FCC Seeks Comments on E-rate Program
Message Posted February 24, 2004
Periodically, the Federal Communications Commission (FCC) seeks comments
from interested stakeholders (including especially schools, libraries and
service providers directly involved with and impacted by the E-rate program)
regarding proposed changes to the program, called a Notice of Proposed
Rulemaking (NPRM). The newest, and largest NPRM is years, has been released
and the FCC is requesting comments by March 11. A copy of the FCC’s NPRM is
available at http://www.sl.universalservice.org/data/pdf/fcc%2003-323.pdf,
with the specifics of the NPRM on pages 55-97. Below is a very brief
summary of the issues for which they are seeking comment.
If you are interested in submitting comments, please review the official
NPRM linked above for a description of the entire issue you wish to address
(they usually list several paragraphs as background for each issue, then ask
for specific comments). You may submit comments on one or more of the
issues they raise; you also may submit comments on other issues not
specifically addressed. This is your chance to weigh in on how the E-rate
program should be improved to the key policymakers. Instructions on filing
your comments are listed below.
Issues in NPRM:
(1) Discount Matrix: The FCC is considering suggestions by a number of
parties that the discount matrix be changed to lower the maximum discount
from 90% to 70-80%, at least for Internal Connections services. The
underlying assumption is that an applicant share of only 10% has not proven
to be enough “skin in the game” to assure cost-effective use of E-rate
services, and has resulted in vendor abuses and excessive funding requests.
It would also free up E-rate monies, which would allow Internal Connections
funding for applicants with lower discount rates.
(2) Competitive Bidding Process: Comments are sought on the effectiveness
of the Form 470 process and on whether the process should be eliminated or
simplified for certain types of services such as local telephone service.
Specific comments are requested on dealing with situations in which no
competing bids are received and on a proposal to require vendor
certification that bids are independently developed.
(3) Definition of Rural Area: The FCC is exploring alternatives to the
current “rural” definition of non-metropolitan counties based on OMB or
Goldsmith data.
(4) Definition of Internet Access: The FCC is considering updating its
rules on eligible Internet services to reflect evolving features and
functionality including greater flexibility on content and private networks.
(5) Wide Area Networks (“WANs”): Specific comments are being sought on: (a)
a proposal to limit discounts on installation charges exceeding 25% of
funding requests; (b) a proposal to require installation charges of more
than $500,000 to be prorated over at least five years (vs. the current three
years); and (c), the eligibility of unlit or dark fiber systems.
(6) Recovery of Funds: When situations are found in which funding was
awarded (or even disbursed) in error, corrections are made through a
Commitment Adjustment (“COMAD”) process. Specific comments are being sought
on: (a) procedural differences between violations of statutory vs.
programmatic requirements; (b) circumstances under which funds recovery
might be made through applicants rather than through vendors; (c) patterns
of systematic noncompliance that might justify total funds recovery; and
(d), de minimis errors that might not require funds recovery.
(7) Cost-Effectiveness: The FCC is asking whether it would be beneficial
and feasible to develop benchmarks (e.g., dollars per student or annual
funding caps) for determining “…that applicants are not requesting discounts
for services beyond their reasonable needs.”
(8) Recordkeeping: Current E-rate rules admonish applicants to maintain
records for five years to support future audits. Comments are now being
sought on: (a) more explicit rules on applicant record retention; and (b) on
the extension of recordkeeping requirements and audit procedures to service
providers.
(9) Consulting and Planning: Growing concern with vendor involvement in the
competitive procurement process has led to requests for comments on
applicant identification, and possible USAC registration, of consultants and
other experts. More broadly — and possibly more troublesome — is a proposal
that would prohibit “…a service provider from providing any form of
technology planning or procurement management assistance to applicants.”
(10) Technology Plans: The FCC is seeking comments on: (a) codification of
technology plan guidelines; (b) qualifications of plan approvers; and (c), a
possible requirement to conduct lease/purchase analyses. (Note: The latter
proposal is a bit ironic given the FCC’s new “two in five” rule for Internal
Connections funding that would appear to rule out multi-year leases.)
(11) Other Issues: Comments are also being sought on: (a) the codification
of rules on discount payment methods and invoice extension requests; (b) the
prevention of unauthorized funding requests by applicant subunits; (c) the
use of surveys to determine school lunch program eligibility; (d) the
measurement of the FCC’s mandate to assure “affordable” access to advance
telecommunications and information services; and (e), possible priorities
for applicants that have not yet achieved Internet connectivity.
Comments on these issues are due March 11, 2004 (and reply comments are due
April 12th). Instructions for submitting comments can be found in the
Notice itself (referenced above) beginning at Para. 135. The easiest way
to submit comments is through the FCC’s Electronic Comment Filing System
(“ECFS”) which can be accessed at http://www.fcc.gov/cgb/ecfs/. Click on
'submit a filing' on the right toolbar, then simply attach a copy of your
comments (normally in Word).
Julie Tritt Schell
jtschell@comcast.net
(717) 730.7133 (voice)
(717) 730.9060 (fax)
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