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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554
                                   
In the Matter of                        )
                                   )
Request for Review                      )
of the Decision of                      ) 
the Universal Service Administrator by       )    
                                   )
Enterprise City School District              )    File No. SLD-46073
Enterprise, Alabama                     )
                                   )
Federal-State Joint Board on Universal Service    )    CC Docket No. 96-45
                                   )    
Changes to the Board of Directors            )
of the National Exchange Carrier             )    CC Docket No. 97-21
Association, Inc.                       )
                                   
                             ORDER

          Adopted:  October 8, 1999     Released:  October 8, 1999

By the Deputy Chief, Common Carrier Bureau:

     1.   The Common Carrier Bureau has under consideration a Letter of Appeal filed by
Enterprise City School District, Enterprise, Alabama on May 14, 1999, seeking review of a
decision issued by the Schools and Libraries Division (SLD) of the Universal Service
Administrative Company (USAC or Administrator).  Enterprise seeks review of the SLD's denial
of its application for discounts for internal connections 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 Enterprise's application for discounts for internal
connections services.

     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.   In the Fifth
Reconsideration Order, the Commission established new rules to govern how discounts will be
allocated when available funding is less than total demand.  These rules provide that requests for
telecommunications and Internet access services shall receive first priority for available funds and
that requests for internal connections shall receive secondary priority.  When sufficient funds are
not available to fund all requests for discounts on internal connections, the Administrator shall
allocate funds for discounts to schools beginning with those applicants eligible for a ninety percent
discount level and, to the extent funds remain, continue to allocate funds for discounts to
applicants at each descending single discount percentage, e.g., eighty-nine percent, eighty-eight
percent, and so on.  For this first funding year, the Administrator allocated funds to cover
discounts down to the seventy percent level.  

     3.   In accordance with the Commission's rules, the discount available to a particular
school is determined by indicators of poverty and high cost.  The level of poverty for schools and
school districts is measured by the percentage of their student enrollment that is eligible for a free
or reduced price lunch under the national school lunch program or a federally-approved
alternative mechanism.   A school's high cost status is derived from rules that classify it as urban
or rural.  The rules provide a matrix reflecting both a school's urban or rural status and the
percentage of its students eligible for the school lunch program to establish a school's discount
rate, ranging from 20 percent to 90 percent, to be applied to eligible services. 

     4.   In applying for funding for the 1998 funding year, Enterprise indicated that its
discount eligibility was 70 percent.  In its Funding Notification Letter dated February 24, 1999,
the SLD granted Enterprise's request for funding for telecommunications services, but denied its
request for internal connection services, finding that its discount level was below 70 percent.

     5.   On April 15, 1999, the SLD affirmed its initial decision and denied Enterprise's
appeal.  It explained that Enterprise's calculation of its discount was based upon the "feeder
school" method, an unacceptable methodology, and indicated that it was unable to verify
Enterprise's requested discount.  The so-called "feeder school" method determines the number of
eligible students in a high school based on the number of eligible students in the elementary or
middle schools whose students will attend that high school.  On May 14, 1999, Enterprise filed an
appeal of SLD's decision with us. 

      6.  We have reviewed Enterprise's appeal and conclude that Enterprise has not shown
that its request for funding for internal connections was improperly denied.  Enterprise's
documentation supporting its 70 percent discount level was based upon the feeder method, not
one of the acceptable methods set out in the Commission's rules and orders for calculating the
discount.  Schools that do not use an actual count of students eligible for the national school
lunch program may use only the federally-approved alternative mechanisms contained in Title I of
the Improving America's Schools Act, which does not include the feeder method.  In fact, the
Commission specifically rejected commenters' suggestions that would have permitted showings,
such as the feeder method, that would merely approximate the percentage of low income children
in a particular area.   Because the burden of supporting the requested discount level falls on the
applicant and absent an independent verification of the requested discount, the SLD was unable to
grant the request.  
 
     7.   To the extent that Enterprise argues that other schools received funding based
upon the feeder method, this statement was not supported by additional facts or evidence. 
Furthermore, each applicant bears the independent responsibility of providing acceptable support
that complies with the rules and guidelines governing this program, regardless of what may have
been provided by other schools or libraries. Therefore, we do not believe that this contention
warrants further consideration.

     8.   ACCORDINGLY, IT IS ORDERED, pursuant to authority delegated under
sections 0.91, 0.291, and 54.722(a) of the Commission's rules, 47 C.F.R.  0.91. 0.291, and
54.722(a), that the appeal filed by Enterprise City School District, Enterprise, Alabama on May
14, 1999 IS DENIED.

                              FEDERAL COMMUNICATIONS COMMISSION



                              Lisa M. Zaina
                              Deputy Chief, Common Carrier Bureau