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May 2013 E-rate Update
May 17, 2013

Happy Friday, E-raters! Below is the latest in E-rate news...

FY 2013 Priority 1 FCDLs: Yesterday the FCC rolled over $450 million in unused funds from prior years and directed USAC that they could begin issuing FY 2013 funding commitment letters. As you may recall from my demand estimate message (http://e-ratepa.org/Listserve-Archive/2013/04-23-13.html) the demand for Priority 1 funding was $2.709 billion, with the inflation-adjusted cap only at $2.38 billion, so the rollover-funding was critical to ensuring that all Priority 1 requests could be funded. USAC is expected to begin issuing FY 2013 Funding Commitment Decision Letters (FCDLs) for Priority 1 funding within the next week or two and I'll be in touch as that happens. For those applicants lucky enough to be funded in Wave 1, the next step will be to file the Form 486 (instructions on the 486 will be coming soon).

Status of FY 2013 PIA Reviews: PIA reviews are usually full-swing by this point, but the reviews have been slower than usual this year as the PIA staff work to close out the FY 2011 and 2012 applications. If you haven't yet been contacted by a PIA reviewer, you likely will be in the coming weeks and months. If you're curious about the status of your application, go to http://www.sl.universalservice.org/menu.asp, click on 'Application Status' and enter your Billed Entity Number. The system will show you the status of each of your Form 471s. Any status which includes the words 'quality assurance' likely means your application will be included in Wave 1. As of last week, the SLD reported that it had 12,500 applications “ready to be funded.”

Status of Priority 2 Funding for FY 2013: As I mentioned above, because Priority 1 demand grew again by double-digit figures, there is very little or no funding left to fund Priority 2 requests, even at the 90% level. Unless the FCC can find approximately $1.5 - $1.7 billion, I doubt Priority 2 requests will be funded for FY 2013. If some money is found (through savings in other programs or by waiting a few months for another quarter's rollover funds to be available), the FCC could instruct USAC to issue 90% P2 funding on a pro-rated basis. I will keep you posted as this issue progresses, but in the meantime, my advice for 90% P2 applicants is to not purchase the equipment/services unless you can afford to pay 100% of the cost without E-rate subsidy.

E-rate NPRM Release Delayed: It was widely expected that in April the FCC would release an E-rate NPRM -- Notice of Proposed Rule Making -- on "E-rate 2.0," in an effort to modernize the E-rate program and focus on broadband services and program streamlining. But on March 22, FCC Chairman Genachowski announced he was leaving the Commission and thus, the NPRM issuance has been put on hold until a new chairman can be confirmed. Typically such NPRMs offer proposed reforms and ask stakeholders to submit comments or alternative proposals. As soon as the details of the NPRM are known, I'll send a summary to the listserve and encourage everyone to weigh-in.

PQA E-rate Audits: Several PA schools and libraries have been the recipients of a Payment Quality Assurance audit (PQA) which is designed to gather specific information from applicants in order to calculate the rate of improper payments, a requirement under the Improper Payments Information Act (IPIA). A total of 60 applicants are randomly selected each month for the PQA audit, although it appears that applicants with higher-dollar disbursements stand a greater likelihood of being chosen. The PQA request is sent to the entity's contact person from the e-mail address "pqa@usac.i-sight.com." Although they are not technically called 'audits,' that's what they are because if an improper payment is discovered, USAC will then recover those funds. If you are selected for a PQA audit, please let me know and I can help to answer any questions you may have. They look daunting, but most applicants find that the information is very easy to compile.

Reminder: New SPIN Change Rules: Beginning with the 2011 funding year, the E-rate rules for allowable SPIN changes became much, much more restrictive. Applicants are now required to have a legitimate reason to change vendors and retain their E-rate funding, such as breach of contract, a vendor unable to perform service, or vendor bankruptcy. Lower price is no longer an allowable reason to switch vendors. It is extremely important that you keep this new rule in mind from now on. If you switch vendors for any reason other than these three (breach of contract, bankruptcy or inability to perform service), you will lose your E-rate funding for the year. Should you have special circumstances that require you to change vendors that don't fit into one of these three reasons, please let me know and I can help draft your explanation to USAC. This is also a reminder to the vendors reading this message that your sales representatives should not be trying to convince applicants to switch providers after the 471 window has closed.

Service Provider Audits Coming: USAC conducted two vendor trainings last week and announced that they would begin conducting narrowly focused audits of service providers in the next few months. The audits will be done remotely and will audit randomly selected invoices. For now, competitive bidding and lowest corresponding price won't be included in the audit. This is the first time that USAC has actually audited service providers.

Julie's Office Move: I'd like to thank everyone for their patience with my phone system over the last month during my move to a new office. In my effort to retain the same phone and fax numbers, I discovered how incredibly difficult it can be to actually get two phone companies to work together. I know many of you called and received strange recordings and I'm sorry for any confusion this may have caused. If you called during this time and didn't receive a call back, please call again! I believe my phone is working again -- 717-730-7133. But as always, the best way to reach me is via e-mail: jtschell@comcast.net.

I hope you're enjoying this beautiful spring! Please let me know if there's anything I can do to help.

-- Julie

Julie Tritt Schell
PA E-rate Coordinator

717-730-7133 - o
717-730-9060 - f

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