News of the Week

Funding Status

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

Wave 38 for FY 2011 will be released on Tuesday, March 13th.  Cumulative funding for FY 2011 is $1.89 billion.  Priority 2 funding for FY 2011 is currently being provided only at the 90% level and, beginning this week, is being denied at 79% and below.  The prospects for Priority 2 funding much below the upper end of the 80-89% band appear slim.

Wave 89 for FY 2010 will be released on Wednesday, March 14th.  Cumulative funding for FY 2010 is $3.0 billion.  Priority 2 funding is being provided at all discount levels.

E-Rate Updates and Reminders

Still More FCC Appeal Decisions:

In the last three months, in an effort to reduce its backlog, the FCC has issued a series of appeal decisions involving over 340 applicants.  Last week, the FCC released four decisions approving appeals for 53 applicants.  As have been most recent decisions, these were based largely on "past precedent" and provided little detail on the FCC's decision-making process.  The recent appeal topics covered are outlined below.

• Discount levels – 44 approved (DA 12-300).
• Service deadline extensions – 6 approved (DA 12-323).
• RFP issued with non-RFP Form 470 – 1 approved (DA 12-334).
• No consultant LOAs – 2 approved (DA 12-335).

The LOA decision is useful because it formalizes what heretofore appears to have been informal FCC guidance to USAC.  The key section of the decision reads:

Commission rules do not require E-rate applicants to have a contract or agreement with a company or person providing E-rate consulting services.  USAC may request confirmation, such as a letter of agency, from an applicant that a consultant has the authority to respond to USAC questions on its behalf.  However, Commission rules do not require such a letter to be signed before the E-rate consulting services are provided.

Medicaid and Direct Certification:

In its 2011 fall training, USAC acknowledged that all direct certification students are considered NSLP-eligible for E-rate discount rate purposes (see Slide #18 of the Discount Calculations presentation).  As discussed in our newsletter of October 31, 2011, direct certification permits schools to enroll students in their free and reduced-price lunch programs, without first collecting formal NSLP applications, based on state-provided data of families participating in social service programs such as food stamps "(SNAP") or Temporary Aid to Needy Families ("TANF").

Last week, the USDA announced an expansion of the direct certification process to Medicaid recipients on a pilot-program basis in six states — Alaska, Florida, Illinois, Kentucky, New York, and Pennsylvania.  From USDA's perspective, this "new process will allow for administrative efficiencies, reduce improper payments and streamline efforts to provide access to critical nutrition for kids across the nation."  From an E-rate perspective, it represents another step forward in helping schools determine the true NSLP eligibility of their students and maximize their E-rate discounts.

Dunning Parents for Unpaid School Lunches:

According to a favorable editorial in The Columbus Dispatch, the Board of Education of the Columbus City Schools recently hired a collection agency to recoup outstanding student lunch payments from parents who owe more than $50.  Although only a small percentage of parents are affected, the aggregate debt involved is over $700,000.

The interesting point from an E-rate perspective is that at least some of the outstanding debt might be attributed to lunches that would have been provided free or at a reduced price had the parents submitted NSLP applications.  By focusing parental attention on unpaid lunches, Columbus City Schools may experience a modest increase in their aggregate discount rate.

Comment Period Set on E-Rate Digital Literacy Issues:

Last month, as discussed in our newsletter of February 13th,  the FCC released a Report and Order and Further Notice of Proposed Rulemaking (FCC 12-11) dealing with a comprehensive reform and modernization of the Low-Income program, one of the four Universal Service Fund ("USF") programs.  Although they are separate programs, the NPRM included requests for comments to transfer $50 million from Low-Income to E-rate to support a targeted four-year digital literacy initiative.  According to the FCC, the rationale for administering a literacy program through E-rate would be "…to enable library patrons to effectively utilize the Internet access provided at libraries, or to enable parents and other members of the community to learn skills to use E-rate funded connections…" in schools (now permitted outside of regular school hours).

The FCC's Order and NPRM was published in the Federal Register last week setting the due date for comments as April 2nd and for reply comments as May 1st.

Schools and Libraries News Brief Dated March 9 – SPIN Changes and 471 Filing Tips

Last week's SLD News Brief for March 9, 2012, reviews the difference between corrective and operational SPIN changes.  Most importantly, it discusses the new and more stringent rules regarding operational SPIN changes which require that:

• There must be a legitimate reason to change service providers (e.g., breach of contract or the service provider is unable to perform the requested service) and
• The newly selected service provider must have received the next highest point value in the original bid evaluation. NOTE: If the applicant did not receive multiple bids, the applicant must submit a statement explaining that it received only one or no bids.

The News Brief provides a list of ten tips for applicants filing online FY 2012 Form 471 applications, namely:

1. Get an FCC Registration Number ("FCC RN") if you don't yet have one (a tip for new applicants).
2. Review your entity name, number, address, and category in the Billed Entity Search Tool and change any incorrect information.
3. Request entity numbers for any new entities.
4. Locate your NCES or FSCS codes (see NCES Data Tools).
5. Locate the Service Provider Identification Number ("SPIN") for each of your service providers (see SPIN Contact Search).
6. Check the FCC Form 470 application you intend to cite on each funding request (and make sure that Form 470 is certified).
7. Review the information requested in Block 2 about high-speed Internet access services.
8. Have your student count and demographic information ready for your Block 4 worksheet(s).
9. Certify your Form 471 application upon submission.
10. Submit your Item 21 attachments when submitting your Form 471 application.