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In This Week's Issue
» Funding Status Update
» E-Rate and Digital Literacy Training
» E-Rate Updates and Reminders
» Schools and Libraries News Brief dated April 6 – RAL Corrections

E-Rate Central News for the Week
April 9, 2012


The E-Rate Central News for the Week is prepared by E-Rate Central. E-Rate Central specializes in providing consulting, compliance, and forms processing services to E-rate applicants. To learn more about our services, please contact us by phone (516-801-7804), fax (516-801-7814), or through our Contact Us Web form. Additional E-rate information is located on the E-Rate Central Web site.

Funding Status

The FY 2012 Form 471 filing window is closed and application reviews have begun.  USAC is expected to release a preliminary estimate of FY 2012 demand later this month.  The first funding wave for FY 2012 is expected in May.

Wave 42 for FY 2011 will be released on Wednesday, April 11th.  Cumulative funding for FY 2011 is $2.08 billion.  Priority 2 funding for FY 2011 is currently being provided only at the 90% level and is being denied at 79% and below.

Wave 93 for FY 2010 will also be released on Wednesday, April 11th.  Cumulative funding for FY 2010 is $3.04 billion.  Priority 2 funding is being provided at all discount levels.

E-Rate and Digital Literacy Training

Early in February, 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 Low-Income and E-rate are separate programs, the Low-Income NPRM included a section suggesting that a proposed digital literacy training initiative be administered through the E-rate program using funds generated from expected savings in the Low-Income program.

As of last Monday's deadline, the NPRM had drawn a number of comments addressing the digital literacy training proposals.  Some of the key issues from an E-rate perspective are discussed below (together with links to representative comments).

Funding for Digital Literacy Training:

The basis for the FCC's proposal to fund digital learning training is that it is needed to support the broader goal of "ensuring the availability of broadband service for low-income Americans."  Traditionally, "availability" — or "access" — has meant service deployment, robustness, and affordability.  The FCC is proposing to expand the concept of availability to training on the premise that "Americans who lack the skill to use broadband simply do not have the same access to services and information as other consumers."

None of the parties disputed the need for digital literacy training, but a number opposed the use of the Universal Service Fund ("USF") to subsidize the cost of such training.  Perhaps not surprisingly, the strongest arguments against the expanded use of limited USF funding came from the established carriers (e.g., the United States Telecom Association, Verizon, and the Alaska Communications System Group).  Alternatively, the California Public Utilities Commission suggested that the FCC include training in its proposed Lifeline Broadband Pilot Program to determine the cost and effectiveness of such training before deciding on broader USF funding.

Costs, Services, and Training Entities:

Noting that other funding to develop digital literacy programs has been available through, for example, Broadband Technology Opportunities Program ("BTOP") grants, the FCC proposed to: (a) limit its funding of training programs to $50 million over four years; (b) fund only entities not already offering formal training; (c) fund only schools and libraries (with libraries getting 80% of the funding); and (d) require 30% matching funds (equivalent to an E-rate discount of 70%).

Several parties argued that $50 million was not enough, even with the FCC program limitations, while other parties argued for even broader support.  The National Hispanic Media Coalition, for example, suggested funding teachers and librarians so that schools and libraries might "remain open longer and provide more meaningful assistance…"  The American Library Association ("ALA") pushed for funding existing training programs and eliminating the matching provision.  Several parties (e.g., Connected Nation, Gila River, New America Foundation, the Public Service Commission of the District of Columbia, etc.) sought the inclusion of other types of training entities such as community colleges, religious institutions, community centers, or even eligible carriers.

Program Administration:

The FCC's NPRM indicated that although the four USF programs have historically been administered separately, there is no statutory requirement to do so.  Thus, with the FCC apparently leaning towards training being provided at schools and libraries, there is some rationale for using E-rate to manage the program.  Several parties — most importantly the ALA, representing the libraries, and the American Association of School Administrators and the Association of Educational Service Agencies ("AASA/AESA"), representing the schools, argued strongly against the precedent-setting nature of this proposal.

What's Next?

Reply comments on the Low-Income NPRM are due May 1st.  Ultimately, the FCC may find enough positive statements scattered throughout the comments to support its initial proposals — or at least a pilot.  But our reading of the initial comments suggests that support for a limited digital literacy training program is not widespread; that funding is not available for a much broader training initiative; and that the schools and libraries are decidedly against using the E‑rate mechanism to administer any such program.

E-Rate Updates and Reminders                       

Censorship and Internet Filtering:

E-rate rules requiring compliance with the Children's Internet Protection Act ("CIPA") mandate the use of "technology protection measures" — e.g., filtering — to restrict access to materials harmful to minors.  The rules codify certain definitions such as "obscene" and "child pornography," but otherwise indicate that what is, or is not, defined as appropriate for minors is a local decision.  A recent court case, however, serves as a reminder that CIPA is not the only governing determinant of school Internet filtering policies.

Over the past year, under its "Don't Filter Me" campaign, the American Civil Liberties Union ("ACLU") has pushed hundreds of school districts to make changes in their filters to eliminate perceived biases.  Most have agreed, but one case went through the courts and was only recently settled.

In February, the ACLU took the Camdenton R-III School District (in Missouri) to a U.S. District Court because of the district's use of Internet filtering software that blocks "access to websites supporting lesbian, gay, bisexual, and transgender (LGBT) people but permits access to websites that condemn homosexuality or oppose LGBT legal protections."  The ACLU argued that "[A]llowing access to just one side of a debate is known in constitutional law as viewpoint discrimination, and has been condemned by the Supreme Court as the most egregious form of speech restriction."  As a result of a hearing, the district judge issued a preliminary injunction ordering the district to discontinue "its Internet filter system as currently configured."  Last month, the district agreed in a settlement to stop blocking pro-LGBT sites, submit to monitoring for 18 months to confirm compliance, and pay $125,000 in legal fees and costs.

For additional information, see the New York Times and ACLU reports.

Operational SPIN Changes under Review:

In its Sixth Report and Order (FCC 10-175), issued September 2010, the FCC significantly tightened the rules under which an applicant could switch E-rate funding from one service provider to another.  The new restrictions on operational SPIN changes became effective as of FY 2011.  Now in the second half of FY 2011, we are seeing an increased number of requests for operational SPIN changes, many of which are generating requests from USAC for more information consistent with the new rules.  In particular, applicants requesting such SPIN changes must be prepared to address the following two standard questions:

  • A detailed explanation of the need for the change.
  • The final bid evaluation worksheet (a listing of the bid weighting factors and individual vendors' scores for all vendors that participated in the original competitive bidding process) for the services requested in FRN(s) associated with the SPIN change or, if applicable, a statement that there was only one or no bids received.

By way of explanation, these requests refer applicants to USAC's updated guidance on Service Provider Identification Number ("SPIN") Change Guidance.

Revised USAC and SLD Websites:

USAC is about to revise its basic Website and all four of its program sites, including E-rate.  A short preview of the changes, which are expected to go live next week, is currently available.  According to USAC:

The goals of this project have been to make it easier to find and understand the information on our website. For applicants and service providers who rely on our website for news, program requirements, and resources, all the same content and tools remain available with this refresh. We have streamlined and multiplied the pathways for people to find what they need, clarified language, and de-cluttered the look and feel of the pages. We believe these changes will serve particularly well the needs of newcomers to universal service, trying to make a successful start with the Schools and Libraries Program.

Schools and Libraries News Brief Dated April 6 – RAL Corrections

Last week's SLD News Brief for April 6, 2012, reviews the procedure for correcting certain portions of a filed Form 471 application after an applicant receives a Form 471 Receipt Acknowledgment Letter ("RAL").  The News Brief provides the following tips:

  1. Verify that you need to submit a correction.
  2. If you submit a correction, make sure your submission is complete and timely.
  3. Be prepared to answer questions about your requested corrections.
  4. Remember that not all errors can be corrected using the RAL correction process.

It is important to note that RAL corrections submitted by fax or mail will not be confirmed, but that those submitted by e-mail (using Submit a Question) will receive a confirming case number.  If submitted in a timely fashion, changes should be available to PIA for application review.  Ultimately, RAL corrections will be noted in the Funding Commitment Decision Letter ("FCDL").


Disclaimer: This newsletter may contain unofficial information on prospective E-rate developments and/or may reflect our own interpretations of E-rate practices and regulations. Such information is provided for planning and guidance purposes only. It is not meant, in any way, to supplant official announcements and instructions provided by either the SLD or the FCC.