News of the Week

Last Monday’s Wave 21 for FY 2016 totaled $66.3 million. Cumulative national funding through Wave 21 is $1.04 billion. Wave 22 is scheduled for release this Monday, November 21st.

Following the release of Wave 21, USAC provided an update on the status of FY 2016 applications requesting funding for special construction and other newly eligible fiber equipment and services. USAC indicated that all such applications are following a “different review track,” and all are at least in the initial review stage. As indicated in our newsletter of November 7th, we had first seen approvals of these types of applications in Wave 19.  The current status, as of Wave 21, is summarized in the table below.

Clarifications on Form 486 Cancellations and Re-Filings:

As reported last week, USAC’s News Brief of November 11th discussed how to handle an incorrectly filed Form 486. Errors most frequently resulted as a result of wrong service start dates or CIPA certifications. Once a Form 486 is certified, it can no longer be modified. To file a correct Form 486, the incorrect Form 486 must first be canceled.

USAC has advised that the cancellation of a Form 486 is a manual process. Any applicant requesting that a Form 486 be canceled — either by creating a customer service case within EPC or by calling the Client Service Bureau (“CSB”) at 888-203-8100 — should check, or wait to be notified by USAC, that the incorrect Form 486 has actually been canceled before attempting to file a new Form 486.

One potential issue with filing a corrected Form 486 could arise if the re-filing takes place after the applicant’s Form 486 deadline. Please note the following:

1. At the moment, this is not a problem. Although the initial Form 486 deadline for applicants funded in Waves 1-4 has already passed, USAC has not yet issued its first batch of Form 486 reminder emails (see discussion in the Update section below). Those reminder emails, when sent, will effectively extend the Form 486 deadlines 15 days.
2. We have been assured informally that a re-filed Form 486 will be treated as having been received as of the date of the original Form 486. If implemented unconditionally, this procedure would eliminate a potential deadline problem. We would not be surprised, however, to see USAC institute a re-filing deadline when confirming cancellation of the original Form 486.

FY 2015 Invoice Deadline Extension Corrections:

USAC’s View FRNs with Extended Deadline tool yields interesting disparities of new invoice deadline dates for FY 2015 recurring service FRNs. As illustrated below, most are either 02/25/2017 or 02/27/2017. The same dates are shown for these FRNs in the Data Retrieval Tool (“DRT”) and the Invoice Deadline Extension Request section of the Online BEAR tool.

February 27th is the correct deadline for these FRNs. February 25th is a Saturday. When a calculated deadline falls on a weekend or holiday, the real deadline becomes the following business day. The reason some applicants received February 25th as the extended date, and others received the correct February 27th, appears to have depended upon how the extensions were requested and processed. Those using the “Submit a Question” channel to request extensions for one or more FRNs, were notified that their extended deadlines were 02/25/2017. That date was calculated as 120 days from the original invoice deadline of 10/28/2016 without regard for the weekend. Those using the new “Deadline Extension” feature in the online BEAR system found that their FRNs were properly extended to 02/27/2017.

We understand that USAC will be sending corrected invoice extension notices showing the correct 02/27/2017 date via email to affected applicants and service providers.

Invoice Deadlines for Late-Wave Funded FY 2015 FRNs:

Applicants receiving late FY 2015 FCDLs, particularly the most recent Waves 65-69, should check USAC-reported invoice deadlines carefully. We are finding errors in these deadline dates in the FRN Extension and Online BEAR tools, and sometimes in the DRT. Fortunately the errors, when they occur, indicate earlier invoice deadlines than are correct. Actual deadlines are important, however, when filing BEARs, SPIs, or IDERs late in the invoice cycle.

The invoice deadline, unless extended, is 120 days from (a) the last date to receive services (June 30th for recurring services) or (b) the date of the Form 486 Notification Letter, whichever is later. Incorrect deadlines we have seen are apparently calculated by adding 120 days to the application approval (or “FCDL”) dates. For example, FY 2015 FRNs approved in Wave 67, dated 10/27/2016, are being listed with invoice deadlines of 02/24/2017, i.e., 120 days later. The actual deadlines for these FRNs could be four plus months later depending upon when the associated Form 486s were filed and approved.

Upcoming 2016 E-Rate Deadlines:

Controversial FCC Actions during the Transition:

The FCC has received a letter from Chairman Fred Upton of the House Energy and Commerce Committee and Chairman Greg Walden of the House Subcommittee on Communications and Technology, and a letter from Chairman John Thune of the Senate Commerce, Science, and Transportation Committee, calling on the FCC to halt action on “controversial” items during the transition period. A similar request was made and honored eight years ago during the last change of administrations. The two current Republican Commissioners, Michael O’Rielly and Ajit Pai, expressed hope that Chairman Tom Wheeler would comply with the request. As an initial step, the FCC removed four items which had been scheduled for consideration at last Thursday’s open meeting.

Although no major E-rate orders are expected over the next two months, it is worth noting that the Republican Commissioners, currently in the minority, had dissented on both E-Rate Modernization Orders in 2014 (see our newsletter of November 14th). Technically, the request for inaction can be read as applying only to FCC orders at the full Commission level. Adherence to a broader interpretation could delay any bureau-level clarifications and appeal decisions if deemed controversial.

Education Superhighway’s Internet/WAN Cost Comparison Tool:

Education Superhighway (“ESH”) released the full version of its Compare & Connect K-12 tool providing rough comparisons of Internet and WAN connection charges in a geographic area. It is based on cost, circuit, and bandwidth data that ESH has been collecting and attempting to validate over the past few years. Although data is shown only for selected districts, the comparisons should prove useful in evaluating pricing proposals in a similar geographic area. The FCC may also find it interesting in exploring carrier compliance with its Lowest Corresponding Price (“LCP”) rule.

The tool includes two separate maps of a given geographic area, one for Internet and one for WAN circuits. Shown below are the WAN and Internet pricing maps for a 10 mile radius around our home office in Westbury, NY. In this area, ESH has what it considers reliable data (tagged orange for WANs and green for Internet) on about half the districts.

Note that the summary data within each tag shows both price and bandwidth for WANs, but only price per megabit for Internet (often a misleading number when the pricing relationship for Internet service is not linear).

More detailed data on a specific district can be found by clicking on an individual district tab, then on the “View all services for this district” link.

USAC’s Schools and Libraries News Brief of November 18, 2016, discusses a procedural change which will take effect January 30, 2017, regarding appeals of service start dates resulting from late-filed Form 486s. The procedural change is the result of the FCC’s Archdiocese of New Orleans Order (DA 16-1205) issued last month (see our newsletter of October 24th).

To review:  The normal deadline for filing a Form 486 is 120 days from the later of (a) the start of service (typically July 1st), or (b) the funding commitment date. If a Form 486 is filed late, USAC will reset the service start date to 120 days before the actual filing date, and will adjust any recurring service funding commitment amount accordingly, even to zero.

Under current procedures, the FCC would accept and eventually grant appeals of funding rejections due to late-filed Form 486s as long as the applicants provided reasonable explanations for the filing delays. As of January 30th, appeals will be accepted only if filed within 120 days of the last date to receive services. For recurring services, that appeal deadline date is October 29th of the following funding year. Applicants, needing to file appeals on late-filed Form 486s for FY 2015 (or earlier), should file them before the new procedure becomes effective on January 30th.

There is one theoretical exception to the new appeal deadline. It does not apply in the case of “extraordinary circumstances.”  The only problem with this exception is that the FCC’s interpretation of “extraordinary” sets an extraordinarily high bar. Over the past year, under a similar exception, the FCC has not granted a single request to waive the deadline for filing an invoice deadline extension request (“IDER”).