• First PY4 Funding Wave Released
• Revised Form 486 Now Available
• SLD Updates FRN Extension Table

The following is a summary of the E-rate News for the Week of July 16, 2001, prepared by E-Rate Central. Official SLD news appears in the “What’s New!” section of the SLD’s Web site . Additional and archived information appears elsewhere on this Web site.

First PY4 Funding Wave Released

The first wave of Funding Commitment Decision Letters (“FCDLs”) for program year four (2001-2002) has been processed and is being mailed to applicants on Monday, July 23. At the same time, the information should be available on the SLD’s Web site .

Because the backlog of commitments has been building, as the SLD awaited a FCC decision on funding priorities for internal connections and on approval of new and revised forms, the first wave is a large one. Total funding in Wave 1 is $395 million. It includes over 17,800 FCDLs representing decisions on over 50% of the applications received – the largest wave in the program’s history.

Funding in Wave 1 was awarded only for Priority One (telecommunications and Internet access) services. The critical question of Priority Two (internal connections) funding for PY4 was only tangentially addressed. The SLD announced definitively that no internal connections funding would be available for applicants with discount rates of 84% or less. It also confirmed that this funding threshold is likely to move upwards and, as previously discussed, that there may not be enough funds to fully fund all 90% requests.

The applications addressed in Wave 1 included those requesting only Priority One discounts and/or those requesting Priority Two discounts at the 84% level or below. In the latter case, these internal connection requests were denied on the basis of insufficient program funding. Based on the high percentage of applications addressed in Wave 1, but on the proportionally lower amount of available funding awarded, it is clear that the majority of the applications processed were for smaller applicants. The larger and more complex applications, and those involving internal connection requests at the higher discount rates, remain to be processed.

The SLD expects to release additional waves of FCDLs at two-week intervals. Wave 2 should be mailed on Friday, August 3. We anticipate that the next few waves will follow the same pattern as in Wave 1 by focusing on the smaller applications and funding only Priority One services. Based on an assumption that internal connection funding will only be available for, and will have to be prorated among, 90% applicants, high discount internal connection applicants will not receive FCDLs until late in the funding cycle (sometime this fall).

Revised Form 486 Now Available

Slightly in advance of Wave 1, the SLD has released the revised version of Form 486 that includes the new CIPA certification requirements. A copy of the form and instructions are posted on SLD’s Web site .

The revised Form 486, with the date “July 2001” in the lower right-hand corner of each page, should now be used for all funding year Applicants filing Form 486s for PY3 or earlier are instructed to skip the Item 11 CIPA certification.

The instructions and filing deadlines for the revised Form 486, and the new Form 479 for consortium members, are a bit complex because of the CIPA certification requirements. We will not try to summarize and simplify all 24 pages of the Form 486 instructions here and now, but need to note several points immediately applicable to applicants receiving early wave FCDLs and to consortium leaders.

• PY4 applicants funded before October 28 (prospectively Waves 1-8), for services beginning anytime between July 1 and October 28, 2001, must file Form 486s on or before that date. The filing date will be determined by postmark (and October 28 is a Sunday). If an applicant misses this filing deadline, discounts will be provided only from the date of the eventual postmark.
  
  
• Before a Form 486 can be filed for a consortium, for anything other than telecommunications services, the consortium leader must have received Form 479s from all consortium members. (If the application is for both telecommunications and other services, and some members receive only telecom services, the consortium leader must either file a separate Form 486 for the telecom FRNs or solicit Form 479s for the combined Form 486 from the telecommunications members as well.) To meet a Form 486 filing deadline of October 28, the Form 479 collection process must be begun well in advance.
  
  
• Form 486, Form 479, and instructions make constant reference, not to an “applicant” or “consortium,” but to a “Billed Entity” or “Administrative Authority.” The term “Administrative Authority” is a legal nicety, used for CIPA certification purposes, to refer to an entity with authority to administer the required Internet Safety Policy. As a general rule, a school or library that has filed its own E-rate application will be both the Billed Entity and the Administrative Authority. In the case of consortium applications, the consortium leader will be the Billed Entity and each consortium member will be separate Administrative Authority.

Note: This form, along with all other required E-rate forms, may also be found on this Web site on our Forms Rack page.