E-Rate Central News for the Week
July 1, 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 7 for FY 2013 will be released on Tuesday, July 2, 2013, for $6.6 million. Funding is currently being provided for Priority 1 services only. Cumulative funding for FY 2013 will be $190 million. The first batch of Form 486 Notification Letters was issued last Wednesday to applicants who had been funded in the initial FY 2013 waves and who had filed early Form 486s.
Wave 50 for FY 2012 will be released on Friday, July 5, 2013. Priority 2 funding is being provided at 90%, and is being denied at 89% and below. Cumulative funding for FY 2012 is $2.57 billion.
Wave 97 for FY 2011 will be released on Monday, July 1, 2013, for $2.92 million. Priority 2 funding is being provided at 88% and above, and is being denied at 87% and below. Cumulative funding for FY 2011 will be $2.61 billion.
Review of Income Survey Procedures
Last week, the FCC sent subpoenas to certain applicants asking for documents related to income surveys and/or alternative methods used to support their E-rate discount rate. Requested documents were for the period June 1, 2008 through the present, in line with the FCC’s five-year record retention rules. Specifically, the subpoenas demanded that the applicants produce the following:
- All Documents constituting contracts of employment and/or labor ag
- reements which applied to hiring an E-rate consultant to work on behalf of the School District.
- All Documents constituting communication between the School District’s E-rate Consultant and the School District referencing the calculation of E-rate Discount Rates.
- All Documents constituting Surveys, Alternative Discount Mechanisms or measures of household income level of students in the School District for the purpose of determining the E-rate Discount Rate.
- All Documents containing information on the number of students eligible for NSLP in the School District and any materials used to calculate the number of students in the NSLP.
While it is too early to know where this FCC investigation is going, it is a good time to review the proper use and rationale for income surveys as an alternative mechanism for calculating school discount rates.
For most applicants, NSLP enrollment has been and remains the primary determinant of school discount rates. But not all schools participate in the NSLP program, so that data is not always available. Additionally, some schools have found that NSLP data does not accurately reflect the poverty level of all their students, particularly at the upper grade levels. E-rate rules, therefore, permit applicants to calculate discount rates using several Alternative Discount Mechanisms, including income surveys.
Income surveys require a substantial amount of work but, if properly done, may be the only (or superior) way to accurately estimate the percentage of students eligible for free or reduced-priced meals. The basic process works as follows:
- Surveys must be sent to all the families with students in the schools with instructions to complete and return the survey forms regardless of family income levels. Generally, an introductory letter is included explaining the importance of the survey in determining the level of aid available to the schools and stressing the confidentiality of the data.
- Returned surveys are compiled on a school by school basis to calculate the percentage of reporting students at or below the income level for NSLP eligibility. Income eligibility levels are set each year by the U.S. Department of Agriculture (“USDA”) based on family size.
- If, for any given school, properly completed surveys are received representing 50% or more of that school’s students, the survey eligibility percentage may be extrapolated to the school as a whole.
Example: For a school with 100 students, over 50% of the surveys are returned representing 60 students. Of those 60 students, 42 (or 70%) are eligible. The school may then report 70% eligibility for its entire student base, i.e., its Block 4 would indicate a total enrollment of 100 with 70 eligible students.
- If the survey return rate is less than 50%, the survey results cannot be extrapolated, but eligible students can still be counted in the school’s discount rate calculation and/or used to augment the actual NSLP count. In the latter case, the school must ensure students are not double counted.
- It is critical that survey results be properly documented, and that documentation be maintained for a minimum of five years after the end of the last funding year for which the data was used. Results of a properly completed survey may be used for two consecutive funding years.
In both theory and practice, the most important aspect of extrapolating the eligibility percentage from the entire student base is that those returned forms can be considered statistically representative of that base. In particular, applicants using the income survey method are specifically precluded from using the standard NSLP application as a survey form. If the NSLP form were to be used, goes the reasoning, it would more likely bias the survey results by triggering a higher rate of return from low income families who may be more accustomed to applying for free and reduced-priced meals. A sample survey form, explaining the purpose of the survey and providing an income reporting page updated using the USDA’s 2013-2014 guidelines, is available in both English and Spanish on E-Rate Central's website. We believe that our version is easier to use than the SLD’s sample survey form which (a) requires families to report their actual income levels (rather than simply indicate whether their incomes are above or below the NSLP eligibility level), and (b) must be completed on a school-by-school basis (rather than, for a district, simply indicating which school(s) the families’ children attend).
E-Rate Updates and Reminders
FCC NPRM on E-Rate in July:
The FCC appears ready to release its long-awaited Notice of Public Rulemaking ("NPRM") after its next open Commission meeting on July 19th. The tentative agenda for that meeting includes the following item:
Modernizing the E-Rate Program for Schools and Libraries: The Commission will consider a Notice of Proposed Rulemaking to modernize the Schools and Libraries Universal Service Support mechanism (the E-rate program) to support high-speed broadband for digital learning technologies and ensure all students, teachers, and library patrons have the tools they need to succeed in the 21st century.
FCC Appeal Decisions Watch:
The FCC released two appeal decisions last week, both straight-forward and based on past precedent. In particular:
- Midlothian SD (DA 13-1422): Overturned a funding denial based on USAC’s determination that the district’s competitive bidding documentation “did not clearly demonstrate that price was given the highest weight.” The FCC agreed that the documentation was ambiguous on this point, but found that the district had in fact selected the lowest priced bid.
- Mercury Communications (DA 13-1423): Overturned a Commitment Adjustment Decision (“COMAD”) letter to Mercury seeking recovery of the discounted cost of equipment that an audit had found “was not installed, operational, or in use.” Mercury had in vain appealed to USAC arguing:
- Mercury had not been advised of the audit and had not been given an opportunity to refute the charges;
- That the equipment had been installed but had been upgraded two years later prior to the audit; and,
- If at all, the COMAD should have been received by the district, not the supplier.
In ruling for Mercury, the FCC addressed only the second argument, noting the district’s “decision to upgrade the internal connections equipment was permissible under the Commission rules in effect at the time.”
Note that under current FCC rules, installed E-rate equipment must remain in place for at least three years (unless a school is closed). After three years, the equipment can be transferred to any eligible location (regardless discount rate). Overall, the equipment may not be traded-in or disposed of for at least five years from the date of installation.
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, the Washington DC and Los Angeles sessions were closed, and registrations were being accepted on a waiting list only basis for Atlanta, Houston, Newark, and St. Louis. Regular registrations are still being accepted for Minneapolis (10/15) and Portland (11/7), but less than 50 spaces are available in total.
Senator Edward Markey:
In a special election to replace former Senator John Kerry, the current Secretary of State, Massachusetts elected former Representative Edward Markey (D, MA) to the Senate. While in the House, now Senator Markey had been the primary proponent of the E‑rate program. On the Senate side, this is a positive development for E-rate. Sen. Markey joins Sen. Jay Rockefeller (D, WV) as a major E-rate supporter — in a sense replacing former Sen. Olympia Snowe (R, ME) who retired at the end of the last term — but it leaves the House without its long-term E-rate supporter.
Schools and Libraries News Brief Dated June 28 – DRT
The SLD News Brief for June 28, 2013, reviews the use of the SLD’s Data Retrieval Tool (“DRT”), the public database containing information on all funding requests since the first funding year beginning in 1998. The information includes:
- Initial requests
- Funding status and committed amounts
- Associated service providers
- Form 486 status
- Invoice amounts and modes (SPI or BEAR)
The DRT data can be searched and downloaded in both standard and custom formats by (a) state, (b) applicant or service provider, (c) type of applicant or service category, or (d) funding wave. The DRT’s primary drawback is that all this data is not easily searchable across multiple funding years or states. Instead, users must access that data on a state-by-state and/or a year-by-year basis, and meld those files together.
For individual applicants, E-Rate Central provides complete funding histories from the DRT through its online Funding Quick Search tool found in the upper left-hand corner of the New York Information page. As illustrated below, applicant funding data is available on a drill-down basis at three levels: (a) FY 1998-2013 summary, (b) individual funding year, and (c) individual FRN.
For individual applicants, E-Rate Central provides complete funding histories from the DRT through its online Funding Quick Search tool found in the upper left-hand corner of each State Information page. As illustrated below, applicant funding data is available on a drill-down basis at three levels: (a) FY 1998-2013 summary, (b) individual funding year, and (c) individual FRN.