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E-Rate Central News for the Week
May 2, 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

The revised filing deadline for FY 2016 applications is 11:59 p.m. EDT on Thursday, May 26th. Libraries and consortia, whose applications depend on the completion of related school district data, have been granted an additional eight-week extension to July 21st. As a result of the latter Form 471 deadline extension, the last possible date for libraries and consortia to file Form 470s for FY 2016 is June 23rd.

PIA review of submitted FY 2016 applications began last week. The first funding wave for FY 2016 should be released by the first week of June.

Wave 48 for FY 2015 will be released on Thursday, May 5th. Funding for FY 2015 is available for both Category 1 and Category 2 services at all discount levels. Cumulative funding for FY 2015 is $3.23 billion.

Updates on USAC’s E-Rate Productivity Center

EPC Overhaul Planned for FY 2018:

A quarterly meeting of USAC’s Schools & Libraries Committee, held last Tuesday, included an E-rate Productivity Center (EPC) Status Update. The topic, previously marked as “Confidential” and scheduled for the Executive Session, was first discussed in the preceding Open Session. The news was astounding.

USAC announced that the Appian-based, applicant-facing portion of EPC was to be completely redone for the FY 2018 application cycle, built on a new platform. The current Appian platform will continue be used on the backend to support internal USAC processing operations. Although we will have to await further details, this presumably means that:

  1. USAC has apparently concluded that the Appian platform does not have the flexibility, at least without an overly expensive rebuild, to address all the applicant-related problems that have arisen during the FY 2016 application cycle.
  2. USAC will continue to improve the current EPC system for applicant use during the FY 2017 application cycle, but that major changes to the applicant interface will be deferred until the new system is ready. As a practical matter, we expect applicants to have an easier time in FY 2017, than they did in FY 2016. This is likely because much of the required information on entities, connectivity, contracts, and ongoing FRNs is now largely in place.
  3. USAC has less than two years to implement a new applicant front-end system. This is an aggressive time-frame for IT development, but it provides a longer window than USAC had to develop the current EPC system.

PIA Inquiries and Responses:

USAC released a Special Edition News Brief on April 27th describing the new EPC-based process for PIA reviewers to pose Form 471 questions to applicants, and for the applicants to respond. USAC also plans to send PIA response instruction emails to all Form 471 application contacts.

We expect PIA outreach on submitted applications — if needed — to begin this week. Although many of the likely questions, if required, will be similar to those applicants have received in past years, the new inquiry and response system is completely different. As with other aspects of the EPC system, this will take some getting used to. As a start, we recommend reading the Special Edition News Brief carefully. (Note: The EPC-based RAL correction process discussed in this week’s regular News Brief, referenced below, is also new and should be reviewed.)

The most important aspect of the new PIA response process is that USAC will no longer send actual questions to applicants via email. Instead, USAC will send emails to the contacts advising them that questions are available through their EPC News fields. It is then up to the applicants to find the questions and respond.

The first new challenge, therefore, is finding the appropriate News feed. From an applicant’s landing page, as shown below, there are two links to News in the upper left-hand corner. The News tab, indicated by the red arrow, leads to an inexhaustible list of everybody’s News items. Searching for your own items takes some practice. The News activity, indicated by the green arrow, links to an applicant-specific list of News items. That’s where to start.

EPC news feed

The following is an example of a PIA inquiry as it appears in News. Note that it includes an abbreviated list of the topics included in the inquiry.

Example of an EPC PIA inquiry

To see the actual questions, click on the blue button at the bottom (labelled with the application’s nickname). This will take you to the “Review Inquiries” page, as illustrated below, showing “Pending Inquiries.”  Three buttons in the upper right-hand corner of this page link to the three options available at this stage. As discussed further in the Special Edition News Brief, the options are to:

  1. Request an extension on a question-by-question basis;
  2. Respond to the inquiries (including a file upload capability); or
  3. Submit a modification to the application.

At the bottom of the “Review Inquiries” example shown, there is a section (initially blank) labelled “Submitted Inquiries.”  Over time, as inquiries are answered, this section will expand to show the applicant’s responses (and the upper “Pending Inquiries” section will be updated).

EPC Review Inquiries

Strong FCC Denial of Invoice Deadline Extension Requests

Taking an unusually tough stance last week, the FCC denied FY 2014 Invoice Deadline Extension Requests (“IDERs”) submitted by 121 applicants (DA 16-448). In doing so, the FCC has set a high bar for determining what “extraordinary circumstances” might justify a waiver. Such circumstances apparently do not include:

  • Employee turnover, confusion, or lack of understanding of E-rate rules
  • Failure of service providers to approve BEARs by the deadline
  • Post-submission postmarking delays by the postal service or third-party couriers
  • Medical procedures or other family emergencies (of applicant staff or consultants)

The FCC’s decision is essentially a “we warned you” reminder of the new invoicing deadline rule enacted in the first E-rate Modernization Order (FCC 14-99, ¶ 238-242). The rule directed USAC to grant an automatic 120-day invoice extension to any applicant submitting an IDER — and here’s the catch — no later than the original invoice deadline. What the FCC is saying in this decision is that any applicant missing this deadline, by failing either to file a timely invoice or to file an IDER, has missed the chance to recover any otherwise valid discounts.

The FCC also moved to close off one temporary workaround of the strict invoice deadline or extension request requirements. Footnote #2 of the decision notes that USAC had already approved a number of blanket extension requests filed last fall by certain State E-rate Coordinators and other third-parties. Approval of these requests had provided some flexibility for individual applicants who had missed the IDER deadline. Henceforth, the FCC directed USAC to “only grant invoice extension requests from the service provider or billed entity associated with the invoices.”

Editorial: The FCC’s decision reminds us of a town board meeting story we heard years ago. The board was debating what to do about an exposed water pipe crossing between the banks of a small stream. Kids, playing in the area, were periodically breaking the pipe. Suggestions abounded for solving the problem including fencing off the area, electrifying the pipe, wrapping it with razor wire etc. The board ultimately agreed with a more practical suggestion to put in a stronger pipe.

In our view, E-rate needs stronger pipes to keep applicants — particularly small applicants — from leaking out of the system. The solution is stronger reminders, not severe penalties.

E-Rate Central encourages the FCC to reread its own groundbreaking 2006 Bishop Perry Order (FCC 06-54). An introductory portion of that Order, reflected throughout, sets forth a more enlightened view of what is needed in the E-rate program. It reads:

As we recently noted, many E-rate program beneficiaries, particularly small entities, contend that the application process is complicated, resulting in a significant number of applications for E-rate support being denied for ministerial, clerical or procedural errors. We find that the actions we take here to provide relief from these types of errors in the application process will promote the statutory requirements of section 254(h) of the Communications Act of 1934...by helping to ensure that eligible schools and librarie0s actually obtain access to discounted telecommunications and information services. In particular, we believe that by directing USAC to modify certain application processing procedures and granting a limited waiver of our application filing rules, we will provide for a more effective application processing system that will ensure eligible schools and libraries will be able to realize the intended benefits of the E-rate program as we consider additional steps to reform and improve the E-rate program.

Subsequent to the Bishop Perry Order, both USAC and the FCC took steps to make the E-rate process more forgiving. One example, at the USAC level, has been the late Form 486 warnings providing a second deadline. An example, at the FCC level, has been the FCC’s willingness to waive the Form 471 application deadline, particularly for applicants filing no more than two weeks late.

These actions by USAC and the FCC have focused primarily on the funding commitment side of the E-rate process, not on the ultimately more important disbursement side. This is where relief is now needed. Last week’s FCC decision is a giant step backwards. Hopefully, Petitions for Reconsideration will provide the FCC an opportunity to reverse themselves.

E-Rate Updates and Reminders

Losing a Friend at USAC:

We were sorry to read Mel Blackwell’s announcement last week that he would be retiring from USAC effective July 1st. Mel has been heading the E-rate program at USAC for the past eleven years and has been a real friend to the E-rate community. His reassuring presence in handling the implementation of the E-rate Modernization Orders and in coping with EPC challenges over the past year has been particularly appreciated. We wish him the best.

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 email address on the blog’s home page (under the USAC logo), and confirming the resulting email.

Post No.    Title

  1.       Add a Category Two Funding Request: Enter FRN Key Information and Service Type
  2.       Add a Category Two FRN Line Item: Product and Service Details
  3.       Add a Category Two FRN Line Item: Cost Calculation and Recipients of Service

FCC Releases Lifeline Modernization Order:

The FCC’s final Third Report and Order (FCC 16-38) to reform and modernize the Lifeline Program was released last week. As discussed in earlier newsletters, the Lifeline Program is one of four Universal Service Fund (“USF”) programs. It is separate from the E-rate Program, but there is an overlap in the reforms’ focus on broadband. A portion of the new Order, moreover, specifically addresses the need to close the “Homework Gap,” recognizing the difficulty of low-income family access to mobile and home Internet services for students.

A useful summary of the Lifeline Program changes was provided when the Order was adopted March 31st. The most fundamental change is the transition of Lifeline support (generally $9.25 per month per household), currently provided for voice telephone services, to broadband Internet services.*

The following aspects of Lifeline reform are likely to be most important to the E-rate community:

  1. Over time, as is the case with E-rate, Lifeline support for voice services will be phased out in favor of support for mobile and residential broadband Internet. The transition is scheduled to begin next year and is to be completed by 2021. It includes increasing minimum service standards for mobile broadband (transmission speeds and data packages). The starting point for fixed broadband services is 10 Mbps download and 1 Mbps upload.
  2. An interesting aspect of the mobile broadband transition is a requirement that carriers supported by Lifeline — and providing mobile devices — be required to offer at least one (to start) type of WiFi-enabled device to Lifeline customers that supports data services in WiFi hot spots. Lifeline customers using such devices may be able to access school and library networks.
  3. To be eligible for Lifeline subsidies, 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. Previously, NSLP participation by a family’s child was one of several approved validation measures. This will no longer be the case, but the reverse (a family’s participation in Lifeline) may prove a useful measure in determining NSLP eligibility.
  4. To determine Lifeline eligibility, the FCC is creating a third-party National Eligibility Verifier, managed by USAC, to be rolled out in the 2017-2019 timeframe. The system is explicitly to be designed to “function as an interface for authorized users for many different activities.”  This suggests that a new source of E-rate NSLP data may become available.

Form 486 Deadlines for May:

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 deadlines for May (adjusted for weekends and holidays) for approved FY 2015 applications are:

                                          Wave 31                05/06/2016
                                          Wave 32                05/13/2016
                                          Wave 33                05/23/2016
                                          Wave 34                05/27/2016

Schools and Libraries News Brief Dated April 29 – Submitting RAL Corrections

The S&L News Brief of April 29, 2016, reviews the process for making certain allowable corrections to a Form 471 application post submission, but prior to the issuance of an associated Funding Commitment Decision Letter (“FCDL”). In the past, an applicant submitting a Form 471 received a Receipt Acknowledgment Letter (“RAL”), and there was an established procedure for making “RAL Corrections.”

Under EPC, a “RAL” is not an actual letter; it is more precisely a reviewable link to an electronic version of the Form 471 in EPC. As might be expected, the allowable correction process within EPC is also new. Please read this News Brief carefully. It provides details on the EPC procedures necessary to:

  • Access the Form 471 you want to modify
  • Determine the modification(s) you want to — and can — modify
  • Submit a modification request

We will provide additional detail on RAL corrections in future newsletters.

 

* How these reforms are to be accomplished — although not the primary goal itself — were highly controversial along party lines within the Commission. A full 10% of the 224-page final Order includes detailed dissents by the two Republican commissioners. Conceivably, a change in the administration later this year could alter the implementation of Lifeline reform.
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.