News of the Week

The FY 2014 application window will close on Wednesday, March 26, 2014 at 11:59 p.m. EDT.

Wave 41 for FY 2013 will be released on Wednesday, March 5, 2014. Funding is currently being provided for Priority 1 services only. Cumulative funding for FY 2013 is $1.90 billion.

USAC announced last week that there will be no Priority 2 funding available at any discount level for FY 2013. Denials on FY 2013 Priority 2 requests are expected in this week’s Wave 41. With the FCC focusing on E-rate modernization beginning with FY 2015, there is little optimism concerning the feasibility of Priority 2 funding for FY 2014.

Wave 79 for FY 2012 will be released on Thursday, March 6, 2014. Priority 2 funding is being provided at the 90% discount level only. Cumulative funding for FY 2012 is $2.85 billion.

Because Form 470s must be posted for 28 days, the last day to file a valid Form 470 for FY 2014 was last Wednesday, February 26, 2014. Twenty eight days from that date will be March 26th, the filing deadline for Form 471 applications.

Applicants who met that deadline are now positioned to meet the Form 471 deadline, but it is critical that they wait the required 28 days. We stress this because:  (a) it’s an E-rate rule; and (b) the SLD may be about ready, as they’ve done the last few years, to send confusing letters labeled "Notification of Form 470 Posted but No Associated Form 471” to every applicant who posted a valid Form 470, but who has not yet — as most have not — filed a Form 471. Applicants should not let these letters trick them into filing premature Form 471s.

Applicants who missed the Form 470 deadline may have a real problem. The following alternatives can be considered:

1. Applicants with services being provided under a multi-year contract, executed under a valid Form 470 for an earlier funding year and extending through FY 2014, can file a Form 471 for those services citing the earlier Form 470.
2. Educational service agencies that have filed Form 470s (and plan to file Form 471s) may offer services to their members on a consortium basis.
3. Some states (and certain regional bidding cooperatives) provide master contracts for E-rate eligible services. These contracts are valid for E-rate purposes and can be referenced in Form 471s if both of the following conditions are met:
   1. The state or cooperative filed a valid Form 470 for the service; and
   2. The contract was competitively bid, meaning that, at least on a regional basis, there was a single winner. If the contract involves a multi-vendor award, the Form 470 may still be cited on a Form 471, but only if the applicant conducts a “mini-bid” among all vendors on the multiple award schedule.
4. As a last resort, an applicant can file a late Form 470 anyway in the hope that:
   1. A large snow storm (not out of the question given the way this winter has been going) or a major SLD system problem leads to a last minute extension of the application window; or
   2. Upon appeal, the FCC may waive the Form 471 application deadline. In the past — and most recently in its Order DA 14-250 referenced below — the FCC has shown some flexibility for Form 471s filed within 14 days of the close of the window or further if delayed by special circumstances.

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 1-24 have already passed. The Form 486 deadlines for March are:

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

On-Site PQA Audits:

In recent years, USAC has conducted two types of audits. The most numerous were the Payment Quality Assurance (“PQA”) audits which focused on individual paid invoices. More detailed Beneficiary audits focused on all aspects of specific funding years. Traditionally, PQAs were conducted remotely by phone and e-mail, while the Beneficiary audits involved on-site visits.

This year, however, we have begun to see some on-site visits associated with PQA audits. We understand this change comes as the result of OMB dissatisfaction with the scope of the existing PQA process (designed to comply with the requirements of the Improper Payments Act). The number and duration of PQA audits involving on-site visits is expected to be limited.

FCC Appeal Decisions Watch:

The FCC issued the following two appeal orders, both consistent with past precedents:

1. Ben Gamla Palm Beach, et al (DA 14-239):  The FCC granted the requests of eight applicants seeking additional time to respond to PIA requests for further information.
2. Boston Renaissance School, et al (DA 14-250):  The FCC granted the requests of seventeen applicants, and denied seventeen others, seeking relief from the FY 2012 or FY 2013 application deadlines. Approvals were based on applications being filed within 14 days of the close of the filing window or, due to serious illness or death, within 30 days of the application deadlines. The FCC also dismissed two petitions for reconsideration on the basis that the applicants failed to identify any reasons not fully considered in the original FCC appeal decisions.

In another action, the FCC issued a Notice of Suspension and Initiation of Debarment Proceedings to Bryan J. Cahoon. Mr. Cahoon, who had been the IT director for the City of Lawrence, MA, and a city subcontractor through his own company, “orchestrated a scheme to circumvent the state’s procurement requirements that provided bidding information and instructions to your friends and business associates, who were awarded at least eight contracts with the city totaling $178,555.”  He also “hired friends and associates to preform cabling and rewiring work for the city as interns” and then, through his own company, “billed the City of Lawrence for that work at inflated rates” leading the city to be “double-billed for the same work.”  After pleading guilty, Mr. Cahoon was sentenced to a year in prison and ordered to pay $465,000 in restitution.

SLD Spring Training for Service Providers:

The SLD announced that its annual training sessions for service providers will be held this year in Tampa on May 8th and in Los Angeles on May 13th. An agenda for the training sessions is not yet available.

The SLD issued two News Briefs last week discussing the Form 471 application process.

The Special Edition version issued February 27th provides a few tips for filing “review-ready” applications and discusses the type of information needed in Item 21 Attachments for different types of services.

The regular Friday version issued February 28th provides the following ten additional filing tips for FY 2014 applicants:

1. Get an FCC Registration Number (“FCC RN”) if you don’t yet have one.
2. Review your entity name, number, address, and category using the SLD’s Entity Search tool and change any incorrect information. As an additional tip, we encourage applicants to make sure that all their entity names and address are consistently listed with both USAC and their state departments of education.
3. Request entity numbers for any new entities.
4. Locate your NCES or FSCS codes (see the Data Tools page on the NCES website).
5. Locate the Service Provider Identification Number (“SPIN”) for each of your service providers (see USAC’s SPIN and BEAR Contact Search tool).
6. Check the Form 470 number you intend to cite for each funding request.
7. Review the required information in each Block 5 for broadband and other connectivity services.
8. Have the required student and entity information available for your Block 4 worksheet(s).
9. Certify your forms.
10. Submit your Item 21 Attachments.