On August 1, the Federal Communications Commission issued a Notice of Proposed Rulemaking (NPRM) seeking comments from E-rate stakeholders about the eligibility of many items within the program.  In the NPRM the FCC outlines many services which it is considering for eligibility of E-rate discounts.

People wishing to comment on items contained in the NPRM must do so within 30 days of the NPRM’s publication in the Federal Register. As of this writing, the NPRM has not been published. Replies to other’s comments are due within 45 days of publication. Guidelines and instructions for how to submit comments or reply comments can be found in the NPRM.

UPDATE: The NPRM was posted to the Federal Register on August 19, 2008. Comments are due Septeber 18, 2008 and reply comments are due October 3, 2008.

Interconnected Voice Over IP

The Federal Communications Commission continues its attempt to classify interconnected VoIP (iVoIP) services as either a telecommunications service or information service. For the last two years, iVoIP has been included in the E-rate’s Eligible Services List in the “Miscellaneous” category. In this NPRM, the FCC is asking for comments about if iVoIP should continue to be eligible for E-rate support, and if so, how to classify this service.

Internet Content Filtering

As part of the Children’s Internet Protection Act, measures to protect children from inappropriate content while online is required for any entity receiving E-rate discounts for Internet Access services or Internal Connections. A component needed to meet this requirement is to install Internet filtering software that monitors and blocks inappropriate content. Since these requirements went into effect, the FCC has consistently maintained that, while required for E-rate discounts, the purchase of content filtering is not eligible for discounts.

The FCC is asking whether the language of CIPA itself prevents them from providing E-rate discounts on Internet filtering software. From the NPRM:

Section 1721(g) of CIPA states that funds from the Elementary and Secondary Act of 1965 or the Library Services and Technology Act may be used to purchase filtering technology necessary to meet the requirements of CIPA, but “[n]o other sources of funds for the purchase or acquisition of such measures are authorized by this title, or the amendments made by this title.”  The Commission interpreted this passage to mean that no sources of funds other than that those explicitly listed in CIPA, which did not include E-rate program funds, could be used for the purchase of filtering software to comply with CIPA. 

We seek comment on the Commission’s prior interpretation of section 1721(g) of CIPA and whether it should be reconsidered.

The FCC is also asking if it has properly interpreted this section of CIPA, and if it hasn’t, whether E-rate discounts should be used to support the purchase of Internet filtering software. They also ask for people to comment on if including this item in the ESL will streamline the application review process, and into what service category it should be classified. 

Definition of Basic Telephone Service

The FCC is considering expanding the definition of basic telephone service as it applies to the E-rate program. Under program guidelines, an applicant is not required to have a technology plan when purchasing only basic telephone services. Currently, basic telephone services are defined as  “basic local, cellular, PCS, and/or long distance telephone service and/or voicemail”. Last year, the FCC expanded the definition of basic phone service to include Centrex services.

In this NPRM, the FCC is asking for comments about if it should further expand the definition of basic phone service to include additional services such as:

“…a Private Branch eXchange (PBX), key systems, T1 lines, and interconnected VoIP and Primary Rate Interface (PRI) trunk lines connecting a PBX to the Public Switched Telephone Network (PSTN)…”

If these items are to be included as eligible for the E-rate program, commenters should also address how these services affect the Commission’s presumption that any equipment at the applicant’s location is considered Priority 2 internal connections.

Dark Fiber

The Commission is asking whether dark fiber should be eligible for E-rate discounts once again. Prior to Funding Year 2004, it was eligible, but as part of the Third Report and Order, the FCC decided that dark fiber was not eligible for discounts. The FCC is asking the question once again, and is seeking the public’s input about if it should be eligible, and how it should be categorized within the program.

Other Services

The Commission is also seeking comment on whether several services should be eligible for discounts. These include:

• Text messaging – The FCC asks if the ability to send or receive short messages to using mobile phones should be eligible for E-rate discounts.
• Firewall – Basic firewalls are currently eligible. The FCC is seeking comment on if the definition of a firewall should be revised, and if advanced firewall services such as intrusion prevention , network access control, firewall traversal, and deep packet inspection should be considered eligible.
• Anti-virus/Anti-spam Software – The FCC is seeking comments on if these types of software should be eligible for E-rate discounts.  Currently, only network operating system and e-mail server software are eligible for discounts.
• Scheduling services – Scheduling services  and software allow “…schools and libraries [to] more efficiently to use video teleconferencing for distance learning by controlling the video linkage between the classrooms and the originating video feed…”. The FCC asks whether these should be eligible for discounts.
• Telephone broadcast messaging –  The FCC asks for comments about the potential eligibility of telephone broadcast messaging which “… allows pre-recorded messages to be sent over phone lines to individuals concerning school delays or closures, reported absences, upcoming activities and events, and emergencies.”

The FCC indicates that it may implement some changes resulting from this NPRM as soon as the 2009 Funding Year.  This means that the FCC will have to act with relative speed to review and consider comments and reply comments and incorporate them into the final order that would be released prior to the kick off of the FY 2009 Form 471 filing window.