Upcoming E-Rate Dates:
| October 25 |
USAC webinar providing an introduction to EPC for new applicants. |
| October 26 |
FY 2017 Form 486 deadline for funding committed in Wave 56. |
| October 29 |
FY 2018 Form 486 deadline for funding committed in Waves 1–12 (all issued before July 1st).
Note: Applicants missing any Form 486 deadline should watch carefully for “Form 486 Urgent Reminder Letters” in EPC. These Reminder Letters afford applicants 15-day extensions to submit their Form 486s without penalty.
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| October 29 |
Invoice deadline for FY 2017 recurring services. Note: For applicants and service providers unable to submit invoices by this date, October 29th is also the deadline for filing 120-day Invoice Deadline Extension Requests (“IDERs”). |
Three FCC Decisions:
The FCC issued three E-rate decisions last week, each interesting and unique in their own way.
DA 18-1055 dismissed and denied a petition for reconsideration by the Detroit Public School District regarding previously denied applications for FY 2013-2015. USAC’s denial had been based on the district’s failure to consider the price of eligible services as the primary factor.
The district’s analysis and weighting of the price of competing bids for FY 2013, the initial year of the 3-year contract, clearly raised questions. Vendor A, with a 3-year cost of $3,834,900, was awarded 30 price points. Vendor B, with a 3-year cost of $3,620,550, was awarded only 20 price points. Part of the discrepancy in this comparison may be attributed to the district’s determination that $790,000 of Vendor B’s package price was deemed ineligible. As a result, the net post-discount cost to the district of Vendor A’s service would have been less. The point to be stressed from the Detroit decision is that ineligible costs may be considered in bid evaluations, but must be considered separately from, and weighted lower than, eligible costs.*
DA 18-1056, with one minor exception, denied a series of appeals and waiver requests by Connect2 Internet Network, Inc. tracing back to FY 1998-2000. Following a 2002 investigation by the FBI, Connect2 voluntarily admitted to numerous E-rate violations effectively providing free services — i.e., requiring no non-discount payments — to a number of New York private schools. As part of a plea agreement, the owner forfeited $290,000 to the U.S. Treasurer and was debarred from the E-rate program. USAC then issued COMADs to Connect2 for improperly disbursed payments. Efforts to recover these funds has obviously dragged on. In this decision, the FCC:
- Denied four appeals as being late. It rejected the company’s contention that the lateness was excusable to the extent that correspondence had been addressed to the debarred and ill owner.
- Rejected the company’s contentions on the other appeals that recovery is (a) required only for statutory violations; (b) barred under the owner’s pleas agreement with the Department of Justice; and/or (c), are de minimis amounts.
DA 18-1060 granted two waivers of the operational deadline for the special construction of fiber networks. Under the 2014 E-Rate Modernization Orders, new fiber networks must be in full operation (i.e., with lit fibers) by June 30th of the funding year for which such networks were approved. Note that this service delivery deadline, unlike that for other non-recurring services, does not provide an extra three months to September 30th of the following year. The FCC rules, however, do grant USAC the authority to extend the fiber operation deadline for one year upon a showing of good cause — often including delayed approval of the fiber applications, a common occurrence.
In last week’s decision, both applicants with delayed approvals of FY 2016 applications, had already received extensions to June 30, 2018, but still needed more time. Both waivers granted reflect the FCC’s understanding of construction issues associated with large fiber builds but illustrate the need for clearly documenting requests for additional extensions.
The Jemez Pueblo Tribal Consortium’s network was 90% complete by last June but sought an additional two-month extension from USAC to finish. USAC punted the request to the FCC. The Consortium explained that the project was scheduled for completion by June but had been delayed by the State pending the completion of an archeological survey. The survey — and the network — were finished by the end of July. The FCC approved an extension to July 31, 2018, so that USAC can process the last invoices.
The Grants/Cibola County School District’s request reflected extensive delays in USAC’s review process. Although the district’s initial FY 2016 was funded in January 2017, USAC asked additional questions in April 2017. Pending reaffirmation of funding, Grants/Cibola requested and received a one-year deadline extension to June 2018. USAC did not complete its post-approval review of the Grants/Cibola fiber funding until August 2018 — 16 months later! USAC, apparently unauthorized to further extend the deadline, denied the district’s request for a second extension. The FCC granted an extension through April 2020 giving the district a full 18 additional months to complete the project.
Other applicants facing delays with fiber network construction are warned that the FCC emphasized “the limited nature of this decision” and that the relief in these two cases was deemed “warranted based on the specific facts and circumstances of these requests.”