In This Week's Issue
»	Funding Status
»	CIPA Filtering: Federal vs. Local Control
»	E-Rate Updates and Reminders
»	Schools and Libraries News Brief dated March 12 - No Cert Letters

E-Rate Central News for the Week
March 15, 2010

The E-Rate Central News for the Week, prepared for New York applicants by E-Rate Central, is sponsored by the New York State Education Department. Additional E-rate resources are on the E-Rate Central Web site and on the New York State E-rate site. We can be contacted by phone (516-801-7804), fax (516-801-7810), or through our Contact Us Web form.

Funding Status

Wave 44 for FY 2009 will be released on March 16th for $31 million, including $1.1 million for eight New York applicants. Priority 2 funding is still being approved at 80% and above, and denied at 54% and below. Based on a recommendation to the FCC by USAC, we expect that the Priority 2 threshold will drop two percentage points by the end of the month. Cumulative funding for FY 2009 is currently $2.58 billion, including $309 million for New York.

Last week, earlier than we had expected given the late window close, the SLD sent the FCC its preliminary analysis of FY 2010 demand. The table below provides an abbreviated comparison of FY 2010 with similar demand numbers from the preceding two years. A more complete table for FY 2010, as well as a copy of the SLD's explanatory letter to the FCC, is available on the SLD Web site (FY 2010 Demand).

It is important to note that the preliminary demand numbers represent a simple compilation of all Form 471 requests submitted within the application window. Historically, the final demand level is lower as duplicate applications are cancelled and funding requests are denied or reduced. We estimate that final demand in recent years has been 15-20% less than preliminary demand.

Preliminary Demand Estimates: FY 2008– FY 2010
								Percentage
		Priority 1		Priority 2		Total		IC Cutoff
FY 2010
20-79%		$1,051,843,961		$72,539,416		$1,124,383,377
80-89%		655,005,511		801,791,448		1,456,796,959
90%		331,346,965		1,003,417,092		1,334,764,057
Total		$2,038,196,437		$1,877,747,956		$3,915,944,393		N/A
FY 2009
20-79%		$1,105,725,410		$118,447,424		$1,224,172,834
80-89%		679,072,877		1,016,023,626		1,695,096,503
90%		258,632,763		808,131,230		1,066,763,992
Total		$2,043,431,050		$1,942,602,280		$3,986,033,329		70-78% Est.
FY 2008
20-79%		$1,190,077,938		$159,342,870		$1,349,420,825
80-89%		542,114,554		1,126,565,636		1,668,680,190
90%		222,776,414		1,066,694,951		1,289,471,365
Total		$1,954,968,906		$2,352,603,475		$4,307,572,380		87%

The SLD's preliminary demand numbers are somewhat below our earlier estimates discussed in last week's newsletter. Based on the SLD's own DRT database, however, which still does not include over $100 million in known funding requests not yet data entered, the SLD's preliminary numbers may be a bit understated.

As previously indicated, the critical demand numbers affecting the Priority 2 funding threshold for FY 2010 are total requests for Priority 1 funding and requests for Priority 2 funding at the 90% level. Using the SLD's preliminary data, these FY 2010 funding requests would be up 7% from FY 2009 and up 1% from FY 2008. Our comparable estimates are up 11% and 5%, respectively.

In either case, unless roll-over funding for FY 2010 is more than $650 million (currently our best estimate), next year's Priority 2 funding threshold is unlikely to reach 80%.

CIPA Filtering: Federal vs. Local Control

Last Friday was the deadline for submitting reply comments on the FCC's proposed revisions of the CIPA rules (FCC 09-96). The only significant CIPA reply comments were those filed by the State E-Rate Coordinators' Alliance encouraging the FCC to more clearly emphasize that the determination as to what types of Internet content are or are not deemed harmful for minors should be a local community decision, not a federal decision.

The statutory language of the Children's Internet Protection Act already requires local determination of what matter is inappropriate for minors - a principle that the FCC simply proposes to codify in its actual rules. SECA's plea to the FCC to further stress this principle was based on a USAC decision, buried deep within a much broader audit report, seeking to recover funds as a result of an audit finding that a school district's Internet filter failed to block access to two social networking sites (Facebook.com and MySpace.com) "that may contain harmful materials."

SECA found this decision deeply disturbing. In addition to the obvious First Amendment issue, SECA expressed concern that the precedent could eventually bog "down both USAC and the FCC in endless determinations of the appropriateness of student access to specific Web sites and/or content."

Two other points regarding this particular USAC decision should be noted:

1. On the plus side, USAC's recovery of funds decision did not reference the auditor's other CIPA finding that the district's Internet Safety Policy did not include one required element. This portion of the decision may be based on guidance provided by the FCC in a January 2009 letter to USAC - often referred to as the "Table C" letter - concerning the recovery of funds for infractions of various E-rate rules, including CIPA (see DA 09-86). The FCC indicated that USAC should "generally" recover funds if an applicant did not comply with all CIPA requirements, but that "...certain situations may not warrant recovery." Specifically, the FCC noted that recovery might not be required in instances where "...although the applicant may not have been in technical compliance, there was substantial compliance with the spirit of the CIPA requirements."
2. On the negative side, the amount of recovered funds sought for the purported CIPA filtering violation included all the FRNs covered by the audit - in dollar terms, almost 90% of which were for Telecommunications services to which CIPA regulations do not apply. Hopefully, this was a simple error, not a new precedent.

E-Rate Updates and Reminders

Community Use of School Internet Facilities:

Comments on the FCC's proposal to permanently permit community use of school Internet facilities (FCC 10-33) are due April 5th; reply comments are due April 19th.

National Broadband Plan:

The FCC is to present its National Broadband Plan to Congress this week. A staff briefing on the plan is scheduled to be presented at the FCC's open meeting to be held at 10:30 a.m. EST on Tuesday, March 16th. Audio/video coverage of the meeting will be broadcast live with open captioning over the Internet from the FCC Live web page.

Schools and Libraries News Briefs dated March 12 - No Cert Letters

The SLD's March 12th News Brief focused on last week's mailing of approximately 660 letters to applicants who had submitted FY2010 Form 471s online before the close of the window, but who had neglected to certify their forms. The "No Cert" letters, formally entitled "Notification of Form 471 With No Certification," give applicants another 20 days to certify their Form 471s and have them considered to have been filed within the window. Applicants receiving 'No Cert" letters have until March 30th to complete and submit their certifications.