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FCC Signals More Forgiving Attitude On Some Application Rejections

In a Feb. 22 decision that appeared to signal a more forgiving attitude to some kinds of rejected E-rate applications, the Federal Communications Commission instructed the Schools and Libraries Division to reconsider a Year 3 application that had been rejected for failure to meet the division's Minimum Processing Standards.

The decision, rendered by the full commission rather than simply the staff of the Common Carrier Bureau, involved the Naperville Community Unit School District 203 in Naperville, IL. The district's Year 3 application had been rejected because it had failed to provide an answer for Item 22 on the Form 471 application, where an applicant must specify which discount worksheet applies to a funding request. The school district provided the same discount worksheet for each of its six funding requests but did not provide the number of the worksheet on the application blank. The SLD rejected the application, citing its Minimum Processing Standards, but there was no time left for the district to resubmit its application before the close of the Year 3 filing window.

In its decision, the FCC noted that the Minimum Processing Standards were designed to reduce the cost of administering the E-rate program so to maximize the amount of money that could be made available to applicants. However, it said that in light of the "totality of the circumstances presented," the rejection was not justified. The FCC said that "specific factors" that weigh in the applicant's favor include the fact that the applicant might have been confused because of the redesign of the Form 471 that year, the fact that the omitted information was easily discernible from the rest of the application and the substantial completeness of the application.

The FCC added, "We are comforted by the fact that review of the record leads us to conclude that Naperville completed every other item on its application for which a response was appropriate. There is no indication that Naperville intended to deceive or mislead SLD by the omission. Nor do we believe that Naperville lacked a sufficient response to Item 22 because it failed to exercise proper diligence in ordering services for which it could make effective use. Rather, Naperville provided sufficiently complete answers to the remainder of its FCC Form 471 to permit the ready discernment of the response that Naperville should have provided to Item 22. Except for the inadvertent omission of a response to Item 22, Naperville's FCC Form 471 reflects the diligence and good faith we expect from applicants."In addition, the FCC said, "The administrative cost of accepting Naperville's application under these facts are minimal and are outweighed by the objective of ensuring that schools and libraries benefit from the schools and libraries universal service support mechanism as contemplated by the statute. . . . Specifically, we conclude that it is inappropriate for SLD to return an application without consideration under its Minimum Processing Standard where (1) the request for information was a first-time information requirement on a revised form, thereby possibly leading to confusion on the part of the applicants; (2) the omitted information could be easily discerned by SLD through examination of other information included in the application; and (3) the application is otherwise substantially complete."

The FCC noted that the SLD could still find reasons to reject Naperville's funding requests. For instance, because the district's shared discount rate is only 26 percent, it would not be able to qualify for internal connections support if it had requested it on its Year 3 application.

The FCC also noted that it has "a number" of requests for review pending that involve similar issues, and that "similar issues have been raised in matters that remain pending before the SLD." It called on the SLD and Common Carrier Bureau to "resolve these matters consistent with the underlying rationale" of its decision, namely the three points detailed above.

The full text of the decision can be accessed at


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