News of the Week

FY 2016:

Wave 46 for FY 2016 was released last Wednesday, May 10th for a total of $29.6 million. Cumulative national funding through Wave 46 is $2.62 billion. Wave 47 is scheduled to be released on Thursday, May 18th.

At this point in the year, just as the FY 2017 application window has closed, it is useful to look at the processing of FY 2016 applications in some detail. The following table shows the status of all FY 2016 applications as of Wave 46. Please note the following:

1. The 1,721 number of applications still pending is a bit misleading because a large, but unreported, number have been characterized by USAC as being on “legal hold,” under some form of detailed investigation. These applications may remain in limbo for some time. We suspect these applications are largely those indicated by “No Status Reported” or “Waiting for Heightened Scrutiny.”
2. USAC continues to experience system processing problems with a small subset of applications including some recently activated for Initial Review (“IR”) and those shown as “Wave Ready.”

FY 2017:

The application filing window for FY 2017 closed last Thursday, May 11th.

Within a few weeks, USAC will provide the FCC with a preliminary demand estimate for the next funding year. As of last weekend, USAC’s FRN Status Tool shows the following total demand figures for FY 2017:

If reasonably accurate, these FY 2017 demand numbers are a step down from USAC’s initial demand projections for FY 2016 (issued prior to the close of the second consortium/library window) of $3.609 billion, including $2.330 billion for Category 1 and $1.279 billion for Category 2. The final demand for FY 2016 was slightly higher, in the range of $3.65 billion.

A slightly lower demand requirement for FY 2017, down $400-450 million, would help offset an expected reduction in the carry-forward of unused funds from prior years. Although the FCC has not yet announced roll-over funding for FY 2017, USAC’s most recent projections indicate the availability of $1.264 billion — high by historical standards, but below the record $1.9 billion rolled over into FY 2016 (see our newsletter of May 8th).

Out-of-the-Window Applications for FY 2017:

Applicants who missed last Thursday’s close of the FY 2017 Form 471 application window can still file applications through EPC. Late applications will be considered Out-of-the-Window and will be denied by USAC — unless such applicants file successful waiver requests with the FCC. Recent precedent — if followed by the new Republican-dominated FCC — suggests that the FCC will automatically approve waivers of the filing window deadline for applications filed within two weeks of the original window close (i.e., by May 25th).

Interestingly, due to another apparent bug in the EPC system, at least a few applicants received the following conflicting Task messages, first confirming successful filing of their Form 471s by last Thursday’s deadline, then erroneously indicating that their applications were filed after the close of the window.

Late-filing applicants, who did file Out-of-the-Window applications, may legitimately receive the same message. In these cases, the instructions for filing an FCC waiver may prove useful.

Special Construction Extensions for FY 2016:

FCC rules on special construction for leased dark fiber or self-provisioned networks require those systems to be completed within the funding year. For FY 2016, unless specifically extended, this means that each link must be lit by June 30, 2017. Note that this completion requirement does not include the three-month grace period (to September 30th) afforded to Internal Construction and other non-recurring services.

A one-year extension for the completion of fiber special construction projects may be requested from USAC if the construction was “unavoidably delayed” due, for example, to late funding commitments or weather problems. Note that there are no automatic extensions due to funding dates; each applicant requiring an extension must submit a request to USAC by June 30th. Instructions for requesting an extension are provided in USAC’s News Brief of April 21st.

USAC has already begun approving special construction extensions. The approvals are in letter format (see example) emailed directly to the applicants. Given the importance of timely approvals, USAC is currently handling extension requests manually, i.e., not through EPC nor the legacy system. As a result:

1. There is no system in place to notify the associated service providers of approved extensions. This responsibility falls on the applicants.
2. There is no online record of approved extensions. We would expect that such extensions may ultimately be included in the FRN Extension Table for FY 2016, but this too may require manual intervention.

Upcoming 2017 E-Rate Deadlines:

USAC’s Schools and Libraries News Brief of May 12, 2017, discusses the following steps applicants should take after filing their Form 471 applications for FY 2017:

• Review your Form 471 and submit RAL modifications to correct or update information. Focus particularly on:
  • Entity information.
  • Form 470s cited on funding requests.
  • FCC Registration Number.
  • Costs and cost allocations.
• Review and archive the documentation used during the competitive bidding process and in preparing the Form 471.
• Prepare for PIA review, including monitoring your contact email address and EPC account.