News of the Week

E-Rate for FY 2024:

Wave 15 for FY 2024 was released on Thursday, August 1st for $76.6 million.  Total funding is now $1.88 billion.  At this point, USAC has funded 88.1% of the originally submitted applications, representing 62.1% of the dollars requested.

The FCC’s Report and Order making hotspots eligible for E-rate funding in FY 2025, approved at the FCC’s Open Meeting on July 18th, was released last week.  The final version (FCC 24-76) was virtually the same as the previously circulated draft version (see our newsletter of July 1).  One addition in the final Order was three paragraphs on gift rules and bundling noting that aspects of these rules, which had been relaxed for ECF during the pandemic, are back in full force.*

We strongly urge applicants interested in hotspots to watch the recording of the hotspot webinar (video and/or slides) sponsored by SHLB last week.  Taken together, the three panelists stressed different aspects of the hotspot program including:

• Three-year prediscount budgets are based on an applicant’s size (a school’s enrollment or a library’s square footage) and discount rate using the following formulas:
  
  
• Eligible pricing is capped at $90 per unit for hotspot equipment (including activation) and $15 per month for wireless service.
• Recordkeeping and other program safeguards are likely to require extensive administrative efforts on the part of the applicants and significant cooperation between those applicants and their suppliers.

The Further Notice of Proposed Rulemaking (“FNPRM”) seeks “further comment on how to ensure the success of schools and libraries’ hotspot lending programs, including through continued collaboration by multiple stakeholders. In particular, we seek comment on the most effective means to ensure that limited E-Rate program funds are being used effectively and efficiently, and that Wi-Fi hotspots and services are being used for educational purposes and are not going unused.”  Any additional rules are likely to add to the administrative burdens associated with the hotspot program.  Initial comments on the FNPRM will be due 45 days after the Order is published in the Federal Register; reply comments will be due 30 days thereafter.

The FCC’s proposed Eligible Services List for FY 2025 (DA 24-743) has been released for public comment.  The only proposed changes for next year are the added references to the newly eligible Wi-Fi hotspots (see article above) under wireless services.  An expanded section under Eligibility Explanations reads:

Wireless services and wireless Internet access – In accordance with the Wi-Fi Hotspot Report and Order (FCC 24-76), the off-campus use of Wi-Fi hotspots and mobile wireless Internet services is eligible for E-Rate support. Wi-Fi hotspots that are portable and a single device (i.e., not a set of linked devices) are eligible as Network Equipment as indicated in Note (1) under Category One.

As clarified in the Wi-Fi on School Buses Declaratory Ruling (FCC 23-84), the off-campus use of wireless service and the equipment needed to make this wireless service for school buses functional (e.g., antennas, routers, modems) is eligible for E-Rate support.

Outside of these delineated exceptions, in general, off-campus use of E-Rate-funded services even if used for an educational purpose, is ineligible for support, and must be cost-allocated out of any funding request.

In order for data plans and air cards for mobile devices for use on-campus (e.g., a bookmobile in a state where it is eligible for support as a library) to be eligible, the school or library seeking support must demonstrate that the individual data plans are the most cost-effective option for providing internal broadband access for mobile devices at schools and libraries. Applicants should compare the cost of data plans or air cards for mobile devices to the total cost of all components necessary to deliver connectivity to the end user device, including the cost of data transmission and/or Internet access to the school or library. Seeking support for data plans or air cards for mobile devices for use in a school or library with an existing broadband connection and WLAN implicates the E-Rate program’s prohibition on requests for duplicative services.

Sidebar: For many years, the FCC has received — and rejected — numerous comments to its draft ESLs strongly urging the FCC to make cybersecurity equipment and services eligible.  With the FCC having now initiated a separate Cybersecurity Pilot Program (see our most recent newsletters of June 17 and July 29), it will likely reject similar requests for FY 2025.  On the other hand, we could argue — and would encourage others to do as well — that having acknowledged the importance of cybersecurity, the FCC should at least make advanced firewalls E-rate eligible now without awaiting results of the Pilot three years out.

Public comments on the draft ESL for FY 2025 are due by August 30th; reply comments are due September 16th.

Upcoming Dates:

FCC Streamlined Decisions:

The FCC issued another set of “streamlined,” precedent-based appeals and waivers last week.  As with past streamlined decisions, applicants facing similar problems as those addressed in these decisions may garner useful information by carefully reading the additional FCC explanations found in the footnotes.  The original appeal and/or waiver requests can be found online in the FCC’s Search for Filings under Docket 02-6 (E-rate) or Docket 21-93 (ECF).

In July’s streamlined decisions (DA 24-704), the FCC:

1. E-Rate Dismissed:
   1. Three Petitions for Reconsideration for failure to identify any material error, omission, or reason warranting reconsideration.
2. E-Rate Granted:
   1. One Request for Review allowing the applicant to remove ineligible items that had triggered a denial.
   2. One Request for Review and/or Waiver remanded to USAC to reconsider the eligibility of an entity.
   3. One Request for Review involving the eligibility of taxes and USF fees.
   4. One Request for Review granting additional time to respond to USAC inquiries.
   5. Five Petitions for Reconsideration and one Request for Waiver involving applications filed less than 30 days late due to unexpected illnesses or other circumstances beyond the applicant’s control.
   6. One Request for Waiver for an application filed over 30 days late due to serious illness.
   7. Seven Requests for Waiver for applications filed within 14 days of the close of the window.
   8. Four Requests for Waiver involving ministerial and/or clerical errors on applications, Form 486s, or invoices.
   9. One Request for Waiver granting a late-filed service substitution based on a “reasonable explanation” for missing the deadline.
   10. One Request for Waiver extending the invoice deadline for an applicant that had been awaiting a post-commitment request.
   11. One Request for Waiver of a special construction service delivery deadline.
3. E-Rate Denied:
   1. One Request for Review on cost-effectiveness grounds involving “routers priced two or three times greater than the prices available from commercial vendors.”
   2. Ten Requests for Waiver for late-filed Form 471 applications.
   3. One Request for Waiver for a late-filed invoice or invoice deadline extension request.

USAC’s ECF Program Newsletter dated July 30, 2024, includes a reminder of the August 29th invoice deadline for Window 3 equipment and services.  More importantly, for some applicants, the newsletter includes a series of FAQs that may affect future invoicing as a result of the Congressional funding recission act.  The following is an abbreviated summary of the most important FAQs:

Q: What does the language in the Congressional funding recission bill mean for the ECF program?
Short answer:  See USAC’s ECF newsletter for June.

Q: What impacts does rescission of unobligated funding have on ECF applicants and service providers?
Short answer:  The FCC cannot make new commitments in the course of administering the ECF program. Specifically, post-commitment requests with currently prohibited changes cannot be processed at this time.

Q: Will I need to return ECF disbursements I have already received?
Short answer:  No.

Q: If I already have a funding commitment, can I continue to submit invoices?
Short answer:  Yes.

Q: Are there any pending applications that will be affected?
Short answer:  No.

Q: What happens if I have an appeal or waiver request?
Short answer:  These may still be filed but the FCC cannot currently make new commitments.

Q: Do any of the deadlines associated with the sunset of the ECF program change?
Short answer:  No.

July’s ECF newsletter also contains articles on:

• Canceling or reducing ECF commitments.
• Returning funds.
• Inappropriate solicitations by suppliers to use excess ECF commitments.
• Reimbursement reminders.
• ECF program compliance.