• Looking Back on 2000
• Looking Ahead to 2001
• Weekly Items – In Brief

As a change of pace – and because it was a quiet vacation week – the following is a summary of the major E-rate News for the Year of 2000, and a quick look ahead to 2001. We also highlight two new items that appeared this past week on the SLD’s Web site. Additional and archived information appears in E-Rate Central’s Web site .

Looking Back on 2000

The biggest news for 2000 was the funding for program year three ("PY3"). Originally targeted for completion by early May, weekly waves began in April and continued through Wave 29 (mailed December 1). So far, the SLD has awarded PY3 funding totaling almost $2.1 billion, including $268 million for NYS applicants. Perhaps an additional $50 million will be awarded in early 2001 for applications that have still not been processed. That would leave about $100 million for successful PY3 appeals.

The early May target for the completion of PY3 funding was designed to eliminate the need for discount reimbursements. With the funding delays, and with a strongly expressed preference by many applicants for reimbursement checks, the BEAR form is here to stay. Vendors and applicants have been left to decide whether awards will be realized through discounted billing or BEAR reimbursements.

PY2 has become the program year that will not die. First, the FCC extended the period for utilizing non-recurring funding until September 30 to provide the summer months for new installations. The SLD set an initial deadline of November 20 for the submission of BEAR forms and supplier invoices, but has since made it clear that such forms will continue to be processed until some final deadline probably to be set sometime in February. Applicants, who did not receive final PY2 funding letters – either because of appeals or pending SPIN changes (see below) -- until April 4, 2000, or later, have been given until September 30, 2001, to complete their installations. The BEAR deadline for these applicants is December 29, 2001.

Then, of course, there remains the issue of out-of-the-window PY2 applications. Last March, when it became clear that there would be additional funds available beyond the needs of applicants that filed within the initial PY2 window, the SLD opened a new filing window for a month. Funding of those new, and previously filed out-of-the-window, applications should begin soon. This processing could extend for some time if the SLD decides to wait until after it cancels earlier and unused funding awards to see what extra PY2 funds are available (see below). If this goes too late into next spring, the FCC may give late PY2 E-rate recipients until September 30, 2002, to complete funded installations. Not bad for a year that technically ended June 30, 2000!

Other interesting developments in 2000 included:

• The first set – albeit only 17 (two in New York) – of on-site audits of E-rate applicants by Arthur Anderson (and an audit of the SLD itself by GAO);

• A FCC appeal decision – followed by a public comment period and further FCC review and confirmation – of new and more flexible rules for post-commitment SPIN changes;

• Too numerous to count FCC decisions denying appeals that missed the 30-day appeal window;

• The redesign – to tepid reviews – of the SLD Web site (including a much better online Form 471 entry system);

• The end of SLD-run applicant training sessions (replaced, in New York, by a dozen sessions run by E-Rate Central);

• The introduction of a quarterly benefits statement for E-rate applicants; and

• Passage of new legislation requiring Internet filtering by schools and libraries as a condition of federal technology funding (see below).

Looking Ahead to 2001

The first key event in 2001 will be the close of the PY4 application window on January 18. To stand any reasonable chance of funding for the 2001-2002 E-rate year, applicants must have completed applications postmarked by this date. (Look for SLD guidance this coming week on the postmarking procedure when using express mail services.) Unlike last year (when applicants were given an additional week), online filers must be sure to complete their applications by mailing the signed certification pages and Block 5 attachments within the window period.

PY2 applicants, who have not yet filed 486s and BEARs for normally funded FRNs (i.e., not delayed by appeals and SPIN changes), should look for letters from the SLD in January setting a final date for use of these funds. Funds not being used by this time may be released for reassignment to others.

The new Bush administration may mean some changes for the E-rate program, if only an end to the "Gore tax" characterization. Practically, we expect no major program changes through at least PY5.

The most contentious issue in 2001 is likely to be the implementation of the Internet filtering requirement enacted by Congress at the end of 2000. Exact details on the impact and timing of this requirement have yet to be settled and legal challenges are expected. E-rate applicants, that are not yet filtering, should begin to explore their options. If required for PY4 funding use, expect the SLD to introduce a new version of the Form 486 this spring incorporating a filtering certification.

Technology plan approvals, required for E-rate, are good for up to three years. That means that many applicants, involved in E-rate since PY1, will be required to have updated plans approved later in 2001 (by the time they file Form 486s for PY4 funding). NYS public schools and libraries will be receiving correspondence from NYSED shortly on the recommended process for new plan approvals. Private schools in NYS can use the existing approval process. Look for additional information on this topic in a future issue of E-rate News of the Week.

Weekly Items – In Brief

The following two items, just added to the "What’s New" section of the SLD Web site, should be noted:

1. A detailed description of the circumstances under which schools or libraries can extend the use of non-recurring PY2 funding through September 30, 2001 (as discussed above); and

2. Additions to the SLD’s Web site Reference Section, including tips for completing Form 471.