News of the Week

USAC released Wave 16 for FY 2019 on Thursday, August 8th.  Funding totaled $85.4 million.  Cumulative commitments through Wave 16 are $1.31 billion.

EPC IT Development Schedule:

The USAC Board of Directors met on July 30, 2019.  The Information Technology Update (pages 24-32) highlighted the two following mission critical objectives for the Schools & Libraries Program for the remainder of FY 2019:

A second more detailed timeline for calendar 2019 showed work on the Form 471 to reflect the forthcoming Category 2 rule changes beginning in November.  With public reply comments on the Category 2 NPRM due September 3rd, this presumes rather quick action by the FCC.  If this does not happen and if the Form 471 changes cannot be completed until later in 1Q20, as suggested by the table above, the application window for FY 2020 may not open early in January as has been the recent practice.  Notably, USAC did express confidence that it could accommodate any necessary changes in a timely manner — perhaps understanding and/or hoping that prospective changes would not be complex.  Rules to reset all five-year Category 2 budgets as of FY 2020, if adopted, could simplify the necessary changes.

Reference to a plan to modify the Form 470 — “to include stakeholder input” — is a welcome development long needed to eliminate and/or clarify fiber versus non-fiber options in the Category 1 pulldown menu that have been confusing applicants for several years.  Other Form 470 changes may be required to conform the Category 2 menu to potential rule changes, whatever they may be.  Modifications are expected to be made well in advance of the targeted implementation date of the FY 2021 Form 470 which is July 1, 2020.

This Week’s EPC Deployment News:

Please see the information below on USAC’s News Brief of August 9th discussing the following three EPC and related procedural updates:

• New Form 498 business type requirement
• New entity conversion procedures
• Availability of the “current” Form 471 PDF

Upcoming E-Rate Dates:

Continued Uncertainty on Product Demo Rules:

Here we go again — new year; possibly new guidance; more new questions. 

2018 in review:

• In May 2018, USAC updated the Gift Rules section of its website to state: “Applicants may not accept gifts with a retail value greater than $20, which include but are not limited to gifts for attending seminars; marketing calls; loans of products, including those characterized as on-site product demonstrations; services or equipment; or trainings.” [emphasis added]
• In a June website update on the Service Provider’s Role, subsequently confirmed in an August webinar on competitive bidding, USAC indicated that product demonstrations are acceptable if they are provided before an applicant posts a Form 470. 
• In response to a question posed in USAC’s fall applicant training in early December, USAC clarified that “demos are OK; gifts are not.”  The clear indication was that longer-term “loans” of equipment would be considered gifts, but shorter-term demos meant as product trials were fine. 
• Later in December, in the hope of resolving this issue, the Schools, Health & Libraries Broadband Coalition (“SHLB”) wrote to the FCC formally seeking clarification that product demos are not gifts.  The SHLB letter asked the FCC to direct USAC to remove the existing product demo language from its website. (Note: it’s still there.)

Fast forward to last week’s USAC’s two service provider training workshops in Washington, DC.

On Tuesday, in a session on advanced program compliance, USAC shared and discussed the following slide.  It indicated that product demos may be conducted for a maximum of two weeks after an applicant posts a Form 470.  In response to a question, USAC suggested that a similar two-week limit would apply to pre-Form 470 demos.

By Friday, when the training was repeated in the second session, the demo slide had been eliminated — both from the live presentation and from the online PowerPoint slides.  For the moment, we’re back where we started.

Applicants and service providers should expect — and deserve — more formal guidance on the E-rate rules governing product demos.  Pending additional clarification, we suggest the following guidelines:

• Always remember that the underlying principle of all E-rate bidding rules and procedures is fair and open competition.
• Any product demo opportunity given to one supplier should be afforded to others.
• Product demos are for demonstration purposes only; they must not be considered equipment loans.
• Unless and until the most recent guidance is changed and/or further clarified, limit product demos to two weeks prior to any related contract awards.
• Fully document any product demos with logs and/or memos of understanding as to each demo’s timeline including the dates of the receipt and return of the equipment, purpose, and evaluation results.

USAC’s Schools and Libraries News Brief of August 9, 2019 discusses three EPC deployments implemented over the past weekend — one requiring updates to applicant and service provider Form 498s.

New Form 498 Business Type Requirement;

The Digital Accountability and Transparency Act (“DATA Act”) of 2014 aims to make information on federal expenditures more easily accessible by, in part, establishing government-wide standards for identifying entities receiving funds.  As now being implemented within the E-rate program, this will require updates to applicant and service provider Form 498 records to indicate each organization’s business type.  USAC will also be asking Form 498 filers to update missing or incorrect DUNS numbers. 

The News Brief indicates that USAC will be sending emails this Monday with Form 498 update instructions.

New Entity Conversion Procedures:

Effective Monday, USAC will be implementing new procedures for changing from one entity type to another within EPC.  In general:

• Changes for an individual school or library from dependent (part of a school district or library system) to independent (acting on its own) and vice versa are allowable and can be requested and processed.
• For other entity-type change requests, the entity must obtain a new Billed Entity Number (BEN).
• Going forward, entities that make a change from independent to dependent will retain their independent status for the funding year(s) in which they were independent.

USAC indicates that it is working on a separate project to correctly align entities who changed their status from independent to dependent before this deployment.

Availability of the Current Form 471 PDF:

By Monday, EPC will also be updated to permit the generation of PDF versions of current (i.e., approved) Form 471 applications.  EPC already permits applicants to access PDF versions of their original Form 471 applications, as filed and certified.  The new current PDF version will display the net result of all changes to the Form 471 data since that form was filed. In other words, changes due to approved Receipt Acknowledgment Letter (RAL) modifications, PIA review, Form 486 review, appeals, SPIN changes, service substitutions, and other post-commitment actions will be reflected in the current version.  The following restrictions on the current PDF version should be noted:

• The current version option will only be available for Form 471s certified for FY 2019 and future funding years.
• The current version will be available only when the application is committed.
• When you generate a current version, that version will NOT be updated automatically with any subsequent changes. If there are changes to the data on the form, you must regenerate the current version by clicking the "UPDATE CURRENT PDF" button
• The current version link expires about two months after you first generate it (i.e., save it locally to have continued access).
• The FRN Status Tool and the Open Data Platform will not have a link to the current version of the form.