News of the Week

E-Rate:

Wave 29 for FY 2021 was released on Thursday, October 28th, for a total of $13.6 million.  Cumulative commitments are $2.34 billion.  Nationwide, USAC has now funded 96% of the FY 2021 applications representing 82% of the requested funding.

ECF:

Wave 3 of the Emergency Connectivity Fund (“ECF”) was released on Monday, October 25th, for a total of $269 million (see FCC News Release).  Cumulative ECF funding is now $2.63 billion.

The second shorter ECF application window closed on Wednesday, October 13th resulting in total additional requests of $1.29 billion. Note that late-filed applications submitted after the close of the first window, per FCC Order DA 21-1182, have been included as timely-filed second window applications.

Total funding requests in both windows were $6.43 billion, comfortably under the ECF cap of $7.17 billion.  The FCC has already telegraphed its intention to consider late-filed second window applications only under “extraordinary circumstances.”  Additional funding requests, therefore, are unlikely to be significant.  This provides reasonable assurance that all second window applications can be approved without prioritizing funding.

Many ECF applicants funded in Wave 1 are apparently facing an invoice deadline of November 23rd.  We say “apparently” because the FCC’s invoicing rules, as modified, are unclear and USAC’s database is misleading.

The FCC’s invoicing rules, as specified in the final Report and Order (FCC 21-58), indicate:

We permit applicants and service providers to submit reimbursement requests and invoices for prior and prospective purchases for 60 days from the date of the funding commitment decision letter; a revised funding commitment decision letter approving a post-commitment change or a successful appeal of a previously denied or reduced funding commitment; or service delivery date, whichever is later.

Subsequently, realizing that the 60-day deadline might be problematic, the FCC took two important steps: one for recurring services and one for non-recurring services.  The most straight-forward step was to issue FAQ 9.6 defining June 30, 2022, as the service delivery date for all recurring services.  Although recurring services are often billed monthly, this meant that the invoice deadline for all recurring services was August 29, 2022.

For equipment and other non-recurring services, the FCC took the formal step of issuing a Public Notice (DA 21-881) by adding a subsection in the ECF rules to read:

Section 54.1711(e) Service Delivery Date. For the initial filing window set forth in § 54.1708(b), the service delivery date for equipment and other non-recurring services if the equipment or services have not been received or ordered when the applicant submits the request for funding is June 30, 2022.  [Emphasis added, see below]

By setting the “service delivery date” for equipment as June 30, 2022, the FCC was apparently attempting to align most equipment invoice deadlines with those for recurring services.  If only it were that simple.

The actual language of the new subsection, unfortunately, includes several words that limit the effectiveness of the change.  In particular:

• The word “not.”  If equipment had been received or ordered before the application was filed, then the invoice deadline would be 60 days after the FCDL date.
• The words “or ordered.”  It is likely that only a minority of applicants would have received equipment before they filed their applications, but that a majority of applicants had probably ordered their equipment before filing — indeed, basing their funding requests on those orders.
• The word “initial.”  The relaxed service delivery date apparently applies only to equipment funding requested in the first application window, not the second.

To the extent that applicants did receive, or certainly may have ordered, equipment and other non-recurring services before they filed their ECF applications, then most will be subject to invoice deadlines 60 days after receiving funding.  Here are those deadlines for funding waves to date:

Another source of confusion is that the ECF Form 471 does ask “What is the service start date?” and “When will the services end?” but does not have a field for “service delivery date.”  As a result, USAC has no easy way to calculate invoice deadlines as FRNs are approved.  The BEAR itself does have a “Delivery Date” field but that information is available to USAC only when an invoice is received, not in time to establish when an invoice is due.

Theoretically, USAC does have a way to alert applicants and service providers of their appropriate invoice deadlines, but that mechanism is not currently useful.  Column BG of the ECF dataset is labeled “Invoice Deadline Date” but currently shows “8/29/2022” for all approved FRNs* (based on a service delivery date default of June 30, 2022).

At some point — hopefully prior to the existing Wave 1 deadline of November 23rd — the FCC will decide to issue a revised Public Notice clarifying that all ECF FRNs are presumed to have a service delivery date of the last day of the service period, June 30, 2022.  This approach would ensure that all ECF FRNs have the same invoice deadline of August 29, 2022.

Once an ECF BEAR is approved by USAC, all individuals in the applicant’s portal will receive a notification email stating:

Thank you for participating in the Emergency Connectivity Fund (ECF). The Universal Service Administrative Company (USAC) has completed its review of your ECF FCC Form 472 (BEAR) or FCC Form 474 (SPI) related to the entity or service provider listed above. The following FCC Form that you submitted has been processed:

• BEARXXXXX

Please see the “My Forms and Requests” section of the ECF Portal and search for the above-listed FCC Form. For more information or to see any correspondence with USAC, navigate to the “Communication” section of the form in question.

To get more detailed information about your request for reimbursement line items, visit the ECF website to access the ECF Request for Reimbursement Decision Detailed Report. Note it might take 1 business day from receiving this email for the report to be available.

Next Steps

Approved requests for reimbursement have been forwarded to the Federal Communications Commission (FCC or Commission) for payment processing and remain subject to final FCC approval. Payment will be provided via check or direct deposit from the U.S. Treasury to the bank account listed in SAM.gov. This process may take up to 5 business days.

Applicants that requested reimbursement prior to paying their service provider are required to pay the service provider within 30 days after receiving funds. The applicant must pay the service provider within 35 days of the date on this letter (this time frame includes an additional 5 days for U.S. Treasury processing time) and must submit verification of their payments in the ECF Program Portal as soon as possible after paying their service providers. After 35 days from the date of this letter, USAC will reach out to collect verification of payment to the service provider with a verification reminder letter. Those that have already submitted all required payment verifications may ignore this reminder. Others that have not provided payment verifications will have 30 days from the verification reminder letter to submit payment verifications in the ECF Portal. Verification may include processed checks, bank statements with redacted information, credit card statements, ACH statements, or money orders.

The email itself only indicates that the BEAR has been processed.  To determine what has been approved (or not) requires some work.  The ECF website link provided is for the ECF portion of USAC’s Open Data platform.  From there, go to the following section and download the Invoice Decision Report.

The Invoice Decision Report is an Excel file listing all BEAR or SPI approval decisions processed to date.  Processing is done in batches (only one as of last Friday).  The following illustration shows the key columns in the Excel report.

For more detailed information on an invoice decision, applicants and service providers are referred to the Communications Tab of their ECF portal.

Compared with E-rate BEARs, the time it takes between USAC approval of an ECF BEAR and the deposit of funds in an applicant’s bank account is expected to be longer.  Unlike E-rate, ECF payment processing is subject to FCC approval before payments are made by the U.S. Treasury.  The notification email indicates that this process may take up to five business days, but we suspect that is an estimate of the time between FCC approval and Treasury payment.  We do not yet know what procedures have been put in place for FCC approval, presumably to review each batch of USAC pre-approvals.

Upcoming Dates:

USAC Fall Online Training Schedule:

USAC has announced its 2021 online fall training schedule.  Online registration is available now for the following sessions (with registration links):

FCC Commissioner Updates:

Last week President Biden appointed Jessica Rosenworcel as the FCC Chairwoman, at least through the remainder of her current term ending this year.  Ms. Rosenworcel has been serving as Acting Chairwoman since President Biden’s inauguration.  At the same time, President Biden nominated Ms. Rosenworcel for another term on the Commission (presumably as Chairwoman) and Gigi Sohn to fill the vacant fifth Commissioner slot.  Ms. Sohn had previously served as Counselor to former FCC Chairman, Tom Wheeler.  Both positions must be confirmed by the Senate.

In a related move, President Biden also nominated Alan Davidson as Assistant Secretary for Communications and Information at the National Telecommunications and Information Administration (“NTIA”) within the Department of Commerce.

FCC Streamlined Decisions:

The FCC issued another set of “streamlined” precedent-based decisions (DA 21-1331) last week.  As with past streamlined decisions, 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 October’s streamlined decisions, the FCC:

1. Dismissed as Moot:
   1. Requests for Waiver on 63 late-filed ECF Window 1 applications that USAC had “received and accepted,” albeit reclassified as Window 2 applications.
   2. One Request for Review wherein USAC had already taken the requested action.
2. Granted:
   1. Five Requests for Review on discount rate calculations; three allowing updated calculations; one involving inconsistent discounts between entities; and one remanded for discount calculation reprocessing.
   2. One Request for Review of a USAC denial for failure to respond to a request for information when it was “unclear from the record” that the applicant had been contacted.
   3. Seven Requests for Waiver for late-filed FY 2021 applications: (1) filed within 14 days of the close of the window; or (2), filed more than 30 days late due to COVID-related problems.
   4. One Request for Waiver for a late-filed Form 486 upon a showing of good cause.
   5. Nine Requests for Waiver for ministerial and/or clerical Form 471 errors.
   6. One multi-school Request for Review noting that “federal universal service discounts shall be based on the price of a service prior to the
      application of any state-provided support for schools or libraries.”
   7. Two Requests for Waiver involving untimely appeals filed “within a reasonable period of time after receiving actual notice of USAC’s adverse decision.”
3. Denied: None!

USAC’s Emergency Connectivity Fund Program Newsletter of October 26, 2021, summarizes the additional funding approved in Wave 3 and the additional funding requests filed in the second ECF application window that closed October 13th.

The FAQs provided are a repeat of those in the previous week’s newsletter with one minor update to indicate that second window funding requests are now included in USAC’s ECF dataset.

USAC’s Schools and Libraries News Brief of October 29, 2021, repeats the information from last week’s News Brief but includes an updated article titled “FY 2022 Student Enrollment Numbers.”  The update clarifies “that applicants can use student count and National School Lunch Program (NSLP) data from different school/funding years if the data is not available due to the impact of the COVID-19 pandemic.”