About two months ago, we began to see reports of applicants receiving inquiries from USAC concerning the cost of the devices on which they had applied for ECF funding. The inquiries question the reasonableness of the costs of those devices — often after the applications had been approved and often after the devices had been purchased, paid for, and invoiced. A typical inquiry begins:
We are unable to make a positive determination that the cost(s) associated with the [devices] requested on FRN(s) [#] is reasonable. ECF program rules require that the cost of eligible equipment and services be reasonable and set a cap of $400 per eligible connected device as the maximum the FCC will reimburse (47 CFR § 54.1707(a)). Based on our review, the cost(s) associated with requested devices appear to be more expensive than we would expect given your description of the equipment and/or services requested. Specifically, our review has found the same devices requested on the FRN(s) or devices with higher capability can be purchased at a substantially lesser cost from a variety of vendors.
The inquiries continue with a request to explain “how you selected the equipment, why their costs are reasonable, and include an explanation of the factors and special circumstances which led to your selection.”
We have seen a variety of responses to these USAC inquiries. And now we are starting to see intents to deny. Such actions, as illustrated in the example below, make no sense — for several reasons:
- The ECF program was put in place as an emergency response to the pandemic. The goal was to get connected devices in the hands of students and patrons as quickly and as easily as possible in an environment already subject to supply chain problems.
- Recognizing these factors, the ECF rules did not require competitive bidding. Schools and libraries were effectively encouraged to get these devices from whatever vendors could provide them quickly and in sufficient quantities. Pricing, albeit capped at $400 per device, was secondary.
- The ECF rules did include generic language indicating that prices should be reasonable and cost-effective. Aside from the $400 device cap, USAC properly paid little attention to actual device prices in early application, or even invoice, reviews.
Today, in a more competitive marketplace and with fewer supply chain constraints, to argue that ECF applicants could have and should have negotiated better prices two years ago is unrealistic. Reducing approved funding to a lower level reflecting today’s pricing would be wrong. But to suggest that previously approved applications be denied, after applicants have already purchased devices, would be a travesty.*
Denial Example:
One denial that we analyzed clearly shows the problem we are having with USAC’s current reasonableness reviews and denial decisions. The application was filed, approved, and successfully invoiced for 100 Apple iPads (10.2-inch iPad, 9th gen, Wi-Fi, 64GB, Space Gray) purchased directly from Apple at a unit price of $377.95. An ECF review in Open Data shows that this was one of the standard price points for Apple devices.
As a part of our analysis, we looked at 3,699 approved applications for such devices. 85% of these applications had Apple devices, ordered directly from Apple, at the five exact price points shown below.
Unit Price |
Applications |
$294.00 |
802 |
$299.00 |
451 |
$373.00 |
83 |
$377.95 |
173 |
$400.00 |
1,627 |
|
3,136 |

Given the apparent standardization of Apple pricing during the pandemic, we question whether USAC and the FCC really expected — indeed required, under penalty of denial — applicants to shop the internet for the best possible pricing. That was certainly not in the ECF rules. Could it be that USAC is doing that only now and finding “deals” such as shown below?
And could it be that, if USAC determines this applicant paid too much for its Apple iPads, the other 172 applications for devices priced at $377.95 should also be denied? And how about the other Apple applicants? Or other applicants who appear to be falling short of USAC’s pricing decisions? We strongly urge USAC to reconsider this course of action.