Funding Status
Wave 12 for FY 2012 will be released on Tuesday, September 25, 2012, for $48.7 million. Priority 2 funding is being provided at 90%, and is being denied at 89% and below. Cumulative funding for FY 2012 is $1.19 billion.
Wave 62 for FY 2011 will be released on Wednesday, September 26, 2012, for $6.9 million. Priority 2 requests are being funded at 88% and above, and denied at 87% and below. Cumulative funding for FY 2011 is $2.36 billion.
Wave 101 for FY 2010 will be released on Monday, September 24, 2012, for $709. Priority 2 requests are being funded at all discount levels. Cumulative funding for FY 2010 is $3.05 billion.
E-Rate Updates and Reminders
Non-Recurring Service Delivery Deadline:
The deadline for receiving non-recurring (e.g., installation) services for FY 2011 is September 30, 2012. This deadline may also apply to non-recurring service FRNs for previous funding years that had been extended. A non-recurring service delivery deadline, which is not automatically extended, may be extended upon request if the applicant can show that the project was delayed as the result of circumstances beyond its control. A request to extend a service delivery deadline, however, must be filed on or before the date of the current deadline.
FCC Comments and USAC Board Nominations:
Reply comments on the SECA petition seeking clarification on "free" bundled end-user equipment (see DA 12-1325) are due September 24th.
The FCC is seeking nominations (DA 12-1469) to fill nine of the eighteen outside director positions on the USAC Board that are being filled temporarily, are vacant, or will soon become vacant. Nominations are due by October 15, 2012.
FCC Appeal Decisions Watch:
The FCC released one appeal decision (DA 12-1482) last week addressing requests by 39 applicants for waivers of FY 2011 and FY 2012 (and one for an earlier year) Form 471 filing deadlines. Consistent with precedent, the FCC approved waivers for 13 applicants who had filed within 14 days of the deadline. It also approved waivers for 12 applicants who had been denied for failing to meet deadlines for filing certifications or Item 21 attachments (which, in some cases, the applicants attributed to USAC processing errors). The FCC denied waiver requests (or petitions for reconsideration) of 17 applicants who had filed after the 14 day unofficial grace period (or had not filed at all) because they had "failed to present special circumstances to justify a waiver."
Schools and Libraries News Brief Dated September 21 – Lowest Corresponding Price
The SLD News Brief for September 21, 2012, provides USAC's most comprehensive write-up to date of E-rate's Lowest Corresponding Price ("LCP") rule — a longstanding requirement not often discussed until last spring. As interpreted by USAC, presumably with FCC guidance, LCP requires all service providers to charge their E-rate customers no more than LCP. LCP is defined as "the lowest price that a service provider charges to non-residential customers who are similarly situated to a particular E-rate applicant (school, library, or consortium) for similar services." It is equivalent to the concept of "most favored nation" pricing.
LCP has an interesting history. Although the LCP requirement traces back to the earliest E-rate orders, starting with the initial Federal-State Joint Board recommendations in 1996 (FCC 96J-3) and the first major Report and Order in 1997 (FCC 97-157), little attention was paid to it for over a decade — except, apparently, in a few audits.
The LCP issue resurfaced publicly in 2010 when the United States Telecom Association ("USTA") and the Cellular Telephone Industry Association ("CTIA") filed a joint petition with the FCC seeking a declaratory ruling clarifying certain aspects of the requirement (see our newsletter of April 19, 2010). Basically, the petition sought to limit the definition of LCP and the manner in which it can be enforced. Although the FCC quickly requested public comment (DA 10-627) on the proposed clarifications, no order was ever issued.
Earlier this year, ProPublica (an "independent non-profit newsroom") published an online article entitled "AT&T, Feds Ignore Low-Price Mandate Designed to Help Schools." The gist of the article was that neither telecom carriers nor E-rate program administrators had been paying much attention to this pricing requirement and, as a result, schools were being overcharged to the detriment of both the schools and the E-rate fund. In less than a month, in its spring service provider training, USAC included a section on LCP (see slides # 21-32 of the Program Compliance presentation). In July, USTA and CTIA filed an ex parte letter with the FCC expressing concern about those training materials. The letter summarizes the USTA/CTIA position as expressed in its FCC 2010 petition, and called upon the FCC "to refresh the record and act on the petition on a prospective basis." Last week's News Brief may be an indication that the FCC considers the LCP rules to be clear and to have been in effect since E-rate began.
This may not be good news for E-rate service providers, and not just for the telecommunications carriers. It should, however, be helpful to E-rate applicants who, at the very least, stand to gain additional leverage on pricing. We suggest that all applicants read this News Brief carefully. A few of the more useful statements are as follows:
- Service providers cannot charge E-rate applicants a price above the LCP for E-rate services.
- A service provider – regardless of the size of the company or the category of service provided – must ensure that the LCP is provided to E-rate applicants. The applicant is not obligated to ask for it, but must receive it.
- The service provider's obligation to provide the LCP is not tied to a response to an FCC Form 470 or Request for Proposals (RFP). The service provider must actually charge a rate that is the LCP, not just offer the LCP in a bid response.
We expect that this LCP information, perhaps with additional clarification, will be covered in the SLD's fall training that begins October 1st.