News of the Week

Funding Status

Wave 10 for FY 2013 will be released on Tuesday, July 23, 2013, for $48.7 million.  Funding is currently being provided for Priority 1 services only.  Cumulative funding for FY 2013 will be $263 million.

Wave 52 for FY 2012 will be released on Thursday, July 25, 2013, for $21.9 million.  Priority 2 funding is being provided at 90%, and is being denied at 89% and below.  Cumulative funding for FY 2012 will be $2.67 billion.

FCC Approves NPRM to Modernize E-Rate

In an open FCC meeting held last Friday, the Commissioners unanimously approved the release of a broad Notice of Proposed Rulemaking (“NPRM”) designed to modernize the E-rate program.  Although the details of the NPRM will not be known until it is released, presumably early this week, many of the major objectives of the changes were discussed.

Discussion of the NPRM was preceded by a presentation by the LEAD (Leading Education by Advancing Digital) Commission.  Last month, the LEAD Commission had made the following five recommendations for improving the effectiveness of technology in education:
1.   Solve our infrastructure challenge by wiring schools with high-speed broadband;
2.   Build a national initiative to put learning devices in the hands of all students by 2020;
3.   Accelerate adoption of digital curriculum and encourage continued innovation;
4.   Embrace and encourage model schools; and
5.   Invest in human capital to train our teachers.

The LEAD Commission’s recommendations, which are in line with President Obama’s recent ConnectED initiative, were also presented in last week’s Senate hearing (see below), and are addressed in part in the FCC’s NPRM.

According to the FCC’s Fact Sheet, the NPRM includes the following key goals and provisions:

• Increased Broadband Capacity: To ensure schools and libraries have affordable access to 21st century broadband, the notice of proposed rulemaking seeks comment on a range of approaches to focus funds on high-capacity broadband, including:
  • Simplifying rules on fiber deployment to lower barriers to new construction
  • Prioritizing funding for new fiber deployments that will drive higher speeds and long-term efficiency
  • Phasing out support for services like paging and directory assistance
  • Ensuring that schools and libraries can access funding for modern high-speed Wi-Fi networks in classrooms and library buildings
  • Allocating funding on a simplified, per-student basis

• Cost-Effective Purchasing: To maximize the cost-effectiveness of E-rate purchases, the proposal seeks comment on:
  • Increasing consortium purchasing to drive down prices
  • Creating other bulk buying opportunities and increasing pricing transparency
  • Increasing transparency on how E-rate dollars are spent
  • Improving the competitive bidding process
  • Creating a pilot program to incentivize and test more cost-effective purchasing practices

• Streamlined Program Administration: To streamline the administration of the E-rate program, the proposal seeks comment on:
  • Speeding review of E-rate applications
  • Providing a streamlined electronic filing system and requiring electronic filing of all documents
  • Increasing the transparency of USAC’s processes
  • Simplifying the eligible services list and adopting more efficient ways to disburse E-rate funds
  • Streamlining the E-rate appeals process

• Outstanding Issues: The proposal also seeks comment on a variety of other issues, including:
  • The applicability of the Children’s Internet Protection Act (CIPA) to devices brought into schools and libraries, and to devices provided by schools and libraries for at-home use
  • Adjusting to changes in the National School Lunch Program that affect E-rate
  • Additional measures for protecting the program from waste, fraud and abuse
  • Wireless community hotspots

Disappointingly to many, the NPRM does not appear to propose any additional funding for E-rate.  Assuming that the full NPRM is released early this week, a fuller analysis of the NPRM will begin in our newsletter next week.

E-Rate Updates and Reminders

Last Week’s Senate E-Rate Hearing:

The U.S. Senate Committee on Commerce, Science, and Transportation, chaired by E-rate supporter Jay Rockefeller (D-WV), held a two-hour plus hearing on E-rate last Wednesday.  The Senators and the four panelists were highly supportive of the accomplishments of the E-rate program while discussing what improvements were needed, particularly to ensure access to higher-speed and wireless broadband services.  An archived video of the hearing is available (the hearing started late, so move the “time bar” at the bottom of the screen to about 33:40).

The hearing was long on praise for the program, but short on specific suggestions for improvement.  Several points we found interesting were:

1. The hearing appeared to have been called on fairly short notice to precede and provide context to the FCC’s public meeting two days later (see article above) to consider an E-rate NPRM order.
2. Sen. Mark Begich (D-AK) took specific aim at a proposal being circulated by Funds For Learning, and more recently by FCC Commissioner Ajit Pai (see A Student-Centered E-Rate Program - Summary), for a per student cap on funding.  Sen. Begich took particular note of the devastating effect such a measure would have on one of his very small rural Alaskan districts Pelican City SD (with only 11 students as of its FY 2013 application).
3. Sen. Edward Markey (D-MA) joined the Committee last week having been just elected to the Massachusetts Senate seat recently vacated by Secretary of State John Kerry.  Sen. Markey had been the leading E-rate proponent in the House of Representatives since the program’s inception.  With Sen. Rockefeller set to retire at the end of current term in 2014, it is good to see that there will be continuing Senate support for the E-rate program.

Form 470 and Form 471 Revisions:

The FCC has released draft revisions of the Form 470 and the Form 471 for public comment (DA 13-1590).  See:
Draft Form 470                       Draft Form 470 Instructions
Draft Form 471                       Draft Form 471 Instructions

The two biggest changes from a form completion viewpoint — one good, one not so good — are:

1. As per the FY 2013 rules change, the Form 470’s Summary Description of Needs or Services Requested combines Telecommunications and/or Internet Access into a single Priority One category.
2. In an effort to collect additional information about broadband connections, the revised Form 471 proposes to do away with the current Block 2 “Impact of Services Ordered” table, replacing it with a similar, but more detailed table (Item 24) of lines, line types, and download speeds for each connectivity-related FRN.  Separate questions — which could be a nightmare for consortia in particular — ask for the percentages of classroom or library spaces which will access wired drops and/or Wi-Fi signals (possibly adding up to more than 100%).  The Form 471 instructions state the Item 24 responses are not meant to substitute for complete Item 21 attachments, but that they should be consistent.

Comments on the proposed new forms are due August 16th; reply comments are due August 30th.

SLD Fall Applicant Training Schedule:

The SLD has scheduled eight one-day applicant training sessions this fall from late September through early November.  Currently the Houston, Los Angeles, and Washington DC sessions are closed, and registrations are being accepted on a waiting list only basis for the remaining sessions in Atlanta, Minneapolis, Newark, Portland, and St. Louis.

Special Edition Schools and Libraries News Brief Dated July 19 – New Invoice Forms

The SLD issued a Special Edition News Brief for July 19, 2013, to discuss the immediate invoicing implications of the revised versions of Form 472 (the Billed Entity Applicant BEAR Reimbursement, or “BEAR,” form) and Form 474 (the Service Provider Invoice, or “SPI,” form).  Both forms, as well as Form 473 (the Service Provider Annual Certification, or “SPAC,” form), had been put out for public comment last March, but were just approved by the Office of Budget and Management (“OMB”) last week.  The revised Forms 472 and 474 were approved with a few changes from the original drafts.

Most significantly, the revised forms became effective this Monday, July 22nd.  Unfortunately, as a result of new BEAR and SPI information requirements, online versions of the new forms will not be immediately available.  The SLD has indicated that this process may be at least a 1-2 week process.  Until the new online versions are ready, applicants and service providers wishing to file invoices must use paper versions of the forms, available Monday in the Forms section of the SLD website (and in a type-in version later this week in E-Rate Central’s online Forms Rack).

The following procedures regarding the interim use of paper forms are of note:

1. The previous 2007 version of the paper BEAR form will be accepted only if postmarked before July 22nd.  Existing paper BEARs in process, but not yet submitted, will have to be redone using the new 2013 version.
2. Existing online BEARs (i.e., those actually submitted by applicants before July 22nd) will be accepted and processed on or after July 22nd as long as the service providers complete their online acknowledgments in a timely fashion.
3. To facilitate the filing of paper BEARs and SPIs during the transition period, completed forms may be faxed or e-mailed (see instructions in the Special Edition News Brief).

The major changes to the new versions of the forms are as follows:

1. BEAR and SPI invoicing data now include the FRN discount rate.
2. The new SPI form includes filer contact information.
3. Numerous changes have been made to the certification sections.  A controversial Lowest Corresponding Price (“LCP”) service provider certification in the Form 473, proposed in the original March 2013 draft, was eliminated from the approved 2013 version — presumably as a result of strong objections in several service provider comments.
4. As a result of suggestions going back a number of years, the following new section has been tacked on the BEAR form to provide applicant BEAR remittance information:

   27. Applicant Remittance Information

   Name
   Title

   Street Address