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In This Week's Issue
» Funding Status Update
» E-Rate 2.0 – Other Issues
» E-Rate Updates and Reminders
» Schools and Libraries News Brief for August 30 – Non-Recurring Services

E-Rate Central News for the Week
September 2, 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

Wave 16 for FY 2013 will be released on Thursday, September 5, 2013, for $48.6 million. Funding is currently being provided for Priority 1 services only. Cumulative funding for FY 2013 will be $509 million.

As of this Labor Day week, E-rate funding for FY 2013 remains far behind last year’s pace, barely breaking 50% of the comparable FY 2012 level. USAC has indicated that FY 2013 funding delays are the result of extra efforts to complete FY 2012 (and earlier) application reviews — presumably as a last ditch effort to find extra funds for roll-over into FY 2013 to provide some Priority 2 funding at the 90% level.

Wave 58 for FY 2012 will be released on Friday, September 6, 2013, for $8.67 million. Priority 2 funding is being provided at 90%, and is being denied at 89% and below. Cumulative funding for FY 2012 will be $2.74 billion.

Wave 116 for FY 2010 will be released on Thursday, September 5, 2013, providing $48 thousand for two applicants. Priority 2 funding is being provided at all discount levels. Cumulative funding for FY 2010 will be $3.06 billion.

E-Rate 2.0 – Other Issues

This is the sixth in a series of articles discussing the FCC’s Notice of Proposed Rulemaking for Modernizing the E-rate Program for Schools and Libraries (FCC 13-100), the “E‑Rate 2.0 NPRM,” which was formally released on July 23rd. This article discusses a number of additional issues addressed by the NPRM. A complete E-Rate Central Summary of the E-Rate 2.0 NPRM combining earlier material from this series is available on the E-Rate Central website.

CIPA Issues:

Without suggesting any specific proposals, the NPRM requests comments on the following questions:

  1. For CIPA purposes, what constitutes the definition of a “computer with Internet access?”
  2. How does CIPA apply to non-applicant owned devices used on-premise over E-rate supported networks?
  3. Conversely, how does CIPA apply to applicant owned devices used off-premise?

The second question (plus footnote #364) seems to imply that CIPA does not apply to situations wherein students bring their own devices on-campus, but access the Internet through their own cellular services, not via the schools’ Internet networks. An argument can be made, however, that schools still have some responsibilities in these situations as a result of CIPA’s student monitoring and educational requirements.

Rural Designations:

The FCC is proposing to “modernize” the definition of “rural area” to encompass additional schools and libraries currently located within outdated Goldsmith Modification urban designated areas.   In lieu of Goldsmith, the FCC proposes using the U.S. Department of Education’s NCES “urban-centric locale code.”  This approach, however, would require procedures to handle schools not yet assigned NCES codes and libraries. As an alternative, the FCC is considering using the census definitions of rural areas.

NSLP and CEO Issues:

The primary issue being addressed in this section of the NPRM is the growing use of the USDA’s Community Eligibility Option (“CEO”) to determine free meal reimbursement rates. This process is currently being trialed in a limited number of states, but is scheduled to be available nationwide by the 2014-2015 school year. Under CEO, meal reimbursement is determined by the percentage of students identified as eligible via direct certification, multiplied by a factor (currently 1.6x). CEO schools do not collect NSLP applications. For E-rate purposes, existing CEO schools are instructed to use historical eligibility percentages based on last reported NSLP data — a temporary fix at best (see our newsletter of August 6, 2012). The NPRM asks for suggestions on how to handle CEO schools for discount rate purposes, or for the use of other proxies for measuring poverty levels for all schools.

Waste, Fraud, and Abuse:

The NPRM includes a general request for ways to identify and pursue instances of waste, fraud, and abuse, but includes more detailed discussions on the following possible regulatory changes:

  1. Extend the E-rate document retention period from five to ten years. Since the retention period is measured from the last date to receive services, this would effectively require documents to be kept for twelve or more years. As this is well in excess of most state-level requirements for record retention, such an extended rule may make compliance administratively difficult.
  2. Fully document the competitive bidding process. The FCC asks whether it should require, as it has done for HealthCare Connect Fund applicants, E-rate applicants to routinely submit copies of all bids received, bid evaluation documents, vendor correspondence, board minutes, etc. To the FCC’s credit, it explicitly recognizes that such a process would be burdensome to both applicants and Fund administrators.
  3. Strengthen the form certification process by: (a) requiring both applicant and service provider forms to be signed by senior officers; (b) codifying existing certifications; and (c) adding new certifications on Lowest Corresponding Price (“LCP”) and competitive bidding procedures.
  4. Implement stronger post-commitment compliance and enforcement procedures such as: (a) requiring third-party independent audits of the larger applicants and service providers; and/or (b) strengthen suspension and debarment terms.

Perhaps not surprisingly, all these proposed changes are discussed in an NPRM section distinct from the preceding section dealing with streamlining the administration of the E‑rate program.

Wireless Community Hotspots:

One major development in educational technology not directly addressed in the E-rate 2.0 NPRM, or even in the President’s ConnectEd initiative, is the trend towards 24x7 learning (including digital textbooks) requiring off-campus Internet access. In large part, this reflects a practical understanding that E-rate cannot afford to fund full wireless or home Internet services. Perhaps designed as a compromise approach, the NPRM asks for comments on expanding community access to on-campus school Internet facilities to include off-campus access to school-operated and E-rate supported community WiFi hotspots.

National Emergency Procedures:

After Hurricane Katrina in 2005, and in subsequent disaster situations, the FCC has provided relief from certain E-rate rules, largely on an ad hoc basis. The FCC proposes to incorporate disaster relief mechanisms directly into its rules to provide relief in the event of an “Emergency” or “Major Disaster,” as defined by FEMA, causing “severe structural damage and displaced student and patron populations…”  The NPRM seeks comment on the types of relief to be provided such as:

  • Extension of filing deadlines
  • Relief from document retention rules for destroyed records
  • Special filing windows
  • Exemption from certain Form 470 filing and competitive bidding requirements
  • Relaxation of service substitution rules
  • Ability to “restart the clock” on the two-in-five rule

E-Rate Updates and Reminders

FCC Public Comment Schedule:

Notice of Proposed Rulemaking: Modernizing the E-rate Program for Schools and Libraries (FCC 13-100) — see article above

Release Date:

07/23/2013

Comment Date:

09/16/2013

Reply Comment Date:  

10/16/2013

The reply comment periods for revisions to FCC Forms 470 and 471 (DA 13-1590) and to FCC Forms 479, 486, and 500 (DA 13-1636) closed last week. No reply comments were received.

Online BEAR Update:

USAC announced in a Special Edition News Brief dated August 28, 2103, that systems updates for the new version of the Form 472 “BEAR” have been completed, and that BEARs may once again be filed online.

Applicants who had filed paper BEARs by mail, using the older version of the Form 472 (dated April 2007), postmarked on or after July 21, 2013, are being advised by the SLD’s Problem Resolution team to either resubmit their paper BEARs using the new version of the Form 472 (dated July 2013), or to cancel their outdated BEARs and resubmit online. Applicants choosing the first option may find it easier to use the type-in PDF version of the new Form 472 which is available in E‑Rate Central’s Forms Rack.

FCC Appeal Decisions Watch:

The FCC released the following three appeal decisions last week:

  • Academy Charter School et al (DA 13-1806) granting 34 requests for service delivery deadline extensions. In all cases, the FCC found that “the petitioners were unable to complete implementation on time for reasons beyond the service provider’s control, one of the criteria required by the rule for an extension of services implementation,” and that “the petitioners [had] made significant efforts to secure the necessary extensions.”
  • Academia Avance et al (DA 13-1849) denying 14 requests for relief from the 60-day appeal window deadline..
  • Bishop Stang High School et al (DA 13-1850) granting 18 requests for relief from late-filed Form 486s.

Schools and Libraries News Brief Dated August 30 – Non-Recurring Services

The SLD News Brief for August 30, 2013, reviews non-recurring services. Typically such services are for the installation of Priority 2 equipment, but could also include the installation of Priority 1 services. From an E-rate funding perspective, the key difference between recurring and non-recurring services is that recurring services (including Priority 2 maintenance) must be used strictly within the July–June funding year for which they are awarded. Non-recurring services may be used over a longer period extending at least until September 30th of the following funding year, and often until September 30th of subsequent years if the last date to receive service is extended (either automatically or upon request).

Last week’s News Brief stresses two important points about invoicing for non-recurring services:

USAC will not pay invoices for eligible non-recurring services delivered or installed after the last day to receive service (the service delivery deadline), or the last day your contract is valid (the contract expiration date), whichever is earlier.”

To avoid failing either condition, the News Brief stresses:

  1. Requests for extensions of the service delivery deadline must be made on or before that deadline. For some non-recurring FRNs, that deadline will be September 30, 2013. Current deadlines for non-recurring services can be checked using the SLD’s FRN Extension Status tool.
  2. Applicants are responsible for working with their service providers to extend contract expiration dates as required to meet extended service delivery deadlines. Equally important, if and when contract expiration dates are extended, applicants must notify USAC of the extensions by filing Form 500s. Note that filing a Form 500 does not, by itself, extend a contract. The Form 500 merely notifies USAC that the contract has been extended.
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.