News of the Week

FY 2016:

USAC, which is still encountering application review and processing problems, did not release a new wave last week. Wave 13 for FY 2016 is scheduled to be released today, September 19th. Cumulative national funding through Wave 12 is $521 million — less than one-third the $1.80 billion mark achieved at this point last year for FY 2015. It also appears that no special construction projects have as yet been approved.

FY 2015:

USAC will release Wave 64 for FY 2015 on Thursday, September 22nd. Cumulative funding through Wave 63 is $3.31 billion.

The FCC issued the Eligible Services List (“ESL”) for FY 2017 (DA 16-1023). With additional clarifications, the final ESL is fundamentally similar to the current year’s ESL and the draft version released for comment in early June. The four minor revisions and/or clarifications include:

1. A change in the definition of eligible leased dark fiber “to further explain the distinction between leased dark fiber and self-provisioned fiber,” and to clarify that applicants seeking bids for leased dark fiber must consider bids for leased lit fiber regardless of whether or not such bids include special construction.
2. A reorganization and title change for a section providing eligibility explanations for Category 1 and Category 2 services.
3. A revised explanation (including a new FAQ) of how to classify connections between multiple schools for the purpose of Category 1 and Category 2 support.
4. A new definition of “campus,” important in distinguishing between Category 1 and Category 2 services, referring to the “geographically contiguous” property of a single school. It is important to note that:
   1. The FAQ clearly indicates that a “public right-of-way,” previously a presumptive separation between two properties, no longer applies. Indeed, a public right-of-way is now explicitly not a dividing line between one campus and another. Thus, a single school (as defined by the state) with buildings across the street from each other is now defined as part of a single campus. Connections between the buildings are considered Category 2.
   2. A single school, however, may have multiple campuses if it has two or more buildings that are not contiguous (or, as the ESL puts it, buildings that are “miles apart”). In this case, connections between multiple campuses are considered Category 1.
   3. Having defined a campus in terms of a single school’s contiguous property, the ESL confuses the issue by sometimes referring to “different schools or libraries” located on the same “campus.”  Elsewhere, the FCC clarifies that different schools (e.g., a high school and a middle school) on the same “grounds” (or even in the same building) are not on the same “campus.”  Connections between different schools are always considered Category 1.

As has been the case in most previous ESL proceedings, the FCC again rejected requests to add additional eligible services. The FCC also rejected requests to eliminate (or even defer) the annual phase-out of discounts for voice services.

New “FST” Data Tool Available:

USAC released Version 1 of its new DRT-like FY 2016 funding report, the “FRN Status Tool (FY2016).” There’s no word yet from USAC on a new acronym for the tool, so we’ll use “FST” to distinguish it from the original Data Retrieval Tool (“DRT”). Generally, the new FST will be easier use than the more complex View/Download FCC Forms 471 for FY2016 tool. Both tools are now available under USAC’s Search Tools. The FST is displayed as:

Version 1 of the FST is somewhat limited. Although searchable, it provides only “Standard Report” access to the following 17 data fields:

Particularly welcome additions for non-EPC access to FY 2016 data are:

1. The “471 Review Status;” and
2. The “486 Service Start Date” that, when present, indicates that the associated Form 486 has been submitted and approved.

Version 2 of the FST, containing still more data elements, is expected to be released in the October/November timeframe. A list of the additional fields to be added in the “detailed report” is provided in the posted FRN Status Tool Instructions.

Documenting PIA Responses:

Applicants responding to PIA inquiries are advised to keep a hardcopy record of their questions and answers. EPC does maintain completed electronic copies of an applicant’s Q&As, but there’s a trick to finding them (or finding one specific one).

One problem during the initial response process is that the visible portion of textual answers is limited. You can only see (and print out) so many characters without using your cursor or arrow keys to slide over and see other portions of the answer. (Hint: Keep a Word document open on the side. You can highlight, cut, and paste an entire EPC text answer into Word. Or, conversely, you can type an answer in Word, and cut and paste it into the EPC field.)

A larger problem is that all questions and answers in a particular PIA set of inquiries appear to disappear when you “Submit” them. If it’s the last (or only) set of inquiries, and you would like to “Review Inquiries,” what you initially see is a “No Pending Inquiries” message and a blank field for previously “Submitted Inquiries.”

The trick at this point is to click on the little plus-sign-in-a box in the lower right-hand corner to expand the hidden list of “Submitted Inquiries.”  The “Name” of each inquiry, although showing only the general nature, is hot-linked to a display of that set of questions and submitted answers (including the full text of the responses).

Non-Recurring Service Delivery Deadline September 30th:

The regular service delivery deadline for non-recurring services (e.g., the delivery and installation of Category 2 equipment or the installation charge component of Category 1 services) for FY 2015 is September 30, 2016. Requests to extend this deadline must be made on or before this date. Note the following:

1. FY 2015 non-recurring service delivery deadlines already may have been automatically extended one full year if the associated FRNs, FCDLs, operational SPIN changes, or service substitutions were approved on or after March 1, 2016.
2. Service delivery deadlines may also be extended upon request if: (a) USAC payments on valid invoices had been withheld; or, more commonly, (b) “the service provider was unable to complete delivery and installation for reasons beyond the service provider’s control.”
3. A service delivery extension request may be made only by an applicant via a Form 500 (Section 8, page 2). Although the Form 500 requires only a simple check-off for one of the acceptable extension reasons, USAC will generally require a fuller explanation before the extension is granted. Since the Form 500 is a paper form, an applicant may shorten the approval process by appending that explanation when submitting the form.
4. The easiest way to check if a service delivery extension request has been approved is by using USAC’s Display FRN Extensions tool, previously referred to as the “FRN Extension Table.”  This tool shows both invoice and service delivery deadline extensions. Service delivery extensions will also automatically extend the associated invoice deadline.
5. Often, when a service delivery deadline is extended, the associated contract must also be extended. This is a separate two-step process, namely:
   1. The applicant and the service provider must agree in writing to extend the contract through the new service delivery deadline; and
   2. The applicant must notify USAC of the extended contract expiration date, again via a Form 500 (Section 7, page 2). Note: If the applicant first extends the contract, the same Form 500 may be used to request the service delivery extension and to notify USAC of the new contract expiration date.

ALA Softens Stance on Library Internet Filtering:

The American Library Association (“ALA”) conducted a webinar last week discussing E-rate, filtering, and cyber-security. Historically, the ALA has been a strong critic of E-rate’s CIPA requirements, particularly the requirement to filter Internet access. To date, many libraries have foregone E-rate discounts — except, in some cases, for telecommunications services not subject to CIPA.

As noted in its webinar slides, the ALA still “cannot” recommend filters and continues to support libraries that don’t filter. Its stance, however, seems to be softening. It now “understands” that some libraries feel they must filter either because of local (e.g., political) or economic considerations.

Changes in the E-rate rules have dramatically changed the economics of, and to what extent, libraries would or would not participate in E-rate. In particular:

1. The phase-out of discounts for voice services is severely cutting the benefits of those libraries previously limiting E-rate use to telecommunications-only services; and
2. Enhanced funding for broadband Internet and internal WiFi services, increasingly needed by the libraries, is enhancing the value of E-rate.

ALA’s focus in this webinar was a call to minimize filtering for libraries needing to be CIPA-compliant, recommending:

1. Selecting the most flexible filter
2. Maintaining maximum local control
3. Using the lowest filter setting possible, i.e.:
   1. Blocking as little as possible consistent with CIPA
   2. Not be tempted to block otherwise “offensive” content just because a filter makes that “easy to do”

FCC Proposes 4Q16 USF Contribution Factor:

The proposed contribution factor (see DA 16-1024) for the fourth quarter of 2016 is 17.4%. This is the percentage of interstate and international telecommunications revenues charged to telecommunications carriers to support the four Universal Service Fund (“USF”) programs, including E-rate. The 4Q16 percentage rate is consistent with recent quarters. What is significant, however, is that the contributing factor associated with the E-rate program’s requirement to fund FY 2016 equates to barely over $1.6 billion on an annual basis — only because the FCC had previously rolled over $1.9 billion in unused funding from earlier years, the largest roll-over amount in E-rate history.

Looking forward to FY 2017, and with three quarters to go, the amount of E-rate funds available for roll-over is just $200 million. Assuming a lower roll-over amount for FY 2017, the USF contribution factor may climb closer to 20%.

FCC Seeks Nominations for USAC Board:

The FCC issued a Public Notice (DA 16-1018) seeking nominations for six positions on the USAC Board. Terms of the current Board members in these slots expire December 31, 2016. From an E-rate perspective, the two most important nominations are held by Robert Bocher (an experienced E-rate consultant for the Wisconsin Department of Public Instruction), representing libraries, and Dr. Daniel A. Domenech (Executive Director of the American Association of School Administrators), representing schools. Both are expected to seek re-nomination.

Nominations are due October 21, 2016.

USAC Fall Training Schedule:

USAC has posted the following locations and dates for its annual fall training series on its Trainings & Outreach site. Note that registration for two of these sessions is already on a waiting list basis.

USAC’s Schools and Libraries News Brief of September 16, 2016, encourages applicants to use the RAL modification process to update telecommunications line counts on pending Form 471 applications. USAC has found that many applicants requesting discounts for multiple circuits had simply entered the total monthly cost of those circuits, specifying a unit count of “1,” instead of breaking out the number of lines and the associated unit costs. USAC notes that applicants can speed the review of their own applications by updating them prior to PIA review. The News Brief contains instructions for making RAL changes to update this data.

Last week’s News Brief also discusses its new FST tool and the FCC’s final ESL for FY 2017, both discussed above.