News of the Week

Wave 21 for FY 2015 will be released on Friday, October 16th. Funding for FY 2015 is available for both Category 1 and Category 2 services at all discount levels. Cumulative funding for FY 2015, as of last week, is over $2.27 billion.

Wave 68 for FY 2014 will be released next Monday, October 19th. Funding for FY 2014 is available for Priority 1 services only. Priority 2 funding has been denied at all discount levels. Coincidentally, cumulative funding for FY 2014 is also approximately $2.27 billion.

Discount Rate Consistency in EPC:

As has always been the case, consortium discount rates are based on the discount rates of their members, and library discount rates are based on the discount rates of the school districts in which they are located. However, this is not to mean that these discount rates have always been consistent. Up until now, discount rates used in consortium and library applications were based on data submitted by those applicants. That data may, or may not, have matched the data used in separate applications filed by the underlying school districts.

Wouldn’t it be nice if all this data was consistent?  USAC’s answer is “yes!”  This consistency objective is embedded in the design of the EPC version of the Form 471 application being readied for FY 2016.

The upshot of this design is that consortia and libraries will no longer have to collect and enter discount rate data of the underlying school districts in their applications. This data will already reside in the EPC accounts of those districts. As such, it will be validated during PIA at the district level, and it will be automatically incorporated into the discount rate calculations of the consortium and library applications.

In theory, this is a great design. In practice, consortia and libraries should recognize that the accuracy, availability, and timeliness of the student eligibility data is now the responsibility of their school districts. This has a number of ramifications, including the following:

1. In setting up the EPC system, USAC loaded each account with discount rate data from each applicant’s FY 2015 application(s). Most school district data, therefore, should be available, albeit a year old. It’s up to the districts to update this data — and, ultimately, to PIA to validate it.
2. Districts, which participate in E-rate only through consortium applications, will have to be encouraged to create their own EPC accounts. We expect USAC to reach out to any districts (as well as to other applicants) who do not establish EPC accounts, but it is unclear how effective USAC will be in contacting districts that did not file their own FY 2015 applications.
3. It behooves consortia and libraries to encourage their associated districts to set up those EPC accounts as well — and to have them update their discount rate data as appropriate.
4. USAC has indicated that it will not hold up the processing of consortium and library applications until all the underlying district discount rate data has been validated, but will fund these applications based on the data that is available at the time of review. To the extent that district data changes during review, resulting in a different consortium or library discount rate, USAC intends to issue revised funding commitments to those affected applicants. As a practical matter, consortium discount rates should not change much; individual library discount rates could conceivably change by 10% or more.
5. Consortium and library applicants concerned about program compliance issues arising from the reliance on data provided by other applicants may take some solace in the following:
   1. Form 471 certifications do not specifically attest to the accuracy of discount rate data provided, but only to broader compliance with the E-rate rules (arguably covering this filing process).
   2. Should the occasion arise, USAC has indicated that it will inform auditors that the responsibility of discount rate data for consortium and library applicants lies with the underlying school districts.

Deactivating EPC Account Users:

As Account Administrators are setting up their EPC accounts, and adding users, we’re already starting to get questions about how to delete users. The answer is that a user can’t be immediately deleted, but can be deactivated by the administrator. Ultimately, a user may be fully deleted after a period (perhaps a year) of inactivity. Here’s how the deactivation process works:

1. Select “Records” from the main menu.
2. Click the “Users” link.
3. Locate the user in the list by entering their name.
4. After locating the user, click the user name link.
5. When the user profile opens, click “Related Actions.”
6. Click “Deactivate User.”
7. Enter a note explaining the reason for deactivating the user.
8. Click “Submit” and confirm this action.

Important New EPC Guidance on Multi-Location Schools or Libraries:

The EPC system is introducing, and will be tracking, “annexes” — a new EPC term designating additional sites associated with state-defined schools or libraries. As of FY 2016, these sites will not require separate entity numbers, but will be listed and associated separately with the individual school and library records in the applicants’ EPC portals. Additional information on this change is discussed in last Friday’s USAC News Brief discussed below. 

Upcoming E-Rate Training and Deadlines:

FCC Appeal Decision Watch:

The FCC issued another monthly set of precedent-based decisions in Public Notice DA 15-1105, including:

1. Dismissed two filings characterized by the applicants as requests for waiver, but which the FCC determined were requests for review. Under current E-rate rules, a request for review (often called an “appeal”) of a USAC decision must first be made to USAC. A request for a waiver of an E-rate rule — and this is often a fine distinction — can be made directly to the FCC.
2. Dismissed as moot one request for review for which USAC had already approved the underlying request.
3. Dismissed five Petitions for Reconsideration, four for lack of cause and one for missing the 30 day filing deadline.
4. Granted:
   1. Two requests to allow the installation of Internal Connections hardware from suppliers other than the equipment vendors. Until clarified by the FCC, USAC had previously interpreted E-rate rules as requiring that equipment purchase and installation be covered by the same contract.
   2. One request to reverse an application denial as a result of the applicant’s failure to consider price as the primary factor, but where the petitioner had “selected the least expensive responsible bid.”
   3. One Petition for Reconsideration whereby the petitioner was able to show that reported Allowable Contract Dates, which would have violated the 28-day waiting period requirement, were clearly ministerial or clerical errors as supported by the later received dates of the vendor quotations.
   4. Five requests for invoice deadline extensions filed less than 12 months late that were made “in good faith and within a reasonable period of time after services were provided.”
   5. Twelve waivers for late-filed Form 471 applications submitted within 14 days of the close of the window (a standard FCC waiver condition), plus one late-filed Form 471 waiver based on an “unexpected serious illness or death” of the person responsible for filing the application.
   6. Five requests for waivers involving ministerial or clerical errors, and one waiver of the signed contract requirement in a situation for which the applicant showed that it had a legally binding agreement.
5. Denied:
   1. One request for an invoice deadline extension filed less than 12 months late that, in contrast with the five approvals indicated above, could not show a “‘reasonable basis’ of a substantial delay.”
   2. Fifteen waivers for late-filed Form 471 applications with unsupported “special circumstances.”
   3. Two requests for review filed beyond the 60-day appeal window.

The S&L News Brief of October 9, 2015, expands upon two topics covered in previous News Briefs.

Form 470 Post-Certification Uploading of RFP Documents:

As of FY 2016, RFPs associated with Form 470s must be uploaded into the EPC system. The original RFPs must be uploaded as a part of the original Form 470 submission process (see S&L News Brief of August 28, 2015), and additional RFP information (e.g., addendums and/or Q&A material) must be added as available (see S&L News Brief of September 18, 2015).

Last Friday’s News Brief warns that significant — also defined as “cardinal” — changes to the products or services requested cannot be made simply by amending the original Form 470. In these cases, a new Form 470 must be filed, restarting the minimum 28-day bidding clock.

The definition of a “cardinal” change is somewhat subjective. One way to think about the issue is to consider whether or not the proposed change would likely affect a potential bidder’s response. USAC’s examples of cardinal changes requiring a new Form 470 include:

• You did not indicate that you had an RFP before you certified your form. The option to add RFP documents to a certified form is only available if you already attached at least one RFP document to your form before you certified it.
• You want to add new products and/or services. To post for new products and/or services, you can (1) file a new FCC Form 470 featuring only the new products and/or services or (2) cancel your existing form and post a new form featuring all of the products and/or services from both forms. In either situation, your 28-day waiting period for the products and/or services featured on the new FCC Form 470 does not start until you post the new form.

Additional and Modified Guidance on Entity Numbers:

The S&L News Brief of October 2, 2015, covered the basic information on entity numbers. Last Friday’s News Brief covers a number of special circumstances including changes reflecting (a) the impact of Category 2 budgets on individual “schools” and “libraries,” and (b) a new “annex” feature of the EPC system. Guidance is provided on:

• Buildings located on the same campus (i.e., not separated by a public right-of-way).
• Single schools with multiple locations.
• School or library buildings under construction.
• Non-instructional facilities.

Most importantly, the following points should be noted:

1. Two schools — as defined by the applicant’s state, such as a separate middle school and high school — located in the same building (or on the same campus) should have separate entity numbers. This is required because each “school” has a separate Category 2 budget.
2. Conversely, only one entity number is required for separate sites considered part of the same school (or what we have described as a “multi-location school”). This is new guidance. Historically, each site required a separate entity number. This change reflects the assignment of Category 2 budgets to individual schools (or libraries) rather than to individual sites, and a new EPC feature allowing applicants to associate “annexes” to schools (or libraries) without assigning separate entity numbers for these annexes.

Since “annex” is a new term for FY 2016, we recommend that applicants, previously having separate entity numbers for these types of sites, retain those entity numbers for pre-FY 2016 recordkeeping purposes, but should take care to list these annexes in their EPC accounts.

It appears that annex information is available in EPC only on an account-by-account basis (and currently can be entered only by the Account Administrator). When viewing an individual entity record within a user’s EPC account, a link to “Annexes” appears in the left-hand column. When viewing an entity not associated with a user’s EPC account, the “Annexes” link is not currently shown.