SLD treat applicants as customers rather than as adversaries.

Applicant and vendor opinions are interesting and, particularly when they agree, persuasive. Ultimately, however, it is the FCC Commissioners' opinions that matter. It may be some time until the FCC rules. FCC staff will be reading and summarizing all comments and reply comments, formulating positions, and presenting proposed rule changes to the Commissioners. Although the FCC could initiate changes on some issues faster than on others, we do not expect FCC action until this fall at the earliest. Since the FCC has historically been reluctant to make substantial program changes once the Form 470/471 application window has opened, we do not expect that any major program changes will be made in time to substantially effect FY6 policies.

To find the list of comments, use the Search for Filed Comments function on the FCC Web site, and enter the docket number "02-6" in the upper left-hand corner of the search box.