Please note: These are budgeted expenses, not actual expenditures. Final reported expenses may differ, but should be of the same approximate magnitude.
Since Round 3 audits are in full swing, it is not surprising that the projected audit costs are higher than average in the current quarter. But we find it stunning that audit costs are now higher than program operation costs — both much higher for the quarter and marginally higher for the full twelve months. Program operations, after all, include all the PIA application and invoice review in New Jersey, the CSB helpline services in Kansas, and the contract support for the IT systems. This is quite a milestone. It means that USAC is now budgeting to spend more dollars auditing a small number of E-rate applicants after the fact than it spends approving E-rate funding for the entire universe of applicants at the outset. Somehow, this seems backwards.
The American Recovery and Reinvestment Act of 2009 ("ARRA") provides $7.2 billion in stimulus funds to expand broadband deployment and use nationwide. Grants and loans under this initiative will be the responsibility of the Department of Agriculture's Rural Utilities Service and the Department of Commerce's National Telecommunications and Information Administration ("NTIA"). The FCC, however, has been charged with the creation of a national broadband plan. This plan is to be delivered to Congress by February 17, 2010.
As a preliminary step in this process, the FCC released a Notice of Inquiry (http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-09-31A1.pdf) seeking comments on the following broad topics:
Although E-rate applicants may wish to comment generally on the broader issues of broadband deployment, the FCC requests specific comments on the educational aspects of the proposed plan. In particular, Para. 92 states and asks:
The Commission's E-rate program helps schools and libraries obtain affordable telecommunications, Internet access and internal connections by providing discounts on eligible equipment and services. We seek comment on how this program fits into a national broadband plan. Does the Commission need additional data on the broadband needs of schools and libraries or on the services currently being supported in order to best determine how E-rate would fit into a national plan? If so, how should these data be collected?
At a minimum, one expected outcome is likely to be a more methodical approach to collecting broadband deployment data from E-rate applicants. More broadly, we can envision use of broadband stimulus funds to leverage E-rate funding for new or higher capacity state educational networks or equivalent projects.
Comments to the FCC's Notice of Inquiry are due June 8, 2009; reply comments are due July 7, 2009.
XYZ SPIN Contact Designations:
New search result language has been added to the SLD's SPIN Contact Search online database. The three most important changes are as follows:
We expect these changes to the SLD's SPIN Contact Search database to be covered in an upcoming SLD News Brief.
The SLD's latest News Brief of April 10, 2009, announces a change in the SLD's interpretation of Web hosting eligibility. Because the change will be made effective as of FY 2009, applicants who applied for Web hosting services may experience additional PIA questions. Although this process may result in additional funding, it may also delay funding decisions. Some applications, currently showing a quality assurance status, may temporarily move back to Initial Review.
It is important to note that there has been no change to the FCC's Eligible Services List for FY 2009. The Web hosting section of the ESL reads as follows:
A web hosting service that provides a means for a school or library to display content on the Internet is eligible.
Domain name registration necessary for the creation of a school or library website is eligible for discount.
Funding is limited strictly to the following eligible web hosting functions:
Some web hosting services may include ineligible features, such as software applications, end-user file storage and content editing features. Funding will not be provided for such features. Any cost allocation must be based on tangible information that provides a reasonable and appropriate delineation between the eligible and ineligible components.
What has changed is the SLD's definition of "Internet" in the first sentence. Historically, the SLD had interpreted "Internet" Web hosting as excluding any hosting of "Intranet" or other limited access (e.g., password-protected) Web pages. Beginning in FY 2009, all Web hosting — but not applications or end-user file storage — is eligible.
Here are two examples of what this might mean for Web hosting eligibility and funding:
This week's News Brief provides instructions to both service providers and applicants. The SLD will work with providers of Web-based services to either establish or re-calculate new eligibility percentages.
For applicants, the SLD has queried its FY 2009 application database to find Internet Access FRNs that include Web hosting services (as mentioned in Item 21 attachments). The SLD plans to reach out to affected applicants during PIA review to check the accuracy of Web hosting allocations. If anything, that should result in higher funding requests. To expedite the review process, the SLD suggests that applicants inform PIA if they did not apply for discounts on any Intranet services.
|Disclaimer: This newsletter may contain unofficial information on
prospective E-rate developments and/or may reflect our own interpretations of
E-rate practices and regulations. Such information is provided for planning and
guidance purposes only. It is not meant, in any way, to supplant official
announcements and instructions provided by either the SLD or the FCC.