News of the Week

Wave 39 for FY 2016 was released last Thursday, March 23rd for a total of $13.1 million. An estimated 57 FCDLs were issued in Wave 39. Cumulative national funding through Wave 39 is $2.38 billion. Wave 40 is scheduled to be released on Thursday, March 30th.

Category Two Budget Inflation Adjustments, cont.:

Our last newsletter of March 20th noted that the FCC had approved a 1.3% inflation adjustment for FY 2017 and that we had calculated the impact of this adjustment on the five-year Category 2 budget caps as shown in the table below. USAC has confirmed these new budget numbers are correct — at least as rounded to the nearest penny.

Note: As currently configured — which may or may not change — the EPC Category Two Budget Status calculations do not round the per unit budget cap numbers to the penny. For FY 2016, the non-rounding affects only the budget cap for non-urban libraries for which the more precise 1% inflation adjustment results in a cap of $2.323 per sq.ft. instead of the rounded $2.32 per sq.ft. figure.

USAC is expected to update EPC shortly to reflect the FY 2017 Category 2 budget caps. It has also indicated that a new multi-year, non-EPC, budget tool will be available next month (with or without the new FY 2017 budget caps).

FY 2016 FCDL Constraints:

As of last Friday, following the release of Funding Commitment Decision Letters (“FCDLs”) in Wave 39, there were 151 pending applications shown as “Wave Ready.”  Early in the FY 2016 review cycle, the “Wave Ready” status normally meant that an application had successfully completed PIA and would be approved in the next funding wave. Currently, many of the applications designated “Wave Ready” have been in that stage for multiple weeks. USAC has acknowledged that a variety of EPC system issues, gradually being resolved, have prevented the release of FCDLs for certain applications.

In an effort to relieve applicant anxiety, USAC has begun a targeted outreach program on completed, but unapproved applications. Applicants potentially affected by system FCDL-issuance problems should look for USAC emails to their EPC Account Administrators. Applicants’ Form 471 contacts will not receive this correspondence unless they are also their EPC Account Administrators.

Pending EPC Features for FY 2016 and FY 2017:

The EPC Landing Page has long promised that “more functionality will be rolling out soon!”  Indeed, that has been occurring. EPC is much more feature-rich than when it was first introduced in 2015. But much more remains to be done. The most important functionality we hope to see in the next month or so are as follows:

1. Applicant and service provider notification of decisions on service substitutions, SPIN changes, and appeals. USAC is already processing these change requests for FY 2016, but is still testing EPC features to release the resulting decisions, including the generation of Revised Funding Commitment Decision Letters (“RFCDLs”). As indicated in USAC’s March 24th News Brief, referenced below, the new RFCDLs should be ready for release in the next few weeks.
2. Applicants filing early Form 471s for FY 2017 are promptly receiving confirming Receipt Acknowledgment Letters (“RALs”) via their News Feeds. The RAL Correction process, which is used to request allowable changes to completed Form 471s, has not yet been implemented for FY 2017.

The delays in implementing these changes have likely resulted in significant backlogs in the processing of these activities. It is our hope that USAC will dedicate additional resources to reduce the backlogs and allow applicants to move forward with projects that are on hold pending these enhancements.

Upcoming 2017 E-Rate Deadlines:

USAC Webinars for E-Rate Beginners:

USAC issued a Special Edition News Brief last week announcing two upcoming webinars for beginners.

E-rate 101: Introduction to the E-rate Program
       Wednesday, April 5, 2017, 1:00-2:00 PM EDT

E-rate Program Application Process
       Thursday, April 6, 2017, 1:00-2:00 PM EDT

As a practical note, E-rate beginners just being introduced to E-rate during the first week in April will have to be fast learners. At this point, applicants for FY 2017 will have less than one week to complete Form 470s beginning the competitive bidding process, and less than five weeks to complete Form 471 applications. Webinar-like training videos covering the key aspects of the E-rate process are already available in USAC’s Online Learning Library.

FCC Decision Watch:

Having now apparently returned to its monthly schedule, the FCC issued another set of “streamlined,” precedent-based decisions in Public Notice DA 17-279. In summary, the FCC:

1. Dismissed:
   1. Five Requests for Review or “Waiver” that, as appeals, should have been filed first with USAC.
   2. Five Requests for Waiver deemed as moot for fully-disbursed and/or approved FRNs.
   3. Four Petitions for Reconsideration deemed to rely on arguments fully considered and rejected by the FCC.
2. Granted:
   1. One Request for Waiver involving a late-filed Form 486.
   2. One Request for Review and/or Waiver granting a partial year invoice payment on an FRN whose Service Start Date had been adjusted as the result of a late-filed Form 486.
3. Denied:
   1. One Request for Expedited Waiver involving an applicant’s failure to properly consider the price of eligible items as the primary factor in the vendor selection process. The applicant argued that it had ultimately accepted the lowest priced option — often the basis for a successful waiver — but the FCC apparently found that a comparison of eligible-only costs would have yielded a different result.

The Request, submitted less than two weeks prior, asked for expedited treatment to facilitate rebidding the service for FY 2017 if necessary. The FCC acceded to the request for a quick decision, but clearly not with the applicant’s preferred outcome.

The subtlety in this case is that one bidder provided two prices for Internet service, both with and without Distributed Denial of Service (“DDoS”) protection. The other bidders included DDoS protection as a bundled service. To be fair, the applicant compared all bids with DDoS protection, bundled or not. The FCC deemed unbundled DDoS protection as ineligible. Apparently, the applicant should have cost-allocated out the DDoS portion from the bundled prices of the other bidders for an eligible-only price comparison, and/or created a separate evaluation factor for the inclusion of DDoS protection.

3. 2. Multiple related Requests for Review by 35 archdiocese schools for improper vendor involvement — filing of the Form 470s — in the competitive bidding.
   3. Seven more Requests for Waiver for invoice deadline extensions.
   4. Four Requests for Waiver for Form 471 applications filed more than 14 days late, absent “special circumstances.”
   5. Two late-filed Requests for Waiver.

USAC’s Schools and Libraries News Brief of March 24, 2017, discusses USAC’s revised procedures for reviewing and issuing decisions on FRN changes requested by applicants (or service providers), e.g., appeals, service substitutions, and SPIN changes. For FY 2016 funding, approved changes will be communicated via EPC-generated Revised Funding Commitment Decision Letters (“RFCDLs”). USAC expects to start issuing RFCDLs in the next few weeks.

If USAC needs additional information to process FY 2016 changes, emails will be send to users who have post-commitment rights, directing them to the EPC inquiries. Users may then (a) respond, (b) request an extension to respond, or (c) cancel the request through EPC.

Appeals and change requests for funding years before FY 2016 will be handled as before.

Last week’s News Brief also provides updated guidance on known EPC issues, including the:

• Unnecessary technology plan certification in the Form 486.
• Missing service provider Form 486 notifications.
• Incorrect “Wave Ready” (instead of “In Review”) status as shown immediately upon Form 500 submission.
• Missing form identification numbers on Form 500s for FY 2015 or earlier.
• Apparent disappearance or misclassification of incomplete Form 471s.