News of the Week

FY 2016:

Last Monday’s Wave 19 for FY 2016 — including at least one approval for self-provisioned fiber (see below) — totaled $89.9 million.   Cumulative national funding through Wave 19 is $923 million. Wave 20 is scheduled for release this Monday, November 7th.

FY 2015:

USAC will release Wave 69 for FY 2015 on Thursday, November 10th. Cumulative funding through Wave 68 is $3.31 billion.

The first approval we’ve seen for self-provisioned fiber, a newly eligible service for FY 2016, was included in last Monday’s Wave 19 funding. Congratulations to Marshfield School District in Wisconsin — and to USAC — for blazing the trail. The funding approval, coincident with a denial, provides several useful lessons for other applicants.

1. The procurement process is important. The FCC rules require that applicants requesting self-provisioned and/or leased dark fiber also bid for (and compare) lit fiber services. Marshfield’s Form 470 included the lit fiber alternative.
   
   
   Although not specifically required by FCC rules, our recommendation to applicants considering self-provisioned fiber is to bid all three eligible options: lit fiber, leased dark fiber, and self-provisioned fiber.
2. The self-provisioned request referenced an RFP, but the lit fiber request did not. This was not problematic in this case, largely because fiber was required only between two points specified in the “Category One Narrative.”  For a more complex network, more detailed RFP documents would be necessary for both lit and self-provisioned systems.
3. As reflected in Marshfield’s RFP, the district was requesting a 12-strand fiber. Its Form 471 application, as approved, likewise indicates 12 E-rate eligible strands. The eligibility of special construction fiber charges, however, ultimately depends on making such fiber operational by the end of the funding year (see our newsletter of October 3rd). It is unclear how USAC will react if less than 12 strands are lit. USAC guidance has indicated that less than total strand usage requires cost allocation, but has not specified a strand allocation methodology. Arguably, since a 12-strand fiber is generally considered a minimum building block of a fiber system, the cost differential for lighting 12 strands, or less, would reflect only terminating equipment costs.
4. The critical aspect of terminating equipment, also eligible as Category 1, is that it must be bid for, and applied for, separately. Marshfield applied for funding of its terminating equipment, but was denied. As shown in the illustration above, equipment was not listed in the Form 470 (or in the RFP). To properly bid terminating fiber equipment, we recommend including a separate line item in the Form 470, specifying “Other” as the function, and listing the required equipment in the free-text “Other Function Description” field and in an RFP document.

Invoice Deadline Updates:

The “Extended Invoice Deadlines” and “Tracking Invoice Extensions” articles in our newsletter of October 31st discussed several issues involving the FY 2016 invoicing deadline for recurring service FRNs and on the tools for tracking those deadlines. Note the following updates:

1. Both the invoice deadline and the Invoice Deadline Extension Request (“IDER”) deadline were extended from October 28th to October 31st. BEARs, SPIs, and IDERs submitted by 11:59 pm EDT were accepted as timely filings.
2. Approved IDERs have a new deadline for the associated FRNs of February 27, 2017, based on the original October 28th deadline. The new deadline is actually 122 days after October 28th because the 120th day falls on a Saturday in February. Had the new IDER deadline been calculated using the extra three-day invoice filing extension, it would have been February 28th — it’s not.
3. The buffer limitation problem for FY 2015 in USAC’s Display FRN Extensions tool has been corrected. The tool now shows the correct Last Allowable Date for an Invoice with most entries now showing the new 02/27/2017 date. Over 30 thousand invoice deadlines have already been extended for FY 2015, approaching 25% of funded FRNs.
4. The current list of approved IDERs does not reflect outstanding bulk IDER requests submitted earlier, but not yet processed. We suspect that many of the FRNs included in the bulk requests were subsequently submitted, and approved, individually using the new FRN Extension facility within the BEAR tool. If this is the case, the associated pending requests will be denied as duplicative.

Form 498 Voided Check Uploads:

Completing a Form 498, used to provide bank routing data to USAC in order to receive electronic reimbursements, is a two-step process. Step 1 is to complete and certify the Form 498 itself online within EPC. Step 2 is to get the Form 498 approved by working with USAC to validate the bank routing information. Most commonly, validation involves sending a copy of a voided check to USAC.

One way to complete the approval process is to wait for USAC to request a voided check. A faster way is to proactively send a copy of the voided check as soon as the Form 498 is certified, not waiting for the request. USAC has provided a secure upload link to send the voided check electronically. The link, recently updated to resolve occasional server problems encountered by applicants is https://efile.universalservice.org/ContributorManagement/V1/BankValidation (note change highlighted in yellow). 

Upcoming 2016 E-Rate Deadlines:

The next Form 486 deadline for FY 2016, for those applicants funded in Wave 3, is Monday, November 7th. More generally, the Form 486 deadline is 120 days from the FCDL date or the service start date (often July 1st), whichever is later. This means that Form 486 deadlines for funding commitments received in later waves will follow at roughly one week intervals, including the following November deadlines:

Wave 4        11/14/2016
Wave 5        11/21/2016
Wave 6        11/28/2016

Two special points should be noted regarding the Form 486 deadline.

1. Under current FCC rules, applicants missing the normal Form 486 deadline are given a second chance. Previously, such applicants would be sent Form 486 Urgent Reminder Letters giving them an additional 20 days to submit their Form 486s. “Reminders” will again be used for FY 2016, probably starting later this month, but will be sent via email rather than by regular mail.
   
   Important note:  Because USAC will be issuing Form 486 reminders by email, rather than by regular mail, the additional time allowed for submitting late Form 486s is now 15 days, not 20 days. The previous process had allowed 5 extra days for postal delivery.

2. Consortium applicants filing Form 486s should remember that CIPA compliance, if required, is acknowledged indirectly by certifying that all consortium members have already submitted Form 479s. The Form 479s, certifying each member’s compliance with CIPA, are paper forms collected by the consortium leaders (i.e., not filed with USAC). This collection process needs to occur before the consortia file their Form 486s. Consortia, if audited, must be able to produce those Form 479s.

Off-Campus Internet Comments:

Initial responses were filed last week to an FCC Public Notice (DA 16-1051) seeking comment on two petitions requesting rule changes, clarifications, or waivers to permit limited off-campus use of E-rate supported Internet access. The goal of both petitions is to help close the “homework gap” — the inability of students, particularly those from low-income families, to access increasingly necessary broadband Internet services outside of their schools.

The two petitions, filed by Boulder Valley School District and a group of other petitioners headed by Microsoft, sought relief from the FCC’s cost-allocation rules otherwise reducing E-rate support for school-based Internet facilities if used at home by selected students.

Responses to the Public Notice may be found using the FCC’s Search for Filings (Docket 02-6). The comments received all recognized the need to address the “homework gap,” but diverged as to the wisdom of using the E-rate program as a vehicle for doing so. In general, the educational community supported the petitions (e.g., ALA, SETDA, CCSESA, NYCDOE, and the Benton Foundation), whereas the carriers argued for the continued reliance on other Universal Service Fund programs (e.g., USTA, NTCA, WISPA, and ITTA).

One of the more balanced responses, filed by the State E-Rate Coordinators’ Alliance (“SECA”), supported the waiver of E-rate cost-allocation rules for trial purposes, discussed the importance (albeit potentially administratively burdensome) to limit off-campus usage to truly “needy” students, and suggested a broader FCC inquiry into these and other approaches to addressing “homework gap” issues.

The reply comment deadline on this proceeding is December 5, 2016.

USAC Rebranding:

First noticed during this fall’s applicant training, the new USAC logo appeared on all of its websites last week. Starting more with style than substance, but with a promise of the latter, the USAC Home page announced “We are giving universal service a new look. This is just the first step in a process to streamline the experience for applicants and providers, and make universal service programs simpler to access.”

The old logo:

The new logo:

One early impact of the change, beside the website updates, may be an increase in USAC’s expenditures for cyan print cartridges.

File Along with Me:

A link to last week’s “File Along with Me” posting is 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

63.       Form 498 and the BEAR Method (Part 2): Receive Direct Reimbursement

USAC Fall Training Schedule:

The locations and dates for USAC’s remaining regional trainings are listed below. For registration information, see Trainings & Outreach.

Slides for the St. Louis training have been posted on the USAC website.

USAC’s Schools and Libraries News Brief of November 4, 2016, provides updated information on the following three topics:

• USAC’s FRN Status Tool has been substantially expanded to show information on all FY 2016 applications and FRNs (see our newsletter of October 31st). The tool can be used much like USAC’s existing Data Retrieval Tool (“DRT”) for funding years FY 2015 and earlier.
• The Form 486 deadlines for applicants funded in the early FY 2016 waves are already upon us (see November deadlines discussed above). The first set of Form 486 Reminder Letters is expected to be released shortly and will be announced in a News Brief.
• New Personal Identification Numbers (“PINs”), recently released by email to speed delivery prior to last week’s invoice deadline, will subsequently be issued under the previous process using secure postal mailers.