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E-Rate Central News for the Week
March 14, 2016

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 website.

Funding Status

Wave 41 for FY 2015 will be released on Thursday, March 17th. Funding for FY 2015 is available for both Category 1 and Category 2 services at all discount levels. Cumulative funding for FY 2015 is $3.11 billion.

Updates on USAC’s E-Rate Productivity Center

Form 471 RAL Correction Process – Coming:

Last week’s USAC EPC webinar included a brief discussion of the Form 471 Receipt Acknowledgment Letter (“RAL”) process that will be implemented in EPC shortly — perhaps as soon as this week (check USAC’s next News Brief). Historically, USAC has mailed a RAL to any applicant submitting a Form 471. The paper RAL summarized the Form 471 information and provided the applicant with an opportunity to correct certain fields.

Beginning this year, the entire RAL process will be done through EPC. Once a Form 471 is submitted, a RAL notice will appear in that applicant’s “News” feed (upper left-hand tab on the EPC screen). It appears that the applicant can propose RAL corrections essentially by reopening the Form 471 and updating selected fields. USAC must approve such corrections — and, in the process, may require additional information from the applicant — before any changes take effect.

Once the RAL process is implemented within EPC, an applicant who has already submitted a Form 471 will have to find the associated RAL. At first, this may seem a daunting task given the multitude of items listed in everyone’s “News” feed. USAC’s suggestion is to narrow the list by typing “Receipt Acknowledgment Letter” in the “Search news” box. Searching for the actual Form 471 number may work even better.

Workarounds for EPC System Errors:

USAC is aware of several errors in the EPC system, most of which should be corrected shortly. In the interim, there are often workarounds. Two particular errors noted by Form 471 applicants last week can be resolved as follows:

  1. Some applicants participating in the Community Eligibility Program (“CEP”) may notice that a CEP percentage, expressed to two decimal places, is always rounding down to the lower whole number percentage. In many cases, when multiplied by the 1.6x factor, this rounding error is immaterial (particularly for a school with 100% CEP eligibility). But occasionally, at the margin, the error can lead to a 5%, 10%, or even 20% swing in an applicant’s discount rate as shown in a Form 471 as it’s being drafted. Such an error does not affect an applicant’s ability to complete a draft Form 471, but we suggest waiting for a system fix before actually submitting an application with an incorrect discount rate.
  2. Applicants working on Category 2 Form 471s are encountering the following message:

EPC system error
This is not a real error and can be ignored.

Consortium Application Member Lists:

As of FY 2015, the discount rate for all FRNs in an individual consortium application is calculated as the average of the discounts for the members included in that specific application. As a result, a consortium applicant may file multiple applications, each with a different discount rate based on a different subset of members. What is important is that any specific application include only those members using the services covered by that application. If a consortium tries to include members, not listed as recipients of services in at least one FRN on the application, EPC will display an error message such as the following indicating that extra members have been included and should be removed:
EPC ERror Details
One unfortunate aspect of this error message, at least currently, is that the members to be removed are designated by internal EPC entity codes (in the form 33xxxxx) rather than by their actual member BENs. The trick is to not include any extra members from the start.

E-Rate Updates and Reminders

FY 2016 Application Window is Open:

The Form 471 application window for FY 2016 opened on February 3rd. The window is scheduled to close at 11:59 p.m. EDT on Friday, April 29, 2016. The entire application process for FY 2016 is being handled through USAC’s new EPC portal with its own learning curve. Please do not wait until later in the window to file Form 470s, update pre-471 EPC applicant profile information (entity, student, connectivity, and contract data), and begin the Form 471.

As we get closer to the end of this month, applicants will begin seeing warnings that the last possible day to file a valid Form 470 for FY 2016 is April 1st. This date is significant because it is 28 days — the minimum Form 470 posting period — before the April 29th Form 471 deadline. Every year, we urge applicants not to wait until the last possible day to file a Form 470. If you do, you will have to pick your vendors, sign contracts, and complete and submit your Form 471 application on the last day of the window. With this year’s EPC filing complexities, this is a recipe for disaster. When it comes to filing a Form 470 for FY 2016, remember these words:
April 1st is April Fool’s Day!

File Along with Me Updates:

A USAC blog, “File Along with Me,” initiated in early February, provides additional information on the application process. Links to last week’s postings are provided below. You can subscribe to the blog by entering your e-mail address on the blog’s home page (under the USAC logo), and confirming the resulting email.
Post No.    Title

  1.         Set Your Evaluation Criteria: How To Make a Matrix
  2.         Let's Talk State Master Contracts and Mini-Bids
  3.         Keep Records of Everything! Plus a Note on Gifts

Middletown CPN Waiver Comments:

As noted in our previous newsletter of March 7th, the Enlarged City School District of Middletown (NY) filed a petition for a limited waiver of the FCC’s rules, which prohibit terminating carriers from passing the calling party number (CPN) to the called party where a privacy indicator has been triggered by the caller. Strictly enforced, CPN rules prevent schools and law enforcement agencies from identifying the source of threatening calls in a timely manner.

The FCC, which has requested comments (DA 16-234) on Middletown’s petition, appears to be considering a modification of the CPN restrictions to more broadly address, with protections, the ability of other schools, school districts, and law enforcement agencies to deal with such calls. Comments are due this Wednesday, March 16th. Reply comments are due the following week on March 23rd.

Lifeline and the Homework Gap:

One of the areas of increasing concern to a number of schools, but one not addressed by E-rate, is the affordability of off-campus Internet to support one-to-one initiatives and/or residential Internet services to help students complete online-based homework assignments. Several FCC Commissioners, most notably Jessica Rosenworcel, have spoken passionately about the “homework gap” problem.

The FCC is now poised to provide at least some help to make broadband more affordable for all. In its next open meeting on March 31st, the FCC will consider an order to restructure its Low Income (Lifeline) program. Lifeline is one of the four Universal Service Fund (“USF”) programs (E-rate being another). It has traditionally been used to help subsidize voice telephone services for low-income families. The proposed restructuring would allow qualifying families to apply their $9.25 monthly subsidies, traditionally used only for voice services (wired or wireless), to fixed or mobile broadband services (or a bundle of voice and data services). Connected Nation has provided an excellent summary of the proposed Lifeline changes.

In a related action last week, President Obama announced a ConnectALL initiative supporting the FCC’s proposed Lifeline changes. The initiative also included steps to deliver digital literacy skills, increase access to affordable devices, develop a tool to support broadband planning, and involve private and philanthropic sectors in the effort.

Several aspects of the proposed Lifeline changes may eventually impact the E‑rate program. In particular:

  1. Similar to the restrictions on certain E-rate services, Lifeline providers must currently be certified as eligible telecommunications carriers. To expand the base of those offering eligible services, the FCC proposal would create a new “Lifeline Broadband Provider” category. Additional flexibility for Lifeline providers might set a precedent for E-rate telecommunications providers.
  2. To determine whether a low-income household is eligible for a Lifeline subsidy, the FCC plans to create a third-party National Eligibility Verifier. To be eligible, a household’s income must be at or below 135% of the Federal Poverty Guidelines. This is well within the 130–180% range for reduced-price lunch eligibility used for E-rate purposes. This suggests that a new source of NSLP data may become available.
  3. Any increase in funding to USF programs as a whole is a concern. Lifeline payments are currently about $1.6 billion per year, but would be expected to grow as more households take advantage of the new broadband options. The FCC’s proposal would cap Lifeline payments at $2.25 billion — a number familiar to E-rate historians — plus an inflation adjustment. An increase to this level would add over 1% to the USF contribution factor (see following article).

Proposed 2nd Quarter USF Contribution Factor:

The FCC indicated (DA 16-266) that the proposed USF contribution factor for the second quarter of 2016 will be 17.9%, only slightly lower than the historically high 18.2% of the current quarter.

The key point to note — discussed in more detail in our newsletter of December 28, 2015 — is that the primary reason that the contribution factor hasn’t yet risen to over 20% is that the FCC carried forward $1.9 billion of previously unused funds into FY 2015. As a result, new USF contributions needed to cover the remaining FY 2015 demand have been well under the $3.9 billion cap established by the FCC in December 2014. Full E-rate funding — and now potentially higher funding for the Lifeline program, discussed above — would likely raise the demand for USF funding to an unsustainable level.

USAC EPC Webinars:

USAC completed the latest of a series of webinars on EPC last week. Recordings of these webinars (and other training videos) are available in USAC’s Online Learning Library.

Form 486 Deadlines for March:

The Form 486 deadline for certifying the start of service (and CIPA compliance, if applicable) is 120 days from the later of the FCDL approval date or the start of service date. The remaining March deadlines (adjusted for weekends and holidays) for approved FY 2015 applications are:
                            Wave 25                03/15/2016
                            Wave 26                03/21/2016
                            Wave 27                03/29/2016

Schools and Libraries News Brief Dated March 11 – Three EPC Topics

The S&L News Brief of March 11, 2016, discusses three separate EPC-related topics.

USAC Public School Entity Updates:

This week’s “Tip of the Week,” addressed to public school districts, is to “please help libraries and consortia by updating the information in your profile.”  The reason this is so important is that the discount rate information for library and most consortium applications in FY 2016 depends upon the completeness of the NSLP data for district schools. If that data is not available, the associated libraries and consortia cannot complete their applications.

As a partial remedy for this problem — essentially a temporary fix — USAC announced that it will begin to update critical blank fields in school profiles by entering:

  • Urban/rural designations (using “urban” as the default, if necessary)
  • Zero (“0”) for the number of part-time and peak part-time students
  • “None” for the alternative discount method
  • Public/private designations

Eliminating these blanks in school profiles will permit affected libraries and consortia to move forward with their applications. Should applicants, whose profiles are affected by these changes, subsequently override USAC’s default entries, those updates will ultimately flow through to the discounts of the library and/or consortium applications.

New Form 471 Download Tool:

USAC has developed a new non-EPC tool to download Form 471 data. In one sense, this is a FY 2016 version of USAC’s familiar Data Retrieval Tool (“DRT”) to be used to capture completed application data from within EPC. Compared to the DRT, it has some advantages and some disadvantages.

On the plus side, the new tool provides more detailed application data including FRN line item and recipient of service detail. It also includes connectivity data from the applicant’s EPC profile. On the flip side, the tool generates a statewide Excel file splitting the available information into seven separate spreadsheet tabs. A few fields, such as entity attributes and Form 470 numbers, are not yet available.

Common EPC Questions, Part 4:

The last section of the most recent News Brief continues a series of EPC Q&As begun three weeks ago. The new questions are:

  1. I am a library system. How do I make sure my libraries, non-instructional facilities (NIFs), and annexes are correct and complete in EPC?
  2. I am a school district. How do I make sure my schools, non-instructional facilities (NIFs), and annexes are correct and complete in EPC?
  3. I am a consortium. How do I make sure my list of members is correct and complete in EPC?

The short answer to all three related questions is to choose “Additional Information” from the left-hand menu, then “Related Organizations” from the “Category” dropdown, and either “Related Entities” or “Consortia Members” from the “Relationship Type” dropdown.

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.