E-Rate Central News for the Week
May 27, 2013
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.
Wave 1 for FY 2013 will be released on Wednesday, May 29, 2013, for over $130 million. The wave will provide funding for Priority 1 only, mostly for small straight-forward applications which did not require PIA outreach to applicants for additional information. In total, USAC will be mailing approximately 12,000 Funding Commitment Decisions Letters ("FCDLs") with funding averaging about $11,000 per application. Last year's first wave was much larger, but was not released until July 10th. The earlier start to FY 2013 funding will mean that many applicants will be able to start receiving discounted services July 1st — once they file their Form 486s. (Note that the SLD's online Form 486 has just been updated to include FY 2013 dates in the pull-down menu.)
Wave 45 for FY 2012 will be released on Thursday, May 30, 2013, for $48.9 million. Priority 2 funding is being provided at 90%, and is being denied at 89% and below. Cumulative funding for FY 2012 will be $2.33 billion.
Wave 94 for FY 2011 will be released on Friday, May 31, 2013, for $19.1 million. Priority 2 requests are being funded at 88% and above, and denied at 87% and below. Cumulative funding for FY 2011 will be $2.60 billion.
Comments on the FCC's Bundled Components Proposal
As discussed in our newsletter of April 15, 2013, the FCC requested comments (DA 13-592) on the eligibility of otherwise ineligible components bundled, without cost allocation, with other eligible services. Examples include cellphones, wireless tablets, and VoIP phones. The FCC proposes to clarify, effective FY 2014, that such end-user equipment is fully ineligible. It also requested comments on the cost allocation procedures and on the definition of "ancillary." Initial comments were due May 23, 2013; reply comments are due on June 7, 2013. Several of the more interesting comments, both pro and con, are summarized below.
Broadcore, a VoIP provider, supported the FCC's proposal requiring cost allocation of all bundled services, but argued that the "clarification" should become effective as of FY 2013 rather than waiting for FY 2014.
E-Rate Central supported the FCC's proposal. While simple in concept, E‑Rate Central noted that the procedural aspects of cost allocation may be complex. The cost allocation of cellular service devices, for example, is difficult to do precisely for accounts covering multiple users with different types of devices and with overlapping two- to three-year term agreements. In such cases, E-Rate Central encourages the FCC to work with USAC to develop monthly "safe harbor" eligibility percentages based on weighted averages of each carrier's bundled product offerings.
E-Rate Provider Services supported the FCC's proposal. It proposed a simplified approach to allocating the eligibility of Web-based services.
Steven Kaplan supported the FCC's proposal, expanding on E-Rate Central's concern regarding "eligibility creep" and to discuss the negative and related impact that "price creep" has been having on Priority 1 funding.
Funds For Learning disagreed with the FCC proposal citing "untested, unsupported assumptions about how much 'free' ineligible services have been costing and will cost the E-rate program in the future." FFL used its comments to promote its own plan to fix the E-rate funding problem by limiting discounts to a maximum dollar per student.
Sprint Nextel asked the FCC to retain the current policy of permitting "free" cellphones without cost allocation. Sprint agreed with the FCC that as a "theoretical matter" the real cost of a free or reduced priced device "results in a more expensive bundle," but argued that "there is no data to support this supposition." Sprint did not discuss the issue of extending the current practice to other non-cellular components.
E-Rate Updates and Reminders
SLD Fall Applicant Training Schedule:
The SLD has scheduled eight one-day applicant training sessions this fall from late September through early November. As of last Friday, registrations are being accepted on a waiting list only basis for Washington DC, Houston, and Los Angeles. Regular registrations are still being accepted for Newark (10/8), Minneapolis (10/15), St. Louis (10/22), Atlanta (10/24), and Portland (11/7), but less than 200 spaces are available in total.
FCC Appeal Decisions Watch:
The FCC continued its recent support of USAC findings involving competitive bidding violations by denying an appeal by Fall River PSD (DA 13-1159). Similar to the Henrico County SD decision (DA 13-999) reported two weeks ago in our newsletter of May 13, 2013, the FCC agreed that Fall River had failed to assign the highest weight to price in its vendor selection process. The district had weighted price the same as another factor, "knowledge of infrastructure." The FCC again rejected the argument that the same bidder would have one had price been weighted higher, noting that all four bidders had received identical scores in the "price/charges" category, suggesting that price was an irrelevant factor.
Update on the FCC Chairmanship:
Former FCC Chairman Julius Genachowski's resignation became effective May 17th. President Obama has nominated Tom Wheeler to replace him, but has not yet sent his name to the Senate for confirmation. We expect that the President will first make a second nomination to replace Robert McDowell, who also recently resigned, so that the two nominees, a Democrat and a Republican, can be presented to the Senate for confirmation as a package. In the interim, Mignon Clyburn is serving as Acting Chairwoman.
Schools and Libraries News Brief Dated May 24 – Information Requests from USAC
The SLD News Brief for May 24, 2013, summarizes USAC's procedures for requesting additional information from applicants either to complete data entry on paper forms by the Problem Resolution group, or to review pending applications by the Program Integrity Assurance ("PIA") group.