News of the Week

January

• Online versions of the new Form 470 and Form 471 became available. Major changes included simplifications of the Form 470 and the inclusion of consultant identification and contact information, if applicable, on both forms.
• The Form 471 application window opened January 11th, one month later than had been the case in recent years. The delay was apparently linked to the implementation of the new forms, but a January window opening may become the norm. The closing date for the FY 2011 window was set as March 24th, again one month later.
• Under the new Form 471 filing rules, applicants were required to submit Item 21 attachments within the filing window. The FCC's Order on this requirement (DA 11-88) instructed USAC to notify applicants of missing Item 21 attachments and to provide an additional 15-day grace period.
• The SLD's Special Edition News Brief on January 27th provided additional clarification on the eligibility of basic maintenance services.

February

• Attempting to address continued applicant and service provider confusion on the eligibility of maintenance services, the SLD provided further clarification — albeit still not enough — in its News Brief of February 18th.
• The FCC deferred action on a USAC recommendation to finalize the Priority 2 threshold for FY 2010 at 81%. The FCC sought public comment on a petition filed by Funds For Learning seeking to provide funding at 80%.

March

• The SLD continued its misleading practice of sending out "Form 470 But No Form 471" letters to applicants well in advance of the close of the Form 471 application window. This year's mailings — what we consider a form of "carpet bombing" — involved over 25,600 letters.
• The FCC announced the selection of 20 applicants to participate in the $10 million EDU2011 (also called "Learning On-The-Go") wireless Internet pilot program.

April

• USAC released the preliminary demand figures for FY 2011 showing that total requests were up 10.1% from FY 2010. The demand for all Priority 1 and for Priority 2 at the 90% level was up 4.5%.
• The FCC issued an Order (FCC 11-60) to extend the deadline for making certain ministerial and clerical ("M&C") corrections to existing Form 471 applications during the PIA review process. As became obvious in later PIA actions, the FCC's Order led initially to a significantly more restrictive application correction process. Correction procedures were subsequently relaxed to some degree and may be subject to further modification still.
• USAC sent out approximately 660 reminders to applicants who had submitted Form 471s online, but who had not yet certified them. In contrast with this targeted mailing on missing certifications, USAC sent reminder letters to over 15,500 application contacts who might have not filed their Item 21 attachments — essentially to all applicants who had not filed their attachments online.

May

• USAC followed up on its new Item 21 "carpet bombing" program by sending e-mails to the signers of those applications reminding them of the May 17th Item 21 deadline.

June

• The FCC approved USAC's application review procedures permitting USAC to initiate funding waves for FY 2011.
• The FCC released the proposed Eligible Services List for FY 2012 for public comment. The ESL changes were largely clarifying in nature and generated relatively few comments and reply comments.

July

• Applicants funded for FY 2011 began filing Form 486s, and USAC began issuing Form 486 Notification Letters. Technology Plan Approval reviews, initiated at the same time, were more focused than in previous years given the revised technology plan rules for FY 2011 requiring plans only for Priority 2 services.
• The FCC released an implementation order (DA 11-1181) for the EDU2011 program which permitted USAC to begin funding the pilot applications. EDU2011 application awards were not completed until Wave 23 in November.
• USAC issued several hundred application denials for missing Item 21 attachments, many of which were later determined to have been issued in error and were subsequently reversed. By our count as of December, only 32 applicants suffered actual Item 21 denials (although others may be pending).

August

• The State E-Rate Coordinators' Alliance ("SECA") filed two important sets of comments with the FCC, one addressing "black holes" and COMADS and another recommending improvements to E-rate rules, forms, and procedures.
• USAC formally requested additional guidance from the FCC on a number of gift rule issues. Informal guidance on some of these issues was apparently provided by the FCC and was reflected in the SLD's fall training workshops.
• The FCC released an Order (FCC 11-125) updating the CIPA rules. The major change was a requirement, effective for FY 2012, that applicant Internet Safety Policies "…include monitoring the online activities of minors and must provide for educating minors about appropriate online behavior, including interacting with other individuals on social networking websites and in chat rooms and cyberbullying awareness and response."
• The FCC approved $850 million in roll-over funds for FY 2011 and, in a surprising break with tradition, authorized USAC to commit additional funds for FY 2010 sufficient to fund Priority 2 requests at alldiscount levels — including those previously denied at 79% and below.

September

• The SLD began its annual fall applicant training workshops in eight cities nationwide.

October

• The FCC released the final version of the FY 2012 Eligible Services List.
• The FCC approved the creation of the new Connect America Fund ("CAF") to gradually replace the existing High Cost program of the Universal Service Fund. This Order shifts high cost support from voice telephone to broadband services. Although the CAF Order does not directly affect E-rate, it should support lower broadband costs and enhance availability for users in rural areas. Subsequent to the CAF Order, Funds For Learning initiated a petition drive to encourage the FCC to divert some of the CAF funding to the E-rate program (an action we see as unlikely).

November

• The Form 471 application window was set to run from January 9 to March 20, 2012.

December

• New instructions were released for the Form 486 and the Form 479 encompassing the new CIPA requirements. The FCC had previously determined that the forms themselves, which certify CIPA compliance, did not have to be updated.
• The FY 2012 Omnibus Appropriations Act included a two-year exemption for the E-rate program from the Antideficiency Act ("ADA").