News of the Week

The FY 2014 application window will close on Wednesday, March 26, 2014 at 11:59 p.m. EDT. The Form 470 deadline for FY 2014 is this Wednesday (see below).

Wave 40 for FY 2013 will be released on Wednesday, February 26, 2014, for $47.2 million. Funding is currently being provided for Priority 1 services only. Cumulative funding for FY 2013 will be $1.90 billion.

Wave 78 for FY 2012 will be released on Thursday, February 27, 2014. Priority 2 funding is being provided at the 90% discount level only. Cumulative funding for FY 2012 will be $2.85 billion.

During his recent Digital Learning Day speech on the FCC’s E-rate modernization plans, Chairman Wheeler indicated that the FCC was planning to issue a public notice for comment shortly (see our newsletter of February 10, 2014). Last week, building on the Chairman’s pledge to create a more open FCC, the FCC’s E-rate working group reached out to a number of stakeholder groups to provide a broad preview of what that Public Notice might contain. The FCC staff indicated that the Public Notice should be issued within the next couple of weeks, will provide a relatively short period for comment (unfortunately overlapping with the E-rate filing window period), and will be designed to lead to an E-rate order no later than August before the school year begins. The FCC’s goal is to begin the E-Rate 2.0 modernization process effective for FY 2015.

The corollary to this public notice process is that no changes to the E-rate rules appear to be contemplated for FY 2014. An Official FCC Blog, released last week, reinforces our suspicion that there will be no Priority 2 funding for FY 2013, and that Priority 2 funding for FY 2014 is also unlikely (see also our newsletter of February 17, 2014).

Based on the FCC staff’s outreach last week, it is expected that the forthcoming public notice will focus on the following five areas:

1. Options for revising Priority 2 funding allocation rules to promote broadband connectivity within buildings (think “WiFi”). Based on last summer’s NPRM and related comments, options are likely to include:
   1. Cyclical funding of Priority 2 for all applicants;
   2. Changing the 2-in-5 rule to 1-in-5; and/or
   3. Providing a specific amount of annual funding per applicant, perhaps on a per-student basis.
2. Options for encouraging Priority 1 broadband connectivity to underserved schools and libraries. This might include additional funding for installation charges as a means of making recurring monthly costs more affordable.
3. Consideration of the ongoing eligibility of voice services, including cellular.
4. Strategies for driving down network costs through more cost-effective purchasing methods and/or funding for neutral third-party network design assistance.
5. Possible funding of demonstration projects involving bulk purchasing and network design.

The FCC has indicated that the forthcoming public notice will be much more focused than last summer’s NPRM, in part because the FCC views E-rate modernization to be a step-wise process for which the first order will be just the first step.

Form 470 Deadline:

This year’s deadline for filing a valid FY 2014 Form 470 and/or RFP is this Wednesday, February 26, 2014. Waiting until the deadline leaves no room for error. Because a Form 470 must be posted for 28 days, a February 26th filing would mean that on March 26th the applicant would have to:

• Select vendors
• Sign contracts, if required
• File a Form 471 — the final day of the FY 2014 application window!

Form 486 Deadlines:

Typically, a Form 486 must be filed no later than 120 days from FCDL issuance or the start of service, whichever is later. Assuming services started July 1, 2013, the deadlines for FY 2013 funding waves 1-23 have already passed. The Form 486 deadlines for the remainder of February and March are:

                      Wave 24           02/27/2014
                      Wave 25           03/06/2014
                      Wave 26           03/14/2014
                      Wave 27           03/20/2014
                      Wave 28           03/27/2014

ESH Item 21 Entry Portal:

EducationSuperHighway (“ESH”) is developing an online portal in which applicants or consultants can create Item 21 Attachments for their FY 2014 Form 471 applications. The portal is scheduled to go live on February 28th, so we expect that it will be broadly publicized shortly.

ESH is a non-profit company which initiated an aggressive campaign last year to collect copies of applicant Item 21 Attachments to begin building a database on school broadband deployment. Such data is clearly important to the FCC and other state and national policy-making entities which, to varying degrees, have been cooperating with ESH in this effort.

We will be reviewing the ESH Item 21 Entry Portal in a future newsletter once the system becomes fully operational. A key point to understand is that the while the ESH portal permits the online creation of nice, neat, Item 21 Attachments, ESH’s system is not linked to USAC’s online Form 471 filing system. Indeed, it serves as an alternative to USAC’s own online Item 21 Attachment mechanism. This means that any Item 21 Attachments created through the ESH portal will have to be sent separately to USAC, either mailed or faxed in paper format or e-mailed in PDF format (a direct output option of the ESH system). It is also important to recognize that Item 21 data created via the ESH portal will become part of ESH’s broadband database.

FCC Process Reform:

The FCC released a Public Notice seeking public comment on a recently prepared Report on FCC Process Reform. Comments are due March 31, 2014. Although not directly related to the forthcoming E-rate public notice discussed above, E-rate applicants and service providers may wish to address any of the following issues raised in the Report:

• Improving the efficiency and effectiveness of the FCC’s decision-making process by streamlining the internal FCC review process, improving tracking accountability, and reducing backlogs;
• Processing items before the agency more quickly and more transparently by accelerating the overall speed of disposal of both routine and more complex matters, and ensuring the public is provided more information regarding the status of particular matters;
• Streamlining agency processes and data collections, including reworking essential processes such as licensing activities, internal distribution and release procedures, handling of informal consumer complaints, compliance with statutory requirements such as the Paperwork Reduction Act, and examining the FCC’s data collection practices to lessen burdens where possible, while ensuring the agency’s data collection practices are effectively tailored to evolving market conditions;
• Eliminating or streamlining outdated rules that are candidates for modification or elimination as a result of marketplace or technology changes that render the rules no longer necessary in the public interest;
• Improving interactions with external stakeholders by enhancing the FCC’s public outreach and transparency, exploring innovative mechanisms for developing policy proposals, and updating the drafting process for policy documents;
• Maximizing the Commission’s tools and resources by ensuring effective internal communications, human resource management, and training; and
• Modernizing the Commission’s information technology infrastructure to improve its website functionality, data management, and tracking capability.

FCC Appeal Decisions Watch:

The FCC issued one appeal order (DA 14-234) last week denying fifteen recently filed appeals. In all cases, the denials were based on the applicants having missed the 60-day appeal deadline. The FCC will occasionally waive its appeal deadline rule, but normally only for compelling reasons. The FCC also denied two petitions for reconsideration on the basis that the applicants failed to identify any reasons not fully considered in the original FCC appeal decisions.

The SLD News Brief for February 21, 2014, discusses Item 24 of the newly revised Form 471. Item 24 is a “Description of Broadband and other Connectivity Services Ordered for Schools and Libraries from this funding request.”  It contains required fields specifying the number of lines and the speed of each for every circuit-oriented FRN, including cellular data. It also asks applicants to estimate the percentage of classrooms or public library rooms with wired and wireless connectivity.

Several points should be noted:

1. The fields in Item 24a, Item 24b, and Item 24c need to be completed only if the associated FRN includes connectivity charges, e.g., local telephone lines, cellular, and data lines of any speed. If not, check the first box and ignore the rest. Note that an FRN for Internet access, not including the access circuit itself (which might be covered in a different FRN), is not considered a connectivity service. Other non-connectivity services typically include long distance, web hosting, and all Priority 2 products and services.
2. Listing circuits and speeds in Item 24 does not eliminate the need for an associated Item 21 Attachment, but line counts and speeds should be consistent.
3. Applicants unsure about the speed of their lines should ask their suppliers or provide their best estimates. Cellular wireless data speeds, for example, might typically be 1-2 Mbps for 3G service or 5-8 Mbps for 4G service.
4. The two percentages requested in Item 24b for wired and wireless coverage may add up to greater than 100%. For example, a school may have wired data drops in 75% of its classrooms overlapping with WiFi coverage of 90%.
5. In an effort to provide the FCC with the best data available, we strongly encourage applicants to complete Item 24 as accurately as possible. Inaccuracies in Item 24, however, are unlikely to become grounds for denial.