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In This Week's Issue
» Funding Status Update
» Pending FCC/USAC Issues
» E-Rate Updates and Reminders
» Schools and Libraries News Brief dated January 25 — Form 471 Preparation

E-Rate Central News for the Week
January 28, 2013

Introduction

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 2013 Form 471 application window opened on Wednesday, December 12, 2012, and will close at 11:59 p.m. (EDT) on Thursday, March 14, 2013.

Wave 28 for FY 2012 will be released on Tuesday, January 29, 2013, for $33.5 million. Priority 2 funding is being provided at 90%, and is being denied at 89% and below. Cumulative funding for FY 2012 is $1.80 billion.

Wave 78 for FY 2011 will be released on Wednesday, January 30, 2013, for $5.1 million. Priority 2 requests are being funded at 88% and above, and denied at 87% and below. Cumulative funding for FY 2011 is $2.50 billion.

Pending FCC/USAC Issues

Both applicants and service providers are awaiting FCC and/or USAC action and/or additional guidance on a number of E-rate issues. The following is a brief summary of a dozen pending issues, both large and small:

  1. New E-rate NPRM:  The last set of significant changes to the E-rate program was based on a major Notice of Public Rulemaking ("NPRM") and the resulting Sixth Report and Order (FCC 10‑175) issued in 2010. Since then a broad new NPRM has been rumored, but does not appear imminent.
  2. Priority 2 Funding:  Early indications are that there will not be sufficient E-rate funding available for FY 2013 to fully fund valid Priority 2 requests at 90% (see our newsletter article on the E-rate fiscal cliff). This issue is unlikely to come to a head before USAC releases FY 2013 preliminary demand numbers in April and/or the FCC determines the amount of roll-over funding available for FY 2013 early next summer.
  3. FCDL Backlog:  USAC recently indicated that the target for issuing Funding Commitment Decision Letters ("FCDLs") on all "workable" FY 2012 applications would be by the end of March. Currently, however, USAC continues to issue regular waves for funding years as far back as FY 2010.
  4. FCC Appeal Backlog: The FCC has been working diligently — and apparently successfully — to reduce its backlog of E‑rate appeals and waiver requests. Some recent decisions have resolved appeals filed only a month or two earlier. However, other requests for review going back to at least 2003 remain outstanding.
  5. Web Hosting:  Although not reflected in the Service Provider Conference Call minutes of November 14, 2012, USAC indicated on that call that Web hosting was eligible only with respect to an applicant's own Web site, and that further guidance would be included in a future SLD News Brief.
  6. Bundled End-User Equipment:  In its ESL Order for FY 2013 (DA 12-1553), the FCC indicated that it would "defer acting…for now" on the eligibility of "free" VoIP phones. A similar issue regarding "free" or heavily-discounted smartphones and tablets with cellular services also remains unresolved. Recently, the FCC apparently permitted the unallocated inclusion of free VoIP phones on FY 2012 applications (see our newsletter of January 14, 2013), but did so informally and without any formal guidance on how such devices would be treated for FY 2013.

Note:   Pending formal FCC guidance, applicants signing multiyear contracts for bundled end-user equipment during the current application window should assume that such devices may ultimately have to be cost allocated out of their funding requests. We recommend that such requests, if included without allocation, be made on separate Form 471 applications so as not to jeopardize the timely funding of other FRNs.

  1. CIPA Requirements:  Last November, the FCC released a short FAQ (DA 12-1836) addressing the new CIPA requirement for schools to educate their students about appropriate online behavior. The FCC has promised, but has yet to provide, more important CIPA guidance on the off-campus use of school- or library-provided mobile Internet devices and/or the on-campus use of student- or patron-owned devices.
  2. Gift Rules:  Over a year ago, USAC sent the FCC a Request for Guidance on Rules Governing Gifts in the E‑rate Program. Based on material presented during the SLD's fall training for 2012, it appears that the FCC may have responded informally to some of the issues raised by USAC, but there has been no formal response.
  3. Lowest Corresponding Price:  Similarly, SLD training presentations in both the spring and fall of 2012 reviewed the basic responsibilities of service providers to charge LCP rates (a form of "most favored nation" pricing). Attempts by industry groups (see a USTA/CTIA joint petition in 2010 and ex parte notice in 2012) seeking a declaratory ruling clarifying certain aspects of LCP have gone unanswered by the FCC.

Note:   See also our newsletter article entitled LCP from an Applicant's Perspective.

  1. Community Eligibility Option:  The USDA's CEO program, providing free meals to all students, is currently offered only to schools in six states (IL, KN, MI, NY, OH, and WV) and the District of Columbia, but will expand nationwide by 2014. For E-rate discount rate purposes, CEO schools are currently operating under temporary FCC instructions to utilize previous one- or two-year old NSLP data — guidance that will become increasingly untenable in future years. We would expect new guidance at least by next fall.
  2. Queen of Peace and State Master Contracts:  The FCC's Queen of Peace appeal order (DA 11-1991), and the resulting rules for FY 2013, prohibit applicants from citing the specific names for products and services in their Form 470s and RFPs without including the phrase "or equivalent."  Questions concerning the applicability of the "or equivalent" language in state master contract procurements, which might invalidate such contracts for E-rate purposes, have been raised with the FCC, but have not yet been answered.
  3. Miscellaneous:  For completeness — and we undoubtedly have missed others — we note pending issues at the FCC directly or indirectly involving E-rate including:  (a) a revamping of the FCC's CORES Registration Number system (FCC 10-192); (b) E-rate administration of a digital literacy program as proposed as a part of the reform of the Low-Income program (FCC 12-11); and (c), proposed clarification of the "educational purpose" criterion as it applies to the eligibility of remote VPN access to school computer systems by students and teachers (DA 12-983). USAC has also promised to request FCC guidance on the disposal of E-rate funded equipment (less than five years old) irreparably damaged during Hurricane Sandy. In addition, we are awaiting an FCC report of lessons learned during the FY 2011 Learning-on-the-Go wireless Internet access pilot program.

E-Rate Updates and Reminders

Extended FY 2011 and FY 2012 Deadlines Expiring Today, January 28th:

The extended FY 2011 recurring service invoice deadline, previously set to expire last October 29th, is January 28, 2013. The January 28th date corresponds to the regular invoice deadline for non-recurring services with a September 30, 2012, service delivery deadline.

The extended FY 2012 Form 486 deadline for Waves 1-12 is also January 28th. The normal 120-day deadline will apply for other later FY 2012 waves. For example, the Form 486 deadline for Wave 13, issued October 2, 2012, will be January 30, 2013.

Form 470 Deadline for FY 2013:

With the Form 471 application window for FY 2013 closing on March 14th, the last day to post a valid Form 470 (and/or RFP if applicable) for such applications is Valentine's Day, February 14th. A Form 470 posted on that date will have an Allowable Contract Date of 28 days thereafter, the day the window closes. That would make March 14th a very busy day for applicants selecting vendors, signing contracts, and filing Form 471s.

If at all possible, Form 470s for FY 2013 should be filed as far in advance of February 14th as possible. Remember also that February 14th is the last day to post a Form 470; forms submitted on paper, rather than online, should be mailed to be received by USAC at least a week in advance to allow time for data entry.

FCC Appeal Decisions Watch:

The FCC released an appeal decision (DA 13-57) last week granting another in a series of requests for review by Ed Tec Solutions on behalf of its clients. In this case, the FCC reversed a USAC COMAD decision involving the configuration of a server and a cabinet substitution.

Schools and Libraries News Brief Dated January 25 – Form 471 Preparation

The SLD News Brief for January 25, 2013, discusses several preliminary steps that can be taken to prepare for the filing of Form 471 application(s). In particular:

  1. Confirming Billed Entity information, or requesting a new Billed Entity Number ("BEN").
  2. Gathering the required recipient(s) of service information, including discount rate data, required for Block 4.
  3. Determining the appropriate Form 470 number for each funding request.
  4. Obtaining signed copies of all required contracts.
  5. Verifying the budget information required in the Item 25 certification.

 

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.