ECF’s Friday the 13th:
The ECF application window closes this Friday, August 13th, at 11:59 p.m. EDT. Friday the 13th has always had an ominous connotation so let’s consider what could go wrong with ECF applications in the hope of avoiding future problems. We see four areas of potential problems.
- Unmet Needs – Applications vs. Invoices. As discussed in our newsletter of August 2nd, both the FCC and USAC have indicated that unmet needs, as specified at the application stage, need be based only on best estimates as defined by the applicants. For invoicing purposes, however, applicants (or their service providers) must only file reimbursement claims for actual needs. Ultimately, both schools and libraries must be able to track— by name — the individual recipients of internet services and/or devices provided.
- Bundled Equipment Pricing. Also discussed in our August 2nd newsletter — and highlighted in FAQs discussed in both an FCC and a USAC webinar last week — was the issue of bundled charges for equipment packages including both eligible and ineligible components. One frequently discussed example is a Chromebook, bundled with the necessary (but not separately eligible) software license. USAC’s answer was that the entire bundle would be eligible (subject to the $400 cap) if there was “no discernible charge” for the license. The FCC’s answer was similar but added that the bundled pricing was eligible if provided as a “normal business practice,” not “just for the ECF program.” The FCC’s refined language calls into question a practice we have seen by some service providers attempting to bundle as many features as possible into their device prices without exceeding the allowable cap. Applicants applying for such bundled devices may ultimately be subjected to a measure of cost allocations.
- Late Filed Applications. Traditional E-rate applicants have long known that if they missed the formal application window deadline, the FCC would routinely grant Out-of-Window waivers for applications filed within 14 days. More recently, the FCC has been granting late filing waivers of up to 30 days as the result of COVID-related problems. USAC has recently posted instructions for submitting ECF window waiver requests (importantly reminding filers that the ECF waiver deadline is 30 days, not the traditional 60 days). The FCC’s position, however, is currently unknown. It could: (a) continue to routinely grant late filing waivers; (b) grant waivers only for “extraordinary circumstances;” or (c), deny all such waivers in lieu of opening a second “prospective” ECF window later this fall.
- Audits and COMADs. With the aim of getting ECF funds into the hands of needy schools and libraries as soon as possible, the FCC and USAC are expected to accelerate the processing of both applications and invoices. If so, we would expect to see a greater emphasis placed on post-funding reviews, meaning more audits and potentially more post-commitment adjustments (“COMADs”) seeking the return of funds. Some parties, reading the enabling ECF legislation, have noted that only $1 million has been set aside for program oversight by the FCC’s Inspector General. “How many audits,” they cynically ask, “can they do with $1 million?” The answer, in our view, is that the $1 million is not the real source of audit funding. The primary administrative funding in the legislation is the provision that up to 2% of the total $7.17 billion — i.e., $143.4 million — is designated for “the Commission to adopt, and the Commission and the Universal Service Administrative Company to administer, the covered regulations.” We would expect a portion of that funding to support robust audit efforts.
We encourage all ECF applicants to file reasonably thought out ECF applications by this Friday’s deadline and, when approved, invoice only for well-documented needs. Friday the 13th need not be a foreboding experience.
ECF Form 471 RALs:
Applicants filing Form 471s for ECF will be emailed Receipt Acknowledgement Letters (”RALs”) in the format shown below. The RAL suggests several next steps including SAM.GOV registration if necessary and, more usefully, a link to a full version of the filed application.
Common ECF Misconceptions:
Last week, the FCC issued the following list of ECF misconceptions and corrections:
- Misconception #1: Schools cannot apply for funds unless they have surveyed all parents to determine need.
This is false. Schools need only provide best estimates of unmet need in applying for ECF support. It is up to the school to determine how to estimate need – a school can choose to use a survey but is not required to use one.
- Misconception #2: If schools have returned to in-class instruction for the upcoming school year, they are not eligible to participate.
This is false. Even if schools have returned to in-class instruction, they are eligible to seek Emergency Connectivity Fund support for unmet remote learning needs, such as broadband access for homework or lesson planning. Equipment and services provided to students or school staff who would otherwise lack sufficient access to connected devices and/or a broadband internet access connection while off campus are eligible for Emergency Connectivity Fund support.
- Misconception #3: If schools have received ESSER or CARES Act funds to buy connected devices/hotspot devices, they are not eligible to participate.
It depends. While schools and libraries may not seek support for equipment or services that have already been fully paid for through other federal or state funding sources (such as federal pandemic relief money), they may seek funding for any portion of the costs of the equipment or services that were not covered. This could include applying for ECF support for the monthly broadband service costs associated with a hotspot device that was purchased using other federal or state funding sources if service was not included as part of the original purchase. They may also seek support to address ongoing unmet needs that are not covered through other funding sources (see ECF Report and Order, paras. 125-128).
- Misconception #4: If households receive EBB benefits, they are ineligible to receive devices or service through ECF.
It depends. ECF rules do not permit applicants to receive duplicative support for services that are reimbursed through other federal or state programs. However, a school could receive ECF support to purchase a connected device for a student if needed to support learning, even if the household is receiving internet service through the EBB program.
- Misconception #5: Libraries are only allowed to lend devices to K-12 students due to educational purpose requirement.
This is false. While libraries must use ECF support primarily for educational purposes, there is no restriction that devices be loaned to K-12 students, and the Order makes clear that library patrons may include library staff (see ECF Report and Order, para 64, n.188). “Educational purposes” is defined as activities that are integral, immediate, and proximate to the provision of library services to library patrons in the case of a library (see ECF Report and Order, para. 63).
- Misconception #6: Schools and libraries need to conduct competitive bidding, like they do for the E-Rate program.
This is false. While schools and libraries need to comply with state, local and Tribal procurement requirements, there are no federal competitive bidding requirements like there are in the E-Rate program (see ECF Report and Order, paras. 87-89).