E-Rate Central News for the Week
May 24, 2010
The E-Rate Central News for the Week is prepared by E-Rate Central. E-Rate Central specializes in providing consulting, compliance, and forms processing services to E-rate applicants. To learn more about our services, please contact us by phone (516-801-7804), fax (516-801-7810), or through our Contact Us Web form. Additional E-rate information is located on the E-Rate Central Web site.
Funding Status
Wave 54 for FY 2009 will be released on Tuesday, May 25th for $11.5 million. Beginning with this wave, Priority 2 funding is being approved at 78% (down from 80%) and above, and denied at 69% and below. Cumulative funding for FY 2009 is currently $2.71 billion.
More importantly, for most applicants, Wave 1 for FY 2010 will be released on Wednesday, May 26th. Although released somewhat later than normal, due to late FCC approval, the first wave will be a large one, providing total funding of $426 million for over 18,300 applications. As is typical for this stage in the cycle, funding is provided only for Priority 1 services.
FCC NPRM on E-Rate Program Revisions
Last week, the FCC released its first major Notice of Proposed Rulemaking ("NPRM") seeking comments on a broad spectrum of proposed changes to the E-rate program (see FCC 10-83).
The following is the FCC's summary of the proposed changes, together with a few preliminary comments and explanations. We plan on discussing major aspects of this NPRM in more detail in subsequent newsletters.
- Streamline the application and competitive bidding processes for telecommunications and Internet access in an effort to further reduce the administrative burden on applicants, while at the same time maintaining appropriate safeguards to mitigate potential waste, fraud, and abuse.
Comment: Proposals include the elimination of technology plans and the Form 470 for Priority 1 services, but only for applicants already subject to other federal, state, or local planning and competitive bidding requirements. This may help many public school applicants, but may do nothing for others. The streamlining effort will require new and/or revised forms and online filing tools.
- Codify the requirement developed in Commission precedent that competitive bidding processes be "fair and open" to enhance the Commission's ability to enforce its rules in cases involving waste, fraud and abuse.
Comment: The FCC proposes to codify competitive bidding rules, including a rather extensive illustrative list of prohibited activities.
- Simplify the way school districts calculate their discounts and conform the E-rate definition of "rural" to the Department of Education's definition.
Comment: The discount proposal suggests calculating school district discount rates based on total student counts, rather than on a school-by-school basis. This change may help some districts whose current aggregate discounts are close to higher matrix levels, but hurt others.
- Support 24/7 online learning by eliminating the current rule that requires schools to allocate the cost of wireless Internet access service between funded, in-school use and non-funded uses away from school premises.
Comment: This would be a major change, supporting Internet services for students (and probably their families) at home, but having a yet-to-be-determined impact on funding requirements. Major support for this proposal is expected from the wireless carriers.
- Provide greater flexibility to recipients to choose the most cost-effective bandwidth solutions for their connectivity needs by allowing the leasing of low-cost fiber, even if unlit, from municipalities and other entities that are not telecommunications carriers.
Comment: These proposals would provide E-rate support for the leasing (not the purchase) of dark fiber facilities and for the provision of broadband services from non-telecom providers (e.g., state or municipal networks).
- Expand the reach of broadband in residential schools that serve populations facing unique challenges, such as Tribal schools or schools for children with physical, cognitive, or behavioral disabilities.
Comment: For certain special schools, this proposal would extend E-rate coverage to locations such as dormitories.
- Create a new, predictable funding mechanism for internal connections so that more schools and libraries have the ability to use the most technologically advanced applications, including video streaming to the classroom, to provide superior learning opportunities.
Comment: Proposals include changes to the discount matrix (including lowering discounts on Priority 2 services), elimination of the 2-in-5 rule, per student funding caps, a set-aside for internal connections, and reconsideration of the eligibility of voice services and basic maintenance.
- Index the current $2.25 billion cap on E-rate disbursements to inflation to maintain the purchasing power of the current program and enable continued support for high speed broadband and internal connections in the future.
Comment: Going forward, the FCC proposes to index the nominal annual funding cap to inflation but, unlike recent Congressional suggestions, does not include a retroactive inflationary adjustment from 1998. With continued low inflation, this would have little impact.
- Create a process for schools and libraries to dispose of obsolete equipment without running afoul of the prohibition on reselling equipment and services purchased using E-rate funds.
Comment: These proposals would address current ambiguities concerning an applicant's ability to dispose of obsolete equipment, currently addressed only indirectly by equipment transfer rules. It would also cover the issue of salvage value.
It is important to note that these changes to the E-rate program are proposals, not actual rule changes. Comments on this NPRM will be due 30 days after its publication in the Federal Register, which is expected shortly. Reply comments will be due 15 days thereafter. This is an accelerated schedule for proposed changes of this magnitude, apparently with a goal of making many of the changes effective for the FY 2011 application cycle.
E-Rate Updates and Reminders
New FCC Appeal Decision Orders:
The FCC issued four appeal decisions last week granting requests for review - dating back as far as 2002 - for a total of 28 applicants involving the following issues:
- Missed Form 486 deadlines (generally attributed to staff changes) - see DA 10-885.
- Clerical errors in filing a service delivery deadline extension request - see DA 10-886.
- Missed (by less than one month) service delivery deadline - see DA 10-887.
- Reclassified service category (Telecommunications to Internet access) without corresponding Form 470 posting - see DA 10-888.
None of these decisions are of a groundbreaking nature. All reflect a continued degree of FCC tolerance for minor rule violations caused by clerical or ministerial errors.
The SLD's May 21st News Brief reviews the schedule for its fall applicant training, first announced last week and open for registration now. The SLD's training will again be a full-day session, this year available at eight locations around the country (see schedule below). Various states also typically run E-rate workshops later in the fall.
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Washington, DC |
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September 30, 2010 |
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Newark, NJ |
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October 7, 2010 |
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Minneapolis, MN |
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October 12, 2010 |
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Los Angeles, CA |
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October 14, 2010 |
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Kansas City, MO |
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October 19, 2010 |
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Jacksonville, FL |
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October 21, 2010 |
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Portland, OR |
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October 28, 2010 |
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Dallas/Fort Worth, TX |
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November 2, 2010 |
