Funding Status
The application window for FY 2011 opened on Tuesday, January 11, 2011, and will close at 11:59 p.m. EDT on Thursday, March 24, 2011. Although valid Form 470s for FY 2011 may be posted as late as February 24, 2011, we strongly advise applicants to file as soon as possible so as to provide adequate time, after waiting the required 28 days, to select vendors, sign contracts, and file Form 471s.
Wave 38 for FY 2010 will be released on Tuesday, February 15th, for $33.2 million. This will raise cumulative funding for FY 2010 to $2.24 billion. Currently, Priority 2 funding is being awarded at 81% and above, and denied at 79% and below. A recommendation to deny funding at 80% and below is pending before the FCC.
No funding wave for FY 2009 is scheduled for release this week.
Connect America Fund NPRM
On Tuesday, February 8th, the FCC issued a Notice of Proposed Rulemaking ("NPRM") designed... " to get broadband to all of rural America and spur infrastructure and job creation, by modernizing the Universal Service Fund ("USF") and intercarrier compensation (ICC) system..." The proposals on which comments are requested include both short-term and long-term changes. If adopted, the proposals would transition USF financial support from basic voice telephone services to broadband services, particularly in rural areas. (See Connect America NPRM News)
Based on recommendations in last year's National Broadband Plan, the NPRM reflected the following four principles:
- "Modernizing USF and ICC To Support Broadband Networks. Modernize and refocus USF and ICC to make affordable broadband available to all Americans and accelerate the transition from circuit-switched to IP networks, with voice ultimately one of many applications running over fixed and mobile broadband networks.
- "Ensuring Fiscal Responsibility. Control the size of USF [most specifically the High Cost Program] as it transitions to support broadband by combating waste and inefficiency. The Commission recognizes that American consumers and businesses ultimately pay for USF [every month through surcharges on their telephone bills].
- "Demanding Accountability. Require accountability from companies receiving support, to ensure that public investments are used wisely to deliver intended results. Government must also be accountable for the administration of USF, including through clear goals and performance metrics for the program.
- "Enacting Market-Driven and Incentive-Based Policies. Transition to market-driven and incentive-based policies that encourage companies to maximize the impact of scarce program resources and the benefits to all consumers."
The extensive 289-page NPRM (including the Commissioners' statements) makes only two references to E-rate, primarily related to the impact the Connect America Fund ("CAF") would have on E-rate funding and the role of schools and libraries. In particular:
- Questions regarding how and if USF support for basic broadband deployment should be integrated with E-rate and other USF programs, particularly as it relates to the role of schools as anchor institutions in their communities. Specifically:
Para. 149. We also seek comment on how USF can best achieve synergies with the connectivity objectives articulated for schools, libraries, and rural health care facilities in section 254. Where build out is required to connect these particular types of community anchor institutions-for example, through the construction of lateral connections to regional fiber networks-should this construction be supported through the CAF, E-Rate, or Rural Health Care programs, individually or in combination? Would such a requirement complement or overlap any goals or requirements of those programs? Should USF recipients have any obligations to serve anchor institutions, such as health care facilities or community centers, in the communities in which they serve residential customers? On the one hand, we recognize the critical importance of ensuring adequate access to broadband infrastructure for community anchor institutions and recognize the value of specialized programs tailored to the unique needs of particular anchor institutions. On the other hand, splitting infrastructure and/or service funding among different programs that serve discrete types of institutions may forego potential efficiencies from aggregating funding for multi-use broadband networks.
- Questions regarding how a decision to provide CAF support for only one eligible telecommunications carrier ("ETC") per area would affect the number of carriers that might bid on E-rate projects. Specifically:
Para. 408. To the extent we decide to support a single provider through the CAF, we seek comment on whether (and if so, how) that would impact the operation or effectiveness of the Commission's E-rate, Rural Health Care, and low-income programs. For instance, would funding only one CAF provider per geographic area, at most, reduce the number of carriers that bid to provide services to schools, libraries, and health care providers eligible for funding from the E-rate or Rural Health Care programs?
The good news in all this, from an E-rate perspective, is that the FCC is proposing to redirect and strengthen the Universal Service Fund, which is the backbone of E-rate funding, and to do so in a manner that recognizes the importance of E-rate's role in the National Broadband Plan.
One potentially adverse consequence, particularly for small applicants, could be the elimination of E-rate discounts on basic telephone services - a possibility first raised in last year's E-rate NPRM. Although the resulting 6th Report and Order, issued last September, did not make that change, such a change in the future would be consistent with the transition of the High Cost Program's support from basic voice telephone services to broadband services.
E-Rate Updates and Reminders
Type-In Form 470/471 Availability:
A number of applicants have already successfully filed online Form 470s (the new version) and Form 471s, but we continue to hear reports of those having problems with certain features. We understand that USAC did another system update this past weekend, so we are expecting fewer problems this week.
For those still encountering problems and considering the use of paper forms, we offer the following suggestions and warnings:
- For ease of completion, E-Rate Central offers type-in PDF versions of both forms in the Forms Rack section of its Web site.
- Remember that the critical 28-day posting clock on the Form 470 starts only when the Form 470 is posted. If an applicant mails in a paper Form 470, it may take awhile for it to be data entered and posted. Paper Form 470s for FY 2011 will need to be filed this week, as early as possible.
- By way of contrast, the submission date for a paper Form 471 is determined by the postmark (or express carrier documentation) date. Anyone waiting until the final hours of the FY 2011 Form 471 deadline on March 24th needs to make sure that they can find an open post office and that their mailing envelope is actually stamped with that day's time and date.
Form 486 Reminder Deadline:
On January 24th, the SLD mailed over 2,350 Form 486 Urgent Reminder Letters to applicants who had apparently missed their deadlines for filing Form 486s for FY 2010. The letters gave those applicants an additional 21 days to file their Form 486s without penalty. That deadline is up today, February 14th.
The SLD's February 11th News Brief includes the following reminders for applicants filing Form 470s and selecting vendors:
- Possession of a SPIN is a necessary, but not necessarily sufficient, condition for a service provider to participate in the E-rate program. It does not mean that all that vendor's products are E-rate eligible.
- It is not enough to simply list a desired product or service anywhere in a Form 470; it must be listed in the proper category. Wireless data and/or VoIP services, for example, can be provided by either telecommunications or Internet carriers, and should be listed under both categories.
- Tariff or month-to-month services do not require contracts, but must be rebid annually with a Form 470.
- Documentation of the entire competitive bidding process is critical. The SLD suggests that an applicant retain the following documents:
- A copy of your Form 470. (Also keep a record of your security code if you file online.)
- A copy of your RFP.
- A copy of your technology plan, with the creation date memorialized somewhere on the plan. Remember that this need not be your final approved plan, but the written plan that provided the basis for your Form 470.
- Any specific documentation you used for reference in preparing your Form 470 or RFP.
- Copies of winning and losing bids.
- Your bid evaluation plan and a description of your evaluation process.
- Your evaluation criteria.
- Your completed bid evaluation that demonstrates the bid you chose was the most cost-effective.
- A copy of your contract, if you sign one.