Consider Making E-rate SPIN Changes Now
Message Posted April 18, 2000
~ Just in case recent FCC decision changes ~
In a previous posting I informed you that the FCC changed its strict rules on when E-rate applicants may switch service providers. (Copan School District Appeal, www.fcc.gov/Bureaus/Common_Carrier/Orders/2000/fcc00100.txt). At that time, I reported that the SLD is in the process of developing an administrative framework for accepting these new SPIN changes, and encouraged you to wait until the SLD published its procedures before you submit your SPIN change request.
Because the SLD has not yet acted, I am becoming concerned over the possibility of a delay in implementing the new, more relaxed SPIN change procedures announced by the FCC. After some additional reflection, I now would like to encourage all Pennsylvania E-rate applicants that need to submit SPIN change requests to do so immediately. I can see no harm that will come of your submission of a SPIN change request now, and if my instincts prove to be accurate, there may be a movement to again TIGHTEN the SPIN change rules. Although I may be wrong, my thinking is that that there may be a small window of opportunity to have SPIN changes made under the current, very liberal FCC rules, and it may be detrimental to wait to apply for your SPIN changes.
There are many nuances to these changes, and I've tried to lay them all out below. Please read them carefully and if you decide to submit a SPIN change request, please include the language I have suggested below in your letter to the SLD. Also, I encourage you to only submit a SPIN change request if you already have switched service providers, or absolutely have to change providers now. From other SPIN change requests I've seen, it takes 6 months or more to get the request processed. Just because the rules have been loosened, it doesn't mean SLD has additional staff to implement the SPIN changes more rapidly.. I suspect that the changes will not be considered until they review all of the Year 2 applications received in the March window, which we know won't be until at least the fall.
Groundrules for Changing Providers
The FCC's decision clearly states that although they no longer restrict SPIN changes to those categories previously enumerated in the SLD guidelines (i.e. provider refuses to participate, has gone out of business, or has breached its contract), they do have a few rules that applicants must certify to. They are:
1) the SPIN change is allowed under state and local procurement rules, AND
2) the SPIN change is allowed under the terms of the contract between the applicant and its original service provider, AND
3) the applicant has notified its original service provider of its intent to change service providers, AND
4) the applicant is not requesting additional E-rate funding than was originally issued in their funding commitment letter, AND
Tariff Services vs. Contracts
The FCC's decision only discusses contracts, and not tariffed services. So, if you were purchasing services from a telecommunications carrier and did not have a signed contract, the rules are very unclear whether or not changing tariff service providers is permissible. If you already changed your telecom carrier in year 2 and lost your E-rate discounts because of it, I believe it would not hurt to submit a SPIN change request, requesting discounts back to the date that you switched providers. Please be prepared to show your compliance with the above-listed four standards. For Standard No. 2, state that there is no contract because the services are purchased under tariff.
Which Years Are Eligible, and Are These New Rules Retroactive to before March 16, 2000?
The FCC's decision does not state whether their new SPIN change procedures are retroactive, or whether they apply only to SPIN changes made after March 16,2000. If the FCC indicates in a future ruling that the rules are not retroactive, you will have lost nothing by submitting the SPIN change request.
Assuming that they are retroactive, the FCC and SLD have made it clear over the last few months that Year 1 is over, and therefore I would not try to submit any SPIN change requests that go back to year 1. If you changed service providers during Year 2, I strongly encourage you to submit a SPIN change request. If you submitted a Year 3 application and are awaiting receipt of your funding commitment letter (which are slated to begin to be mailed in the next week), the rules still apply, but you have two options.
1. You may submit a SPIN change request now (before you receive their funding commitment letter) using your Receipt Acknowledgement Letter (RAL), understanding that it likely will delay the mailing of the funding commitment letter significantly, or cross with the funding commitment letter in the mail. Or,
2. Await the receipt of the funding commitment letter, and take your chances that the rules will not be tightened up by the time you receive your funding commitment letter.
Does the New Provider Have to Participate in the Original 470 Competitive Bidding Process?
No. One of the major changes the FCC laid out in their decision said that they will NOT restrict SPIN changes to only providers that participated in the original bidding process, unless state or local law requires such participation. This is great news for applicants, particularly ones that have switched providers for better prices. Remember, though, you have to show that you were permitted to make the change under your original contract, and that the change was authorized under state/local procurement law.
Year 3 SPIN Change Requests Before Receipt of Funding Commitment Letter:
1. Photocopy the Receipt Acknowledgement Letter (RAL).
2. On the Funding Request Number that requires a SPIN Change, line out the incorrect SPIN and service provider name and write the correct SPIN and service provider name next to it. Make sure that your contact information at the beginning of the letter is correct. The SLD SPIN team will need to reach you in order to process your request.
3. Write a cover letter describing the SPIN change request under the current FCC rules, including the wording listed at the bottom of this message.
4. Send your cover letter and marked-up RAL as soon as possible to:
SPIN Change Request
Schools and Libraries Division
Box 300--Correspondence Unit
80 S. Jefferson Road
Whippany, NJ 07981
Year 2 or Year 3 SPIN Change Requests After Receipt of Funding Commitment Letter:
1. Write a letter to the SLD describing the SPIN change request under the current FCC rules, including the information and wording listed below.
What Information Should Be Included in the SPIN Change Letter (I would put this clearly at the beginning of the letter in list form)
- Name of Entity Submitting Request
- Date the Request is being Made
- 471 Application Number
- Billed Entity Number
- FRN number for which you are requesting the change (if available)
- The original Service Provider Name and SPIN
- The corrected Service Provider Name and SPIN
- Complete contact information, including name, title, school year and summer telephone numbers, so the SPIN team can reach you easily.
"The XX School District (or Library) respectfully requests a SPIN change under the current rules in effect based on the FCC's Appeal Decision for the Copan Public Schools, issued on March 16. 2000. This SPIN change request does not request additional funding, is allowed under our state and local procurement laws, is allowed under the terms of the contract with the original service provider, and is for the same service that was requested in our original Form 471 Application. Further, we have notified our original service provider of our intent to change service providers.
This request is permitted under current FCC rules based on the FCC's March 16, 2000 decision, Section III, Discussion, where they revised the SPIN Change Policy by stating, "In this Order, we modify the current categories of permissible SPIN changes and permit a SPIN change whenever an applicant certifies that (1) the SPIN change is allowed under its state and local procurement rules and under the terms of the contract between the applicant and its original service provider, and (2) the applicant has notified its original service provider of its intent to change service providers. We will no longer restrict SPIN changes to those categories currently enumerated in the SLD guidelines (i.e., service provider refuses to participate, has gone out of business, or has breached its contract), to avoid penalizing an applicant that either would be entitled to a SPIN change under the current guidelines but for a lack of particular documentation, or whose justification for a SPIN change, however reasonable, may not fit squarely within the existing three exceptions."
If you are requesting a SPIN change and the provider did not participate in the original competitive bidding process, be sure to include the following language as well:
"The new service provider did not participate in the original competitive bidding process, however we are permitted to select this provider because in the FCC's March 16, 2000 decision, they state, "Accordingly, where an applicant has complied with the Commission's competitive bidding requirement, has determined that a service provider substitution is permitted under the terms of the contract with its original service provider and relevant state or local laws, and has notified its original provider of its intent to change providers, we decline to confine an applicant's choice of a substitute service provider solely to those providers that participated in the applicant's initial competitive bidding process."
For clarification purposes, you should include a paragraph or two describing the reason for the SPIN change request, even though it could be for almost any reason, including better price. If you don't include this information, they surely will request it from you for their records. Be sure to encourage them to contact you if they need additional information to process your request, and that you would appreciate notification that they have received this request and a timeline for its processing.
Send this letter to:
SPIN Change Request
Schools and Libraries Division
Box 125-Correspondence Unit
80 S. Jefferson Road
Whippany, NJ 07981
If you have any questions, please don't hesitate to contact me. As I stated before, I have no proof that the FCC's new SPIN change rules may tighten, but it's a strong hunch. If I'm wrong, then you will have your SPIN change request submitted. But if I'm right, you may be the only applicants in the country who were able to take advantage of the liberal rules now in effect.
-- Julie
Julie L. Tritt
Executive Policy Specialist
Pennsylvania Department of Education
333 Market Street, 10th Floor
Harrisburg, PA 17126
(717) 705-4486
(717) 787-7222 - fax
jtritt@state.pa.us
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