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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 ) In the Matter of ) ) Bellevue Public Library ) CC Docket No. 96-45 Bellevue, Ohio ) ORDER Adopted: July 6, 1999 Released: July 6, 1999 By the Common Carrier Bureau: 1. The Common Carrier Bureau has under consideration a "Letter of Appeal" filed by Bellevue Public Library, Bellevue, Ohio (Bellevue) on April 7, 1999, seeking review of a decision issued by the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC or Administrator). Bellevue seeks review of the SLD's denial of its application for discounts for telecommunications services under the schools and libraries universal service support mechanism. For the reasons set forth below, we deny the "Letter of Appeal" and affirm the SLD's denial of Bellevue's application for discounts for telecommunications services. I. BACKGROUND 2. Under the schools and libraries universal service support mechanism, eligible schools, libraries, and consortia that include eligible schools and libraries, may apply for discounts for eligible telecommunications services, Internet access, and internal connections. The Commission's rules provide that, with one limited exception, an eligible school, library or consortium must seek competitive bids for all services eligible for support. The Commission reasoned that competitive bidding would ensure fiscal responsibility and would be the best means for ensuring that eligible schools and libraries are able to receive services at the most competitive rates. 3. To comply with this competitive bid requirement, the Commission's rules require that an applicant submit to the Administrator a completed FCC Form 470, in which the applicant lists the services for which it seeks discounts. The Administrator must post the FCC Form 470 on its website and the applicant is required to wait 28 days before making a commitment with a selected service provider. The rules also require that the Administrator send confirmation to each applicant that its FCC Form 470 has been received and posted (Receipt Acknowledgment Letter). After the FCC Form 470 has been posted for 28 days, and the applicant has selected a service provider, the applicant must submit to the Administrator an FCC Form 471, which lists the services that have been ordered. If the Administrator has established a filing window, all FCC Form 471s submitted during the filing window will be treated as if they were simultaneously received. For the first funding period, the filing window opened on January 30, 1998 and closed on April 15, 1998. 4. The Commission's rules provide a limited exemption from the 28-day competitive bid requirement for applicants that have "pre-existing contracts," as defined by the Commission's rules. As described in the instructions for completing FCC Form 470, services ordered pursuant to a tariff do not constitute a "pre-existing contract." Item 10 in Block 3 of the FCC Form 470 directs the applicant to check the box if it has an existing, binding contract. If an applicant checks Item 10, the SLD will not post the FCC Form 470. Applicants with existing contracts are still required, however, to wait 28 days before filing their FCC Form 471. 5. Based on Bellevue's FCC Form 471, the SLD determined that Bellevue did not have a pre-existing contract that would have exempted it from the competitive bid requirement, but rather had ordered services pursuant to a tariff. Accordingly, by letter dated December 30, 1998, the SLD denied Bellevue's request for discounts for tariffed telecommunications services on the ground that Bellevue's FCC Form 470 was not posted on SLD's website for 28 days, in violation of the Commission's competitive bid requirement. Bellevue appealed the SLD's decision on January 27, 1999. In its appeal, Bellevue claimed that its FCC Form 470 was in fact posted on the SLD's website. In support of this claim, Bellevue submitted a dated copy of the FCC Form 470 signature page and a copy of the Universal Service Control Number (USCN) assigned to it when it filed its FCC Form 470. Bellevue also argued that, because the Receipt Acknowledgment Letter stated that the SLD had received its properly completed FCC Form 470, any problem with its FCC Form 470 should have been raised in the Receipt Acknowledgment Letter. Bellevue further noted that the Receipt Acknowledgment Letter indicated that "`[a]ccording to FCC rules, because your Form 470 lists only descriptions of services currently being provided under pre- existing contracts, it will not be necessary to post your application on the SLC web site.'" In this regard, Bellevue appears to have argued, in the alternative, that, according to the Receipt Acknowledgment Letter, it was not required to post its FCC Form 470. In any event, Bellevue claimed that it complied with the 28-day waiting period before filing its FCC Form 471. 6. On March 11, 1999, the SLD affirmed its initial funding decision and denied Bellevue's appeal. In the "Administrator's Decision on Appeal," the SLD explained that Bellevue's request for tariffed telecommunications services was not posted on the web site for 28 days because Bellevue had checked Item 10 in Block 3 on FCC Form 470, which directs the applicant to check the box if the applicant has an existing, binding contract. The SLD further explained that the only exemption from the Commission's competitive bid requirement is for services that were the subject of an existing contract prior to January 30, 1998. Because Bellevue did not have a "pre-existing contract," the SLD denied Bellevue's appeal of the SLD's funding decision for failure to comply with the competitive bid requirement. II. DISCUSSION 7. In Bellevue's request for review of the SLD's decision that is now before us, Bellevue reiterates the arguments previously presented to the SLD. For the reasons set forth below, we conclude that the SLD properly denied Bellevue's application for discounts for tariffed telecommunications services. 8. Consistent with our obligation to conduct a de novo review of appeals of decisions made by the Administrator, we have reviewed Bellevue's FCC Form 470 and FCC Form 471. We have confirmed that Bellevue did check Item 10 in Block 3 of FCC Form 470 indicating that it had a "pre-existing contract." Based on Bellevue's indication in its application that it had a pre-existing contract, the SLD, consistent with the Commission's rules, did not post Bellevue's FCC Form 470 on its website. Bellevue's submission of a dated copy of the FCC Form 470 signature page and a copy of the USCN is not evidence that its FCC Form 470 was in fact posted. Pursuant to the Commission's rules, it is SLD's responsibility to post to its website all properly filed FCC Form 470s and SLD will not post FCC Form 470s if the applicant has checked Item 10 in Block 3 of FCC Form 470. Because Bellevue indicated that service would be received pursuant to a "pre-existing contract" by checking Item 10 in Block 3, the lack of posting and competitive bidding was due to Bellevue's own error and thus disqualified it from receiving approval. 9. We also have confirmed that Bellevue's FCC Form 471 indicates that it would receive the telecommunications services for which it sought universal service support under the schools and libraries universal service support mechanism pursuant to a tariff, not an existing contract. Accordingly, because only applicants with existing contracts, as defined in 47 C.F.R.  54.511(c)(1), are exempt from the Commission's competitive bid requirement, and because the instructions for FCC Form 470 clearly state that tariffs do not constitute "pre-existing contracts," we find that the SLD properly denied Bellevue's funding request for failure to comply with the 28- day competitive bid requirement. The fact that Bellevue waited for 28 days before filing its FCC Form 471 does not cure its failure to comply with the Commission's competitive bid requirement, which ensures the most efficient and effective use of funds under the schools and libraries universal service support mechanism. 10. Finally, to the extent the Receipt Acknowledgement Letter indicated that it would not be necessary for the SLD to post Bellevue's FCC Form 470 because the services for which it sought support were being provided under pre-existing contracts, we find that Bellevue was on notice once it received the Receipt Acknowledgment Letter that there was an error in its application. Indeed, had Bellevue recognized its mistake at that time, there would have been sufficient time for Bellevue to resubmit its FCC Form 470 for posting on the SLD's website for 28 days and to submit its FCC Form 471 within the filing window. 11. ACCORDINGLY, IT IS ORDERED, that the "Letter of Appeal" filed by Bellevue Public Library, Bellevue, Ohio, on April 7, 1999 IS DENIED. FEDERAL COMMUNICATIONS COMMISSION Lisa M. Zaina Acting Deputy Bureau Chief Common Carrier Bureau