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June 30, 2014

Introduction

The E-Rate Central News for the Week is prepared by E-Rate Central. E-Rate Central specializes in providing consulting, compliance, and forms processing services to E-rate applicants. To learn more about our services, please contact us by phone (516-801-7804), fax (516-801-7814), or through our Contact Us web form. Additional E-rate information is located on the E-Rate Central website.

Wave 8 for FY 2014 will be released on Wednesday, July 2nd. Funding for FY 2014 is currently available for Priority 1 services only. Cumulative funding for FY 2014 is $1.22 billion.

Wave 56 for FY 2013 will be released on Thursday, July 3rd. Funding for FY 2013 is available for Priority 1 services only. Priority 2 is being denied at all discount levels. Cumulative funding for FY 2013 is $2.08 billion.

Wave 87 for FY 2012 will be released next week on Monday, July 7th.  Priority 2 funding for Priority 2 is available only at 90 percent.  Cumulative funding for FY 2012 is $2.87 billion.

As discussed in our newsletter of June 23rd, FCC Chairman Wheeler released a brief Fact Sheet outlining his proposals for modernizing E-rate, first concentrating on support for internal Wi-Fi deployment. More details on prospective changes to the E-rate program are expected to become available at the FCC’s next public meeting on July 11th and in a formal FCC order to follow.

In the interim, we are witnessing a reverse form of lobbying as Commissioners and their staff provide additional information on proposals still under consideration in an apparent attempt to solicit support for their own positions from the E-rate community.

Clarification Rumors:

Based on what we’ve heard from various sources over the past week, here is what the rumor mill is saying about a few of the Wi-Fi issues still under discussion:

  1. With broader applicant access to funding for internal equipment (now categorized as “Category 2”), will more applicants be subjected to the requirement for approved technology plans?  The answer appears to be “No.”  The FCC is likely to defer planning to the states and eliminate the E-rate tech plan requirement entirely.
  2. How will per-applicant Wi-Fi funding be capped?  The indication last week was for a five-year, pre-discount, $150/student limitation (and a similar per square foot limit for libraries). But would that be up to $30/student for all applicants each year, or up to $150/student at any time over the five-year span?  Based on more recent indications that the FCC would hope to accommodate Wi-Fi funding for 10 million students in FY 2015, the latter option appears more likely. This would suggest that only the higher-discount applicants might be funded in FY 2015 — much the way Priority 2 was funded in the past — and that other lower-discount applicants would have to wait their turn over the remaining four years.
  3. How much Wi-Fi funding will be available for small applicants?  The rumored pre-discount minimum is $6,000 for both schools and libraries. Funding will apparently be calculated on an applicant-by-applicant, not site-by-site, basis.
  4. How will the discount matrix be changed?  The Chairman’s proposal indicated that the discounts for Category 2 will be capped at 80%. We may have to wait for a second order to see if the discounts will change for Category 1 (the old Priority 1). It is not yet clear if the 80% cap means only that 90% is simply being reduced and combined with the existing 80%, or if all other discount levels are being reduced accordingly (apparently another point of dissension among the Commissioners).

Use of GSA Pricing:

One non-rumored clarification last week appeared in an official FCC blog. It addressed the statement in the Chairman’s Fact Sheet indicating plans to “Leverage GSA pricing so schools can buy for less.”  The blog noted that the FCC and the General Services Administration (“GSA”) had agreed to work together to establish blanket purchase arrangements (“BPAs”) for Wi-Fi equipment for schools and libraries, and to allow purchases through GSA’s reverse auction platform.

Using the reverse auction platform, a school would put out a bid for equipment on the GSA site. At the end of round #1, the prices bid – or at least the lowest price bid – would be displayed. Higher-priced suppliers would be given the opportunity to adjust their prices downward in subsequent rounds. Ultimately, when no one else lowered the price further, the lowest-priced bidder would win.

The blog contains no indication that applicants would be required to utilize the GSA bidding mechanism, although we could envision a future scenario in which USAC utilized BPA pricing as a cost-effectiveness benchmark.

One other interesting aspect of this blog announcement is the statement that “equipment makes up as much as 80 percent of the total cost of internal network deployment.”   This appears to be a direct acknowledgment that (a) the purchase of equipment, and (b) the deployment of that equipment, are two different things. USAC’s current interpretation of Priority 2 contract rules is that an applicant can have only one contract for the purchase and installation of equipment (i.e., if you have one contract for equipment purchases, and one contract for the installation of that equipment, only one contract is E-rate eligible). This interpretation is currently the subject of several pending FCC appeals.

USAC Fall Applicant Training:

USAC has scheduled its annual fall applicant workshops for the following locations and dates. With the expectation of major changes to the E-rate program for FY 2015, these workshops — as well as those to be scheduled by many states — are going to be an important source of information for applicants and service providers this year. Note that four USAC sessions are already fully booked and are available only on a waiting list basis.

  • Washington, DC - Monday, September 29th (waiting list)
  • Philadelphia - Tuesday, October 7th (waiting list)
  • Minneapolis - Monday, October 13th
  • New Orleans - Thursday, October 16th (waiting list)
  • Portland - Tuesday, October 28th
  • Los Angeles - Thursday, October 30th (waiting list)
  • St. Louis - Tuesday, November 4th
  • Orlando - Tuesday, November 11th

FCC Appeal Decisions Watch:

The FCC issued one appeal order last week for Camnet, Inc. et al (DA 14-879) granting ten requests and denying seven others (plus one petition for reconsideration). All the appeals hinged on the definition of a correctable ministerial and/or clerical (“M&C”) error. The order indicated only that the individual decisions were “consistent with precedent.”  A review of the underlying appeals, however, provides several examples of what the FCC agreed were M&C errors, including:

  • Item 21 attachment data entry error
  • Equipment component details missing in an Item 21 attachment
  • Error based on an erroneous service provider invoice
  • Error in service provider quotation
  • Transcription error from NSLP documentation
  • Transcription error from monthly invoice documentation
  • Data entry error on total students (increasing count ten-fold)

On the flip side, the FCC rejected the following non-M&C reasons for application corrections:

  • Category of service error on Form 470
  • Funding request amount change unsupported by original documentation
  • Funding request revision resulting from change of service
  • “Incompetent employee” error
  • Failure to include surcharges in funding request

For additional information on M&C errors, see USAC’s Ministerial & Clerical Errors guidance.

Restarting PIA Review:

As also mentioned in the SLD News Brief referenced below, PIA’s summer contact procedures are now in effect and will remain so until September 5th.  Applicant contacts, who may not have been available over the past month or so, may find that their applications have been placed in a “Deferred” status mode. Contacts, who are now ready to work with PIA to get their applications back into Initial Review (without waiting until September), can do so by contacting their state’s PIA manager. The SLD helpfully provided the following list of PIA managers and their email addresses. Note that these managers may also be helpful in dealing with other PIA review issues.

PIA Manager

States/Territories

Arvind Patel

Colorado, Delaware, Florida, Hawaii, Idaho, Kentucky, Maine, Maryland, Nebraska, New Mexico, North Carolina, Ohio, Pennsylvania, Rhode Island, Utah, Wisconsin

Linda Clark

Arkansas, District of Columbia, Kansas, Michigan, Mississippi, Missouri, Nevada, New York, North Dakota, South Carolina, South Dakota, Virginia, Washington

Dusan Stamenkovic

Alaska, American Samoa, Connecticut, Georgia, Illinois, Iowa, Massachusetts, Minnesota, Northern Mariana Islands, Oklahoma, Tennessee, Texas, Vermont, U.S. Virgin Islands

Sal Cooper

Alabama, Arizona, California, Guam, Indiana, Louisiana, Montana, New Hampshire, New Jersey, Oregon, Puerto Rico, West Virginia, Wyoming

With USAC on a record pace, having committed over $1.2 billion in funding for FY 2014 prior to July 1st, USAC has also been encouraging funded applicants to file their associated Form 486s as early as possible. This is particularly important for applicants seeking to receive discounted bills from their suppliers beginning in July.

The SLD News Brief for June 27, 2014 provides the following tips for filing a Form 486 online:

  • Use the information from your FCDL to file your form.
  • Include FRNs from different FY 2014 Form 471s on one Form 486 (assuming all use the same BEN).
  • In Item 5, identify the contact person who should get program letters (the Form 486 and BEAR Notification Letters). This is particularly important for those using BEARs because many suppliers send reimbursement checks to this contact.
  • Complete the Item 8 section on technology approval appropriately.
  • Follow USAC’s online filing navigation tips.
  • Try the expert version of the online Form 486 if you have trouble with the interview version.
  • Pay attention to any pop-ups or warning messages that occur.

USAC has two instructional videos on its website entitled Preparing to File the FCC Form 486 and How to File an Online FCC Form 486.