News of the Week

The FY 2014 application window will close this Wednesday, March 26, 2014 at 11:59 p.m. EDT. The SLD’s Client Service Bureau will be open for extended hours until the deadline (see the SLD News Brief referenced below).

Wave 44 for FY 2013 will be released on Wednesday, March 26, 2014. Funding for FY 2013 is available for Priority 1 services only. Priority 2 is being denied at all discount levels. Cumulative funding for FY 2013 is $1.98 billion.

Wave 81 for FY 2012 will be released on Thursday, March 27, 2014. Priority 2 funding is being provided at the 90% discount level only. Cumulative funding for FY 2012 is $2.87 billion.

Warning:  The deadline for filing Form 471 applications for FY 2014, the next funding year, is Wednesday, March 26, at 11:59 p.m. EDT. Applications completed online or postmarked after this time and date will be treated as being received outside the filing window and will not be funded (without a successful FCC appeal).

For the inevitable applicants who are going to wait until Wednesday to submit their Form 471s, we offer the following suggestions:

1. For online filers. Historically, the online filing system has become overloaded during the last day or two. If last-minute problems are experienced with the SLD’s online data entry system, it is important to document that the filing had been in process when the problems developed. In particular:
   • We suggest periodic screen printouts — particularly of the screen that appears early in the filing process displaying the Form 471 number and security code. It is also important to call the SLD’s help line (888-203-8100) to report problems. The help line typically remains open one-half hour past the 11:59 p.m. EDT deadline. If you call with a filing problem, make sure you retain the assigned Case Number.
   • To avoid problems from the outset, be sure to use Internet Explorer, not an alternative browser. It also pays to clear out all cookies. The SLD’s latest guidance for avoiding or dealing with a variety of possible online filing problems is available at Online Troubleshooting.
2. Remember that all Form 471s should also be certified by the deadline. If the application is not certified online using a PIN, the certification must be printed out, signed and dated, and mailed by the deadline. If the application is submitted online and on time, but not certified, the SLD will provide a reminder and a second chance to do so. If at all possible, please do not rely on this second chance as it will significantly delay application review.
3. Remember also that the E-rate rules require Item 21 attachments to be filed by the close of the window. Item 21 attachments may be submitted online as a part of the online Form 471 process, or by e-mail, fax, or mail. Again, we expect the SLD to provide a reminder and second chance, but encourage applicants not to count on it.
4. When mailing a paper Form 471, Item 21 attachments, and/or a certification to the SLD, we recommend that the postmark date be documented. If using an express mailing service (e.g., FedEx), the electronic pickup date in the tracking system serves as the “postmark.”  Make sure you know the time of the latest express mail pickup in your area.
   
   If using the U.S. Postal Service, similar advice applies. Use certified mail and make sure the certification is time-stamped before the 11:59 p.m. EDT deadline. Some post offices have earlier closing times than others. Check the USPS Web site to find the nearest offices and to check their business hours.
5. Any Form 470 referenced in a Form 471 must also be signed and certified to be valid. Applicants who filed a Form 470 online a month or two ago, but who did not electronically certify it online, should make sure that their paper certification pages have been submitted.
   
   The easiest way to confirm that a specific Form 470 has been certified is to use the Form 470 Search Posted feature on the SLD Web site. The first section of a posted Form 470 should show a Certification Received Date. If this field is blank, and you just mailed the certification, make sure that you can document the postmark date. If you mailed the certification a while ago, and the field is still blank, we suggest resubmitting it.

Late filers should also read the “Questions and Answers for Last-Minute Filers” section of the SLD News Brief referenced below.

For many applicants, one of the critical aspects in the FCC’s current proceeding to modernize the E-rate program is the proposal to eliminate or phase-out the eligibility of voice and other “legacy” services. The actual Public Notice (DA 14-308), released earlier this month, only hints at the extent of the legacy services being considered for elimination.
In an important speech at the Council of Chief State School Officers Legislative Conference, last week, FCC Chairman Tom Wheeler was much more explicit, at least with respect to his own views. Referencing an estimate of $600 million in E-rate funding now spent “on outdated services,” the Chairman essentially put everything but broadband services and equipment on the table by stating:

Let’s start with the low-hanging fruit in that expenditure. Narrowband pagers may have fit into a plan 18 years ago, but we need to question their role in a broadband future. Similarly, legacy PBX systems are an historic relic.

Then there is a collection of supported activities that fall into the “nice to have” category, but certainly are not “must have” if our priority is broadband deployment.
Mobile phones are now ubiquitous in our nation. E-Rate support does not mean the difference between teachers having mobile phones and not having them. But we spend over $175 million a year of E-Rate funds to pay for mobile phones. Similarly, we spend over $260 million annually on services including email, text messaging, slow speed connectivity, domain name registration, Web hosting and 800 number services.

I have no doubt that the schools and libraries make use of these capabilities, but are they more important than paying for high-speed connectivity to the facility and WiFi access throughout?

The Chairman also engendered a number of news articles and blog postings, many with a Star Wars theme, by indicating that he “…will soon be announcing a special strike force for the entire Universal Service Fund (of which E-Rate is a part) to make certain there is adherence to the rules and the People’s money is wisely spent.”

In another speech before the Consortium for School Networking last week, FCC Commissioner Jessica Rosenworcel also stressed the “…need to phase out old services and make room for more high-speed broadband.”  But she also suggested the need for greater E-rate funding “…to restore what inflation has taken away from this program.”  Since E-rate’s annual funding cap has been indexed to inflation since 2011, this remark suggests a need to retroactively readjust the funding cap for inflation back to 1998. This could add another $800-900 million to the annual cap.

FCC Comment Period Deadlines:

The FCC’s Public Notice on E-rate modernization (DA 14-308) was released for public comment on March 6th in an abbreviated comment schedule (see our newsletter of March 10, 2014). Comments are due April 7th and reply comments are due April 21st.

The three most critical proposals subject to comment are:

1. To replace the current two-priority system with a new two-category system, each separately funded.
2. Within each category, to emphasize broadband funding and phase out support for voice and other “legacy” services.
3. To add an additional $2 billion in funding to be spread over FY 2015 and FY 2016.

Tangentially related to E-rate, comments are also being sought on the Report on FCC Process Reform (see Public Notice, our newsletter of February 24, 2014, and E-rate comments already filed by the State E-Rate Coordinators’ Alliance). The comment period deadline on this proceeding is March 31, 2014. There is no reply comment period.

Form 486 Deadlines:

Typically, a Form 486 must be filed no later than 120 days from FCDL issuance or the start of service, whichever is later. Assuming services started July 1, 2013, the deadlines for FY 2013 funding waves 1-27 have already passed. The Form 486 deadlines for April and the remainder of March are:

                      Wave 28                03/27/2014
                      Wave 29                04/07/2014
                      Wave 30                04/10/2014
                      Wave 31                04/17/2014
                      Wave 32                04/28/2014

FCC Appeal Decisions Watch:

The FCC issued an interesting appeal last week (DA 14-372) granting relief from a demand payment request from Sting Communications, while denying a similar request by Sting’s client, the Glendale School District. The case involved USAC’s retroactive denial of funding requests over a two-year span as the result of an alleged competitive bidding violation. The problem stemmed from a multi-year Internet contract signed in FY 2004 that was apparently rebid for FY 2005 with a Form 470 indicating that the district “intended to continue its existing multi-year service contract with Sting” — which it ultimately did. USAC determined that the Form 470 language on the rebid would have been “likely to deter other entities from making bids.”  USAC had then sought a return of funds from both parties — the applicant and the service provider. E-rate rules permit USAC to do this when it cannot easily determine who is at fault. Essentially, this leaves it up to the two parties to decide by themselves who repays how much, if any.

In this case, the FCC absolved the service provider of any blame, placing the full repayment burden on the district. It then denied the district’s appeal for relief on the basis that the district had failed to appeal within the 60-day appeal window.

The SLD News Brief for March 21, 2014 provides answers to the following questions often raised by late-filing applicants:

• Can I file Priority 1 and Priority 2 requests on the same application?
• What should I do if I have problems with the online system?
• I am using Internet Explorer as you suggested – why am I having problems?
• I am getting an error message I don’t understand. What should I do?
• I am filing as a library. Why do I have to find my library entity number twice in Block 4?
• Why do libraries enter student numbers in Block 4?
• I want to refer to the FCC Form 471 I filed last year when I file for this year. What is the best way to do this?
• How do I file an Item 21 attachment?
• My service provider has applied for a SPIN but doesn’t have it yet. How do I complete my Block 5 funding request?
• How can I correct an error I made on my online form?
• I filed on paper. Why am I getting calls about the information I provided?
• What if I am still having problems?