• Importance of Reviewing FCDLs Carefully
• Consortium Requirements: Form 479s for PY4 and Letters of Agency for PY5

The following is a summary of the E-rate News for the Week of August 6, 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.

Importance of Reviewing FCDLs Carefully

Anecdotal reports, based on the first two waves of Funding Commitment Decision Letters (“FCDLs”) for PY4 suggest that it is important this year to carefully review all SLD funding awards and to promptly file appeals when funding errors are discovered. Early regional indications are that applicants in the northeast need to be particularly careful. The following types of problems have been reported:

Recurring services, such as local telephone, are typically documented in Form 471s by attaching sample monthly bills. SLD review guidelines in PY3 appeared to permit applicants to estimate future monthly expenses up to 15-20% above the amount shown on the sample bills. As a result of tighter auditing procedures, and perhaps more limited funds availability, initial indications during the review phase were that PY4 guidelines would permit a growth allowance of only 3-5%. Many FCDLs, however, are now being received awarding funding only to the exact level of the sample bills. In many cases, this was done without consulting the applicants. To successfully appeal this type of funding cutback, the burden will be on the applicants to show that their initial requests were based on planned service expansions that were either documented in the original applications or could have easily been provided upon SLD review.

The reclassification of routers, provided as a part of monthly Internet service, from Priority One Internet Access service to Priority Two Internal Connection service is apparently still occurring despite a clear FCC decision to the contrary. If a router is leased, and is used as an Internet interface point (i.e., not for internal building routing, its cost should be treated as a part of the monthly Internet charge. Appeals of router reclassifications should reference FCC Order 99-216 .

Funding requests for services including both eligible and ineligible components must clearly show that discounts are being requested only for the eligible portions. The SLD has an administrative rule that an entire funding request will be rejected if more than 30% of the requested amount is erroneously mischaracterized as eligible. We have seen several examples this year in which the ineligible portions of the service, for which the applicants did not request discounts, were incorrectly included in the 30% calculation and resulted in funding denials. These are SLD processing errors and should be appealed.

Application reviews during the summer months, when schools are closed or are operating with limited staff, always raise difficult issues of coordination between applicants and reviewers. Two conflicting policies were apparently at work this summer. On the one hand, reviewers had some discretion to defer the review of specific applications until the fall in situations in which they were unable to contact the applicants. On the other hand, reviewers were instructed to give applicants seven days (or less) to respond to application inquiries. Some funding decisions on service eligibility or discount rates appear to have been made unilaterally by the SLD without adequate communication with applicants. Such situations, while perhaps difficult to document, should also be appealed.

Appeals can be made directly to the SLD (most appropriate in the case of apparent SLD processing errors) or the FCC (most appropriate for issues of E-rate policy). Most appeals are first made to the SLD, in part because there is always an option to subsequently appeal unsuccessful SLD decisions to the FCC.

Appeals, particularly to the SLD, need not be highly legalistic. A simple letter, setting forth the facts, is usually sufficient. The most important factor is that the appeal be received by the SLD within 30-days of the date of the associated FCDL.

The procedures for filing a SLD or FCC appeal are well summarized on the SLD Web site .

Consortium Requirements: Form 479s for PY4 and Letters of Agency for PY5

Consortium leaders have a lot of work to do within the next month or two before they can file Form 486s to start the flow of funding for PY4 services and/or to file Form 470s to begin the application process for PY5. For large consortiums, in particular, this work must begin NOW. Specifically:

Before a Form 486 can be filed for anything more than very basic telephone service, a consortium leader must be assured that all the members are covered by approved technology plans. Generally, members that have been participating in E-rate since PY1 need updated plan approvals for PY4. If several members do not have approved plans, a Form 500 should be filed (prior to filing a Form 486) to reduce the funding commitment by an equivalent percentage.

Before a Form 486 can be filed for anything more than telecommunications service, a consortium leader must collect Form 479s from all members. The Form 479 is a new form this year to be used by consortium members to certify that they are in compliance, or are undertaking actions to comply by PY5, to the Internet filtering and policy requirements of the Children’s Internet Protection Act (“CIPA”). Assuming PY4 funding is awarded before October 28, 2001, the consortium’s Form 486, certifying that it has received Form 479s from all its members, must also be filed by that date.

Over the past year in particular, the SLD has begun checking consortium applications to assure that all parties listed as members had actually consented to having the leaders file consortium applications on their behalf. Where doubt exists, written documentation is being requested. The best way to provide documentation is to have all members submit signed letters of agency to the consortium leaders. A sample Letter of Agency (designed for schools, but easily modified for libraries) can be downloaded from our Forms Rack section.

Since most Form 486s for PY4 and Form 470s for PY5 must be filed this fall, it makes sense for consortium leaders to begin checking on technology plan approvals and collecting Form 479s and letters of agency now. Please do not wait until the last minute to request this information or, if you are a consortium member, to respond to such a request.