|Several notices and decisions were released by the FCC
last week that may be of interest to the E-rate community.
(1) FCC Chairman Michael Powell announced that he will be leaving the Commission
in March. Mr. Powell has been a Commissioner since 1998, and served as Chairman
during President Bush's first term. We would expect the announcement of a new
Chairman appointee within the next month or two.
(2) The FCC consolidated and ruled on 47 requests by various service providers
to relieve them of COMAD repayment responsibilities. COMAD, which stands for
"Commitment Adjustment," is a process under which funds disbursed in violation
of E-rate rules can be recovered. Until an FCC Order last summer (see
Fourth Order), funds were generally recovered through service providers
who, in turn, were left to their own devices to seek repayments from
applicants. Under new rules resulting from the Order, USAC is to seek recovery
directly from the responsible parties (applicants or service providers).
Consequently, in last week's decision, the FCC remanded all 47 cases back to
USAC to determine responsibility for the violations.
(3) Last October, Sprint and BellSouth filed a joint petition for
reconsideration of two E-rate rules (see
Sprint Petition). The most significant issue for applicants involves a
FCC conclusion that if an applicant has not paid its non-discounted share of
charges within 90 days of delivery of services, that the applicant should be
deemed in violation of the E-rate rules and that any associated funds disbursed
should be recovered. The petition argues that the 90 day window "...is
arbitrary and capricious; fails to reflect common billing practices in the
E-rate market, and USAC's payment track record; and has excessively harsh
consequences..." The FCC established a pleading cycle on this petition
requiring comments by February 16 and reply comments by March 3 (see
(4) In December, Connect2 - the original poster child for waste, fraud, and
abuse - filed five petitions on SLD decisions concerning the recovery of E-rate
funds over and above Connect2's previous criminal settlement with the
Department of Justice. The FCC established a pleading cycle on this petition
requiring comments by February 22 and reply comments by March 9 (see