News of the Week

Wave 4 for FY 2015 will be released on Friday, June 12th. Funding for FY 2015 is available for both Category 1 and Category 2 at all discount levels. Cumulative funding for FY 2015 through Wave 3 is $267 million. This amount is significantly below the $868 million that had been issued for FY 2014 by this time last year. The three most likely reasons for the slower pace are:

1. The extension of the FY 2015 application filing deadline to April 16, 2015 (compared with last year’s March 26th deadline);
2. An apparent early-wave funding focus on Category 2 requests, designed to maximize applicant opportunities for equipment installations later this summer, seemingly combined with an offsetting lack of emphasis on larger Category 1 consortium funding; and
3. Disparate levels of PIA review, often involving an excruciating level of review on Category 1 requests and, at least initially (although this appears to be changing), no or relatively cursory attention to details of Category 2 requests.

Wave 56 for FY 2014 will be released on Wednesday, June 10th. 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 $2.21 billion.

The simple FY 2014 versus FY 2015 comparison noted above relies on funding data available on the USAC website. USAC provides two basic sources of funding data, the Data Retrieval Tool (“DRT”) and the Funding Commitment Tool. Both require some explanation for proper use.

Data Retrieval Tool (“DRT”):

The DRT is the best source of accurate funding data. It is updated daily, including new funding data as of the release date of each funding wave. The DRT contains data on all applications — funded, not funded, and pending — back to FY 1998. It contains data on funding requests, commitments, and disbursements. The biggest drawback to the DRT is that the data is available only in spreadsheet formats requiring separate searches by funding year or by state, BEN, or SPIN. DRT data is also spread out into separate files over 56 “states” (including Washington DC and US territories) and 17 funding years — currently a total of 952 files.

Except for a few days at the end of the application window (to reduce demand on the USAC system), E-Rate Central downloads all these files after each business day to create an integrated funding database. Easy access to state and applicant data, providing 17 years of data in an easy to read format (with drill-down capability to the FRN level) is available using the Funding Quick Search Tool available through the State Information section of our website

The Form 471 for FY 2015 has a number of additional fields containing Item 21 and other information that is not available in the DRT. Access to this additional FY 2015 data is available, albeit with some difficulty, using USAC’s Download Form 471 Information tool. The extra data is presented in seven separate tables on a state-by-state basis. Its use for the average applicant is limited.

Funding Commitment Tool:

The primary use of the Commitment tool is to review funding wave approvals by state. The tool has been approved for general use this year, but still needs to be used with care. Indeed, the tool displays a warning reading, in part: “It is not intended to be used to aggregate data at the state, regional or national levels, as it will overstate those totals.”  This is only partially accurate; in some cases it may now understate funding.

In past years, the Commitment tool data was apparently based on funding reported to members of Congress on a district-by-district basis. Since some Congressional district and applicant (school district or library system) geographic boundaries overlap, some funding reports were duplicated. Because of the duplication, the tool could significantly overstate total funding on a funding year, wave, state, or even applicant basis.

As of 2015, USAC has eliminated most of the duplication in the tool (for both FY 2015 and earlier years). However, there are still bugs — including one apparent over-correction. Based on our analysis, here’s a more detailed warning:

1. On a total funding year basis, the tool provides a National Summary, a National Analysis by Applicant Type, and a National Analysis by Service and Discount Band. These totals are clearly overstated. Total FY 2015 funding as of Wave 3, for example, is shown in the tool’s summary as $372 million. Actual funding, as reflected in the DRT and as reported in USAC’s most recent News Brief, is $267 million. The difference may reflect the duplicate Congressional reporting or other factors — and may, or may not, be considered an error that needs to be corrected. We consider the tool’s national totals to be unusable at present.
2. Individual wave totals, and the state components of these waves, are closer to the actual funding — but are actually slightly lower. In this case, again as of Wave 3 for FY 2015, the funding shown for the three waves adds up to $266 million, not the actual $267 million. As best we can determine, this difference reflects a bug in the individual applicant wave information reporting system that deletes certain FRNs if, within a given application and service type, there are duplicate amounts. For example, if an application included three approved FRNs for the same Category 2 equipment, one for each of three schools, the Commitment’s tool would show only one approved FRN for that amount. Given that this situation doesn’t arise often, it is enough to be noticeable in the wave totals (and certainly at the applicant funding level). We expect that this bug will be corrected.

FCC Appeal Decision Watch:

The FCC issued another set of precedent-based decisions in Public Notice (DA 15-648), including:

1. Dismissed as moot one request for review; USAC had already rescinded the subject COMAD letters.
2. Dismissed one petition for reconsideration on the basis that no additional information or arguments had been provided.
3. Dismissed without prejudice one request for waiver of a Form 486 deadline. The dismissal was a bit of a technicality under the FCC’s E-rate 2.0 rules requiring appeals to be submitted first to USAC. In this case, the FCC apparently decided that the Form 486 deadline is a USAC procedure, not a rule, thus not the proper subject of an FCC waiver request. As a result, the FCC decided that the applicant’s correct first step should have been to appeal the Form 486 deadline to USAC. Our guess is that this case will find its way back to the FCC, this time as an appeal, not a waiver — another triumph for E-rate simplification!
4. Granted requests for review or waivers for:
   1. Multiple applications for six applicants seeking reconsideration of funding denials following the removal of ineligible services.
   2. One applicant whose services had been deemed ineligible based on a misleading PIA response.
   3. Two applicants requiring additional time to respond to PIA requests, including discount calculation documentation.
   4. One applicant for a late-filed service implementation deadline extension request (for funding as far back as FY 2002).
   5. Twenty-seven applicants for late-filed Form 471 applications (within 14 days of the window deadline).
   6. One applicant demonstrating the proper delivery of equipment within the funding year.
5. Denied requests for review or waivers for:
   1. One applicant deemed to be an ineligible school (a residential church facility used for classes, but apparently not considered a school by the state). The FCC’s footnote in this case indicates that even the frequent use of “locations for small-group instruction does not establish that [those entities] are part of eligible schools.”
   2. One applicant seeking to reinstate previously canceled funding.
   3. Three applicants for late-filed Form 471 applications (more than 14 days after the window deadline).
   4. One applicant relying on a Form 470 not seeking bids for the types of E-rate services later requested.
   5. Five applicants for untimely filed requests for waivers or review.

USAC Spring Service Provider Training Material:

The first of USAC’s spring training sessions for service providers was held last week in Phoenix. The second and final spring session will be held next week in Tampa on Tuesday, June 16th.

Copies of the slides used in last week’s session are available on the USAC website. The two most important presentations for applicants are:

• Eligible Services — an update of the eligible services presentation from last fall’s USAC training session, including an overview of the draft Eligible Services List for FY 2016.
• Fiber Options — a new presentation covering changes, largely beginning in FY 2016, to the E-rate rules for Category 1 fiber connectivity adopted by the FCC in last December’s E-Rate 2.1 Order (FCC 14-189).

For additional information on new fiber systems, the FCC has posted an online recording of its May 20th E-Rate Fiber Build Workshop.

Early Filing of Form 470s for FY 2016:

One specific issue raised in USAC’s Fiber Options presentation — important for a limited number of applicants this month — was the stated requirement that “applicants seeking dark fiber or self-construction must upload an RFP in the new FCC Form 470 system” (see slide #16). The new Form 470 system is expected to be a part of the new online applicant portal to be introduced by USAC next month.

Applicants with longer procurement cycles, needing to file a Form 470 for FY 2016 before the new system is in place, will have to use the existing online Form 470 system that defaults to “FY 2015.”  Traditionally, USAC has advised applicants using the previous year’s Form 470 to include a note such as “This Form 470 is for FY 2016” in Item 13 following the instruction reading: “If you are requesting services for a funding year for which an FCC Form 470 cannot yet be filed online, include that information here.”

USAC Fall Applicant Training:

As in recent years, USAC will hold eight regional one-day applicant training sessions this fall. Registration is now open and attendance is building rapidly. The full training schedule with registration links is as follows:

The S&L News Brief of June 5, 2015, provides the following tips for applicants to make sure that their application reviews are not delayed over the summer:

1. Monitor the contact information provided on program forms and requests.
2. Respond to any PIA review questions.
3. Respond to any Problem Resolution questions involving paper form.
4. Submit your Form 472s (BEAR forms) for services already received in FY 2014.
5. Label and store program-related documents.
6. Subscribe to the S&L News Brief from a personal email account.

As discussed in the S&L News Brief of May 22, 2015, PIA is now operating under its summer contact rules. If PIA cannot contact an applicant, review of the associated application(s) will be deferred until at least the Friday after Labor Day (September 11th). As PIA begins the review of new applications during the summer, reviewers reach out to applicants to determine summer availability. Once contact is confirmed, PIA will expect the review to proceed as scheduled. An applicant available for only part of the summer should proactively make their schedule clearly known to PIA so that the application can be put on summer deferral during their absence.