News of the Week

Funding Status

The FY 2012 Form 471 application filing window opened on January 9, 2012, and will close at 11:59 pm EDT on Tuesday, March 20, 2012.

Wave 32 for FY 2011 will be released on Tuesday, January 31st, for $70 million.  Cumulative funding for FY 2011 will be $1.66 billion.  Priority 2 funding for FY 2011 is currently being provided only at the 90% level.

Wave 84 for FY 2010 will be released on Wednesday, February 1st.  Cumulative funding for FY 2010 is $2.95 billion.  Priority 2 funding is being provided at all discount levels.

E-Rate Updates and Reminders

Digital Learning Day:

Although only tangentially related to E-rate, school applicants may be interested to learn that February 1st has been designated Digital Learning Day.  The highlight of the day will be a "National Town Hall" meeting in Washington, DC, featuring Arne Duncan, Secretary of the U.S. Department of Education, and Julius Genachowski, Chairman of the Federal Communications Commission.  The meeting "…will feature live interaction with school sites around the country, profile great teachers who effectively use technology to deliver instruction, and focus on successful education innovation projects that demonstrate how technology can be used in the classroom to improve student outcomes."  Participation is available via the Internet.

Non-Recurring Services Invoice Deadline:

The deadline for submitting SPI or BEAR invoices for non-recurring services is today, Monday, January 30, 2012 (i.e., 120 days, plus the weekend, after September 30, 2011, which was the last day to receive services).  Specifically, this deadline applies to FRNs for non-recurring (e.g.,  installation) services for either:

• FY 2010, unless the normal service delivery deadline has been extended (typically until September 30, 2012).
• Earlier funding years for which the service delivery deadline had been extended until September 30, 2011.

FCC Invoice Deadline Waivers:

An applicant or service provider missing an invoice deadline may still submit invoices for payment, but only if their request for an invoice deadline extension is approved.  USAC is normally fairly flexible about granting extensions if requests are filed within 120 days of the original deadline, but becomes progressively tougher thereafter.

In an appeal decision (DA 12-84) released last week, the FCC granted six requests for reconsideration of USAC denials of invoices or invoice extension requests.  The FCC decision, while consistent with past precedent, was interesting in several respects, namely:

1. The FCC indicated that "good cause exists to justify a grant" of the requests, but the decision included no particular discussion of a "good cause."  This suggests that the FCC may be quite flexible in granting invoice deadline relief — in one case for an applicant who filed a 2011 appeal with regard to a FY 2000 invoice — for applicants willing to go to the trouble of filing an FCC appeal.
2. The FCC moved quite quickly on most of these appeals.  Five of the six had just been filed in November/December 2011 (the sixth was dated August 2009).
3. One of the appellants, who had missed the FY 2010 invoice deadline by only a few days, probably could have avoided an FCC appeal altogether by filing a simpler invoice deadline extension request with USAC.

Schools and Libraries News Brief Dated January 27 – Operational SPIN Changes

Last week's SLD News Brief for January 27, 2012, provides guidance on Operational SPIN changes.
It is important to note that there are two types of SPIN changes, Operational and Corrective.  In particular:

1. Some service providers have multiple SPINs, often associated with different divisions or as a result of a merger or acquisition.  To align with vendor invoices, applicants funded under one SPIN may need to change to another.  As long as there is no real change of service provider, this requires a simple Corrective SPIN change.
2. To actually switch E-rate funding from one service provider to another, on the other hand, requires an Operational SPIN change.  This also used to be a fairly easy process, but new FCC rules have greatly reduced applicant flexibility to change suppliers.  As of FY 2011, the additional criteria for the approval of an Operational SPIN change are that:
   1. There is a legitimate reason to change providers (e.g., breach of contract or that the original provider is unable to deliver the requested service or product); and
   2. The newly selected service provider received the next highest point value in the original bid evaluation.  (If the applicant did not receive multiple bids, a statement to that effect must be submitted.)

Most specifically, changing service providers because the services are available at a lower cost from another provider or because you now wish to do business with a provider that did not originally participate in the competitive bidding process are not considered legitimate reasons for change, and requests citing such reasons will be denied.

We have not yet seen enough Operational SPIN changes requested on FY 2011 funding to determine what procedures USAC has developed to review such requests, but applicants should assume that the standards for making changes will be much tougher — and that applicants will have to be much more careful in making their initial procurement decisions.

Applicants seeking Operational SPIN changes should also review the latest News Brief for information on:

1. The timing for requesting Operational SPIN changes.
2. The treatment of multi-year contracts.
3. Related service substitutions (if needed).
4. Detailed information required in an Operational SPIN change request.