News of the Week

Wave 23 for FY 2020 was released on Thursday, October 1st for a total of $33.1 million.  Cumulative commitments are $1.71 billion.  Nationwide, USAC has now funded 90% of the FY 2020 applications representing 62% of the requested funding.

Additional USAC FAQs:

This week’s USAC’s Schools and Libraries News Brief of October 2, 2020, includes an additional set of questions and answers concerning the second application window for FY 2020. These FAQs are summarized below.

Other important FAQs on the second application window are discussed in our newsletters of September 21st and September 28th.

Understanding the FCC’s Kalamazoo Order:

The last FAQ in the preceding section addresses what is likely to be a common problem for schools utilizing long-term contracts for additional bandwidth in FY 2020 and seeking to extend the E-rate eligibility of those contracts into FY 2021 or beyond.  There are two scenarios to consider.

Converting a contract that was not competitively bid under E-rate rules (as per Scenario 2) into an E-rate eligible contract for future funding years is often referred to as a “Kalamazoo” process.  The terminology traces back to a 2002 FCC decision (DA 02-2975) in favor of Kalamazoo Public Schools whereby the district rebid the service for the next funding year, treated the preexisting contract as one of the competing bids, and selected that the contract’s vendor as the winning bidder.  Importantly, note that although the incumbent vendor’s contract may be considered a bid, E-rate rules require an applicant to fairly consider all bids received and to select the highest-scoring, most cost-effective bid.

Under the Kalamazoo Order on Reconsideration, the FCC clarified that “…in order to facilitate the application review process, it is advisable for applicants that choose to renew a pre-existing service after a bidding process to memorialize that decision after the bidding process is complete and record the date of this memorialization as the relevant contract award date in their submitted application for discounts.”  For EPC purposes, the memorialized Contract Award Date (“CAD”) is used when the newly eligible contract information is entered into the EPC Contract Module.

If the existing contract vendor is an active participant in the E-rate competitive bidding process, as is often the case, it may be possible to amend the contract to the benefit of both parties.  One amendment worth considering, if not already reflected in the existing contract, would be to realign the contract termination date with the end of the funding year to avoid the need to subsequently rebid the contract midyear.

We’re seeing a number of schools and districts beginning to set up remote learning sites in community centers, civic or hotel conference centers, churches or other off-campus locations that can accommodate multiple online students.  As an alternative to home-bound remote learning, these sites offer a number of advantages including:

• Access to Internet that may be unavailable or inadequate at home
• A safe and supervised environment for students with working parents
• A more efficient and practical means of providing technical support for remote learners
• Easier distribution of free meals

A recent Government Technology article discusses West Virginia’s statewide approach to remote learning sites.  By early September, the State’s “Kids Connect Initiative” had established 850 (and growing) locations in libraries, national guard armories, motor vehicle offices, state parks, and other easily accessible sites spanning every county.  New York City is also working on a childcare program called “Learning Bridges” with a near-term target of providing 30,000 remote learning sites.  Other remote site learning programs are understandably more limited in scope, but are equally important to host schools and districts.  What many of these sites share, making these programs easier to implement, is at least some level of existing Internet connectivity and Wi-Fi capability that can be expanded if necessary by adding additional Internet bandwidth and/or cloud-based wireless access points (“WAPs”).

From an E-rate perspective this year, little can be done to provide needed Category 2 enhancements to these sites, but support for increased Category 1 bandwidth via the  second FY 2020 application window — closing October 16th — now appears feasible for those acting quickly.  Based on informal guidance from USAC last week, new sites established to meet COVID-19 needs and considered as annexes to existing schools would qualify for additional bandwidth funding in the second window.

Upcoming E-Rate Dates:

Joint FCC/NECA Agreement on Broadband Services for Low-Income Students:

The FCC reached an agreement last week with the National Exchange Carrier Association (“NECA”) to enable hundreds of rural broadband providers to offer discounts and service upgrades to families with children who are eligible for free or reduced-price school lunches through the National School Lunch Program.  New tariff provisions — effective from last week through June 2021 — will provide eligible new customers of rural carriers a 25% discount on certain broadband services and offer existing eligible customers faster connections at no additional cost.

Although we continue to hope for direct E-rate support for home-bound students, either through FCC-initiated or legislative efforts, we acknowledge the many initiatives the FCC has undertaken to support remote learning during the pandemic.  A brief review of the FCC’s COVID-19 initiatives is available in the Coronavirus section of the FCC website.

FCC Streamlined Decisions:

The FCC issued another set of “streamlined” precedent-based decisions (DA 20-1129) last week.  Applicants facing similar problems as those addressed in these decisions may garner useful information by carefully reading the additional FCC explanations found in the footnotes.  The original appeal and waiver requests can be found online in the FCC’s Search for Filings under Docket 02-6.

In September’s streamlined decisions, the FCC:

1. Dismissed:
   1. One Petition for Reconsideration relying on arguments that had already been fully considered and rejected.
2. Granted:
   1. One Petition for Reconsideration restoring a mistakenly cancelled funding request.
   2. One Request for Review and/or Waiver for an invoice that was timely filed and incorrectly rejected by USAC.  On appeal, USAC agreed that the original invoice should not have been denied, but that the invoice deadline had since passed and a resubmitted invoice could not be filed.
   3. Three Requests for Waiver for late-filed FY 2020 Form 471 applications filed less than 60 days (i.e., up to 59 days) late.
   4. Seven Requests for Review and/or Waiver for ministerial and/or clerical errors involving missing items or FRNs, incorrect BENs, or wrong categories of service on a Form 471.
   5. One Request for Waiver of a late-filed waiver request.
3. Denied:
   1. One Request for Waiver for an incorrect Form 470 service category.
   2. Two Requests for Waiver for invoice deadline extension requests.
   3. Three Requests for Waiver of the Form 471 window for applications filed 60 days or more late or, in one case, still unfiled.
   4. Three Requests for Waiver of the appeal/waiver deadline that “did not show special circumstances.”

In addition to the second window FAQs discussed above, USAC’s Schools and Libraries News Brief of October 2, 2020, describes a streamlined BEAR review process set to begin this week.  Henceforth, BEARs with multiple FRN line items will be reviewed and processed on a line-by-line basis.  This means that FRN line items that do not require manual review, or require a lower level of manual review, can be processed for payment while the other FRN line items are under review.

Going forward, as described more completely in the News Brief, each BEAR Notification Letter (“BNL”) will contain summary information about the entire invoice, a summary table with the current status of each FRN line item, and specific details about the FRN line item decisions featured in the letter.  USAC will continue to produce BNLs for a specific invoice until all of the FRN line items on that invoice have been processed.