For many years, particularly since the E-Rate Modernization Orders that added significant funding to the E-rate program, applicants have become accustomed to a lenient FCC policy routinely approving waivers for late-filed E-rate applications certified within 14 days of the close of the window. For the past two years, waivers for still later-filed applications (typically within 30 days) have also been granted treating the pandemic-related causes as “special circumstances.”
The FCC has taken a similarly flexible waiver policy with regard to late ECF filings in the second application window.* Based on both the E-rate and the ECF precedents, third window ECF applicants who missed the May 13th application window may presume that similar waivers will be granted again this time around if new third window ECF applications are filed within the 14-day period ending this Friday, May 27th.
We caution that this 14-day “grace” period may not hold this time around.
To understand our concern, a little history is necessary for perspective. All the late-filing waivers granted over the past decade stem from and reference the Academy of Math and Science Order (FCC 10-122) of 2010.** This Order granted 97 waivers for applications filed within 14 days of the close of the window or were otherwise delayed due to “special circumstances.” Not so well known is the fact that the same Order denied 158 requests for waiver not meeting these criteria.
Perhaps more importantly, it should be noted — and stressed — that the granting of waivers for all the late-filed applications that followed the Academy of Math and Science Order in no way disadvantaged funding for applicants that had filed their applications on time. In particular, during recent years in which many late-filed waivers have been granted, extra E-rate funding was available to fully fund both timely-filed and waiver-approved applications.
It is highly likely that the demand for funding in the third ECF window, when added to the funding already approved or to be approved for the first two ECF windows, will exceed the program’s $7 billion statutory cap. Actual ECF-3 funding request data should be available soon. Assuming full funding is not available, the ECF rules specify that funding will be allocated based on a modified discount rate matrix. As shown in the table below, the prioritization allocation process starts with funding for the highest discount applicants first then working down the modified discount chain until funding is depleted (see also our newsletter of March 28th).
This means that any significant demand from late-filed applications, if approved by waiver, would at some discount level eliminate funding for other applicants who had filed on time. Suppose, for example, that the total demand from on-time applications was sufficient to fund down into the 75% rural discount band. Were the FCC to grant late-filed application demand for $100 million (or so) for high discount applicants, the 75% rural band on-time applicants (and maybe some of the 80% urban band applicants as well) might not get funded. Would this be fair?
At some point in the not so distance future, the FCC will need to decide on the fairness of depriving some on-time applicants of funding because of waivers given to higher-discount late filers. Late-filing applicants in the third ECF window should not automatically assume that the FCC’s historic waiver policy is the governing precedent in an allocated funding environment.