News of the Week

The FY 2023 Form 471 application window will open on Wednesday, January 18, 2023, at 12:00 noon EST, and will close on Tuesday, March 28, 2023, at 11:59 p.m. EDT.

USAC’s Special Edition E-Rate News Brief of December 21st, announcing the FY 2023 window, provided tips for first-time filers, Category 2 budget planning, competitive bidding, and browser updates.  Most immediately, the News Brief reminded applicants to update their EPC entity profiles before the close of the Administrative Window that is scheduled for Monday, January 16th at 11:59 p.m. EST.  Once the Administrative Window is closed, entity profiles will be locked for the duration of the application window.

E-Rate for FY 2022:

Wave 37 for FY 2022 was issued on Thursday, December 29th, for $8.33 million. Cumulative commitments to date are $2.80 billion.  Nationwide, USAC has funded 98.1% of the FY 2022 applications representing 93.5% of the requested funding.

ECF for 2021-2023:

Total commitments for all three ECF windows are $6.47 billion.  Nationwide, USAC has funded 79.4% of the ECF applications representing 65.4% of the requested funding.  Window 3 applications are now being funded down to the 75% rural band; Window 3 applications in the 65% rural band are currently under review.  Total disbursements as of last Friday were $2.56 billion.

At the New Year, it is worthwhile to look back on the past year and to plan for the new one.  Here’s our annual E-rate review of 2022 and a preview of 2023.  Additional details on 2022 developments can be found in our E-Rate Weekly News Archive.  Both years were or will be characterized by continued pandemic concerns and new broadband funding programs.

Key Milestones in 2022:

Anticipated Developments in 2023:

E-Rate: The E-rate program continues to run smoothly.  At this point, USAC is on track for opening the FY 2023 Form 471 application window on January 18th and closing it on March 28th.  To avoid last minute hassles and possible system problems, we encourage applicants to complete their competitive bidding processes, sign their contracts, and file their FY 2023 applications as early in the year as possible.

The most difficult aspect of the FY 2023 application process, at least for some applicants, may be determining current NSLP percentages for discount rate purposes.  With free meals having been made available to all students over the past two pandemic years, schools needing to collect NSLP applications for the current school year may have had to reeducate parents on the process.  As such, schools may be hard pressed to fully update their eligible student counts before the administrative window closes on January 16th.  The wait for complete NSLP data may also slow state efforts to submit FY 2023 valid files to USAC for PIA review purposes.

The hope is that 2023 will, for the first time in a long while, bring about an expansion of the Eligible Services List, at least for FY 2024.  Two major additions are under consideration.

• Cybersecurity: As discussed in our newsletter of December 19th, the FCC has requested comments on the use of E-rate funds for advanced or next-generation firewalls and other network security services.  Although not a formal Notice of Proposed Rulemaking, the request for comments is the first time that the FCC has addressed — and in a seemingly positive manner — the eligibility of cybersecurity products and services.  With reply comments not due until March 30th, and the FY 2023 ESL already finalized, any change in cybersecurity eligibility for the coming year is unlikely.  To allow for that possibility, however, applicants purchasing advanced firewalls in FY 2023 may wish to file two FRNs — one FRN covering the allocated cost of the currently eligible “basic” firewall, and a second FRN for the remaining portion.
• Wi-Fi on school buses: FCC Chairwoman Rosenworcel’s proposal to make W-Fi on school buses E-rate eligible (see our newsletter of May 16th) via a Declaratory Ruling has stalled but may be resuscitated by the addition of a fifth Commissioner.  In the meantime, experience gained with school bus Wi-Fi supported under ECF may demonstrate educational benefits to students — not to mention the sanity of bus drivers (see our newsletter of May 30th).

The most controversial E-rate development in 2023 is expected to revolve around the FCC’s proposal to implement an online competitive bidding portal — see FCC Notice of Inquiry (FCC 21-124) referenced above and in our newsletter of December 20, 2021.  Fortunately, the bidding portal is not expected to be implemented until FY 2024 at the earliest and will not affect FY 2023 applications.

ECF: USAC’s review of pending ECF applications is now focused on Window 3 applications with funding currently being provided down to the 75% rural level.  Funding at lower priority levels remains a distinct possibility as USAC completes application reviews and applicants continue to reduce their funding commitments for unneeded equipment and services.  ECF audits, now just beginning, may hasten additional commitment reductions.

Service delivery deadlines — June 30th for Windows 1 & 2 commitments and December 31st for Window 3 commitments — will shift the focus to invoicing.  As this occurs, many applicants and service providers will find a need to renew their SAM.gov registrations (required annually).  More importantly, as ECF funding for home internet services comes to an end, we expect to see more schools and libraries begin to promote the alternative use of ACP discounts for qualified low-income families.

Upcoming Dates:

FCC Streamlined Decisions:

The FCC issued another set of “streamlined” precedent-based decisions (DA 22-1346) 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 (E-rate) or Docket 21-93 (ECF).

In December’s streamlined decisions, the FCC:

1. E-Rate Dismissed:
   1. One Request for Review deemed moot “where invoicing records demonstrate that the entity was fully compensated for the funding it requested and all submitted invoices were funded.”
   2. One Request for Review that failed to meet the FCC’s filing requirements for supporting documentation.  The service provider filing this request had simply filed USAC’s SPI denial notice.
   3. One Petition for Reconsideration dismissed for failing “to identify any material error, omission, or reason warranting reconsideration, and rely[ing] on arguments that have been fully considered and rejected by the Bureau within the same proceeding.”
2. E-Rate Granted:
   1. One Request for Waiver for ministerial and/or clerical errors “where the applicant selected the wrong category of service on its FCC Form 471.”
   2. One Petition for Reconsideration setting a new special construction service delivery deadline.
   3. One Request for Waiver of the Red Light Rule deemed “warranted given the grossly disproportionate penalty of funding loss coupled with the other unique circumstances present, including the payment of the debt shortly after it received notice of the debt.”
3. E-Rate Denied:
   1. One Request for Waiver of the Red Light Rule rejecting the argument that even though the applicant “was on red light status when it applied for funding, it eventually repaid the debt.”
   2. Three Requests for Waiver for late-filed FY 2022 applications.
   3. Four Requests for Waiver for late-filed invoice deadline extensions (filed in November 2022 having apparently missed the October 28th deadline).
   4. One Request for Waiver for relying on a Form 470 not seeking bids on services later requested on a Form 471.
   5. Two Requests for Waiver for untimely filed appeals or waivers.
4. ECF Dismissed as Moot:
   1. One Request for Review and/or Waiver “where USAC had taken the action the petitioner requested.”
5. ECF Granted:
   1. Two Requests for Waiver permitting the delivery of equipment before the start of the approved funding period.
   2. Three Requests for Waiver for ministerial and/or clerical errors.
   3. One Request for Waiver “recognizing that the reasonable cost of connected devices for individuals with disabilities.”  Interestingly, this was a preemptive waiver request submitted and approved before the applicant’s Window 3 application was under review.
   4. One Request for Waiver of a special construction service delivery deadline.

USAC’s ACP Service Provider Tool:

Schools and libraries that did not apply for ECF internet funding, or even for those that did but whose funding is running out, are beginning to promote the Affordable Connectivity Program (“ACP”) as a way for low-income families to establish or maintain low- or no-cost home internet services.  To assist in these efforts, the FCC has developed an extensive ACP Consumer Outreach Toolkit.  One missing tool in this kit, however, has been one that would help consumers — and the schools and libraries that might help those consumers — identify the internet providers in their areas who are providing ACP-discounted services.

To this end, we were encouraged to read USAC’s recent ACP – December 2022 Newsletter describing its new Companies Near Me tool “to help consumers find providers that offer service in their area.”  The tool works off the following simple search screen:

Search results, however, are likely to overwhelm schools and libraries seeking to partner with local providers.  Tests of the tool we’ve conducted yielded lists of a hundred or more companies supposedly offering ACP-discounted services within a single local Zip Code.  Many of these companies (roughly 60% in our tests), while often promoting “nationwide service,” are providing only mobile internet services, presumably through reseller arrangements.

Schools or libraries seeking to develop home internet outreach programs with local internet providers can best use the USAC “Companies Near Me” tool by doing the following:

• Download the search results for one or more local Zip Codes.
• Sort the list by “Type of Service” to focus on Home Internet (not Mobile Internet).  In our tests, Home Internet represented about 40% of the entries.
• If the goal is to promote free home internet services, further sort the list by “$0 with ACP.”  “Yes” in this field indicates that the provider has at least one service offering costing $30 or less per month such that with an ACP discount of up to $30 per month, home internet services would be free.  In our tests, less than 10% of the companies listed for a given area could provide free, ACP-discounted, home internet services.
• Use the URL hyperlinks in the tool results to further explore the now shortened list of potential internet partners.  The tool also provides follow-up telephone numbers for those providers.