News of the Week

E-Rate:

Wave 36 for FY 2021 was released on Thursday, December 16th, for a total of $20.0 million.  Cumulative commitments are now $2.49 billion. Nationwide, USAC has now funded 98% of the FY 2021 applications representing 89% of the requested funding.

ECF:

Five ECF funding waves have been issued to date.  Cumulative commitments are currently $3.22 billion.  To date, all ECF funding has been for applications submitted in the first ECF window and represents decisions on 56% of the initial requests with an approval rate averaging almost 91%.  Total authorized disbursements as of last Friday’s invoice Batch 7 is $76 million.

Delays in the release of additional ECF funding waves is proving problematic for many applicants awaiting approvals before ordering new devices and services.  Unlike E-rate, with funding waves issued weekly, the last ECF wave was over three weeks ago on November 23rd.  When a new ECF funding wave is released, the FCC has been issuing a press release indicating total funding.  USAC also updates its ECF dataset.  Here’s a way to check the ECF dataset for new wave data:

1. Select the “Export” tab then select “CSV or Excel.”  The download file is large and may take a few seconds to fully load.
   
2. With the file open, go to Column BI headed “Obligation File #” (USAC’s ECF terminology for Wave number).  Highlight Column BI and use Excel’s “Data” tab and “Filter” function.
   
3. Click the little filter arrow at the top of Column BI to see the range of values.  As of last Friday, the ECF dataset only included data on Waves 1-5 (and ‘Blanks,” i.e., FRNs yet to be funded).  To see FRN data on only one wave, uncheck all the other filter boxes and click “OK.”

With two additions last week, the FCC now has three active broadband dockets in progress that directly or indirectly affect schools and libraries.  Comments are being or will shortly be solicited on all three.  A Guide to Reading and Filing FCC Comments is available in the Resources section of the E-Rate Central website.

Affordable Connectivity Program:

The Affordable Connectivity Program (“ACP”), designed to extend the Emergency Broadband Benefit (“EBB”) program an additional 4-5 years beyond 2021, provides discounts on internet services and connected devices to low-income families.  As indicated in our newsletter of December 13th, some of the initial comments filed on this docket recommend the extension of ACP discounts to bulk internet subscription services that would benefit needy out-of-school students and library patrons.  Of particular interest were the comments filed by the Schools, Health & Libraries Broadband (“SHLB”) Coalition and E-Rate Central recommending the eligibility of homeless shelters and, more broadly, suggesting the use of ACP funding as a transitional tool to the existing, but funding- and time-limited, ECF program.

Last week, in early reply comments, E-Rate Central recommended a “two words – one comma” addition to the proposed list of examples of ACP-eligible multiple dwelling units to explicitly include homeless shelters.  We would hope that school districts with large numbers of students in homeless shelters — e.g., an estimated 28,000 in New York City last year — will support this approach.

Reply comments on the ACP docket are due December 28th.

Proposed E-Rate Competitive Bidding System:

Last week, at its December open meeting, the FCC Commission adopted a Notice of Proposed Rulemaking (“NPRM”) (FCC 21-124) to consider the implementation of an online competitive bidding portal for E-rate.  The proposal had been telegraphed just before Thanksgiving with the release of a draft NPRM (see our newsletter of November 29th).

Key aspects of the proposed bidding portal would or might include the following:

• Service providers responding to Form 470s (and RFPs), would submit their bids through the bidding portal rather than directly to the applicants.
• Bid hold periods might be established that would prevent applicants from reviewing bids for at least 28 days from the Form 470 certification date to ensure that service providers are competing on a “level playing field.”  Such a waiting period would effectively create a “sealed bid” process.
• An additional period — e.g., two weeks — might be established for bid review.  Doing so would extend the minimum filing period between a Form 470 and a Form 471.
• The bidding portal could support the anonymous submission of service provider questions and public responses by the applicants.
• Applicants may be required to submit bid selection documentation such as bid comparison matrices and related contract documents at the time funding is requested.

Discussion of the proposed system at the FCC’s meeting was perfunctory but the final version of the NPRM appeared to reflect some recognition of early concerns that the proposed bidding system might create serious conflicts with existing state and local procurement rules.  Several of the key differences between the original draft and the final version included the following:

• Most importantly, the NPRM asks: “Are there solutions other than a bidding portal or changes to the competitive bidding rules that could likewise reduce bid collusion and the risk of fraud? Commenters are invited to address the feasibility, necessity, and cost effectiveness of implementing a nationwide bidding portal” (see para. 12).  This opens the door for non-portal suggestions.
• The proposed use of the portal to collect all bids was softened a bit by asking: “Alternatively, could we treat the bidding portal as a repository for bids, that would permit applicants to upload bids received after the fact, but would not require service providers to submit bids through the portal?”
• The use of the portal to collect bid selection documents was changed from a firm directive to a request for comment (see para. 10).
• A new section was added on the Interaction with State and Local Procurement Rules (para 20) to solicit comment on this issue.
• On the downside, a draft objective of making the portal available for FY 2025 was changed to an earlier FY 2024 (para. 32).

Comments on this NPRM from states, applicants, and suppliers will be critical.  Initial comments will be due 60 days after publication in the Federal Register.  Reply comments will be due 30 days later.

Inquiry on the Future of the Universal Service Fund:

Also last week, the FCC released a Notice of Inquiry (“NOI”) (FCC 21-127) somewhat misleadingly entitled a “Report on the Future of the Universal Services Fund.”  Except for a succinct pair of paragraphs and an attached statement by Commissioner Brendan Carr, the NOI does not highlight the rising USF contribution factor (see article below).  Instead, it focuses more broadly on the various new federal programs of national broadband initiatives funded by the Infrastructure Act.  The NOI asks what steps, if any, the FCC should take to align its overall universal service goals with these other programs.

To the extent these other programs can expand the availability and lower the costs of broadband services nationwide, particularly in un-served or under-served areas, schools, libraries, and others will benefit greatly.  This NOI, therefore, may serve an important coordinating role.

The broad scope of Infrastructure Act funding was highlighted last week in a webinar conducted by the National Telecommunications and Information Administration’s (“NTIA”).  The following slide from that presentation, which we expect to be posted on the NTIA website shortly, highlights the key programs addressed in the FCC’s NOI.

Comments on the FCC’s Broadband NOI are due January 17th; reply comments are due January 31st.

The final version of the Eligible Services List (“ESL”) for FY 2022 (DA 21-1602) was released last Friday.  As initially indicated in the draft version issued for comment last summer (see our newsletter of July 27th), the FY 2022 ESL had only two changes from the FY 2021 version, namely:

• The “Eligible Broadband Internal Connections” section was clarified to say that applicants may request support for both the equipment and the software necessary to use the equipment (e.g., right-to-use software or client access licenses) by requesting the equipment and software either together or separately.
• A note was added under the “Eligibility Explanations for Certain Category One and Category Two Services” section guiding applicants to the list of prohibited equipment and services covered by the Secure Networks Act.

More significantly, looking to the potential eligibility of new products and services in the future — albeit not for FY 2022 — the FCC:

• Recognized “how instrumental Wi-Fi hotspots on buses and bookmobiles have been in allowing students, school staff, and library patrons to engage in remote learning during the ongoing COVID-19 pandemic.”
• Pointed to a Congressionally-directed report to be prepared by the Department of Homeland Security to identify specific cybersecurity risks that impact K-12 educational institutions (see the K-12 Cybersecurity Act of 2021).

As it has done in past years, the FCC waived its own rules that otherwise would have delayed the opening of the Form 471 application window until 60-days from the release of the FY 2022 ESL.  As such, we expect the FY 2022 application to open in the second week of January.

Upcoming Dates:

USF Quarterly Contribution Factor for 1Q22:

The FCC announced that the Proposed First Quarter 2022 Universal Service Contribution Factor will be 25.2% (see DA 21-1550). As shown below, this is down again from the 2Q21 high of 33.4%, but only back to the disturbingly increasing trend line.

As discussed above, the FCC has initiated a Notice of Inquiry, which by its title would appear to address the Universal Service Fund, but really focuses on the broader subject of Universal Service broadband goals.  Only two paragraphs and an attached statement by Commissioner Brendan Carr address the USF contribution factor that Carr characterizes as being “stuck in a death spiral.”

USAC’s Emergency Connectivity Fund Program Newsletter of December 14, 2021, added the following two important tips for requesting ECF reimbursements:

• Unmet Needs – Actual unmet needs must be finalized prior to requesting reimbursement. Schools and libraries may only request ECF reimbursement for services that fulfilled an actual unmet need of a student, school staff member, or library patron consistent with the application certification.  While the FCC has not prescribed specific data collection requirements for documenting the unmet need, schools and libraries should be prepared to describe how and when they collected the information that they use for determining actual unmet needs associated with their request for reimbursement. Although it is not required for the request for reimbursement submission, schools and libraries may also be asked to provide documentation to support actual costs of services to those students, school staff members, and library patrons during the review process.
• Matching Documentation - Costs on the submitted service provider invoice must match the information that was entered on the ECF FCC Form 471.  For example, costs that were bundled on the submitted ECF FCC Form 471 should also show as bundled on the submitted service provider invoice.  Please ensure that you submit an invoice that mirrors the ECF FCC Form 471 in order to avoid delays in processing. 

A recording of last week’s ECF reimbursement webinar is expected to be posted on USAC’s ECF training site early this week.

Note: USAC decisions on reimbursement requests are issued in batches after being first reviewed by the FCC.  Batch 7 was released last Friday, December 17th.  Applicants are emailed invoice decisions in the following format:

Last week’s ECF News Brief mostly repeats FAQs from the preceding few weeks, but added the following FAQ:

Can I request to add equipment or increase my funding amount if I have already received an FCDL?
If an applicant believes that they received an FCDL that is incorrect, the applicant can file an Appeal within 30 days of the date of the letter. Appeals will be reviewed and a new RFCDL will be issued based on the review conducted. For questions, applicants should contact the Emergency Connectivity Fund Customer Support Center (CSC) at (800) 234-9781 or use the external communications tab in the ECF Portal

USAC’s Schools and Libraries News Brief of December 16, 2021, discusses a series of E-rate topics including the following:

• Options for using NSLP and enrollment numbers for both discount rate and Category 2 purposes in FY 2022.  Note that the EPC administrative window in which applicants can update their EPC entity profiles has been open since October 26th and will close early in January.
• A short video and the associated webinar slides are available to explain how an applicant can request an update of its Category 2 budget.  Note that the update process is not intuitive and is different for schools and libraries.
• The Client Service Bureau (“CSB”) is no longer.  It has been renamed the USAC Customer Service Center (“CSC”).  It will be close both Fridays, December 24th and December 31st.
• Reminders that the FCC extended the gift rule waiver through June 30, 2022, and that a series of Fall 2021 training videos are available on the E-Rate Webinars page.
• Tribal schools and libraries are encouraged to review their Tribal designations — see the EPC Tribal Check Boxes video.
• With the launch of the new E-Rate Entity Search Tool, USAC has retired the legacy Entity and Urban/Rural tools.
• The FCC is encouraging entities doing business with the FCC to provide the email addresses associated with their FCC Registration Numbers (if not already provided) in the upgraded Commission Registration System (“CORES”).