The Federal Communications Commission has upheld the decision of the Schools and Libraries Division to reject the Year 2 E-rate application of the Central Minnesota Computing Center, a consortium of 67 school districts and 44 libraries, for its failure to provide an adequate response to demonstrate that all the institutions it represented had adequate resources to use their E-rate discounts effectively. The decision further underscores the responsibilities that consortium managers may face when they submit an E-rate application on behalf of others.

In reviewing the consortium's Year 2 application, the SLD's "Selective Review Team" submitted the consortium to what was then called an "Item 22 Review." As part of this review, applicants have to provide detailed information about what they have budgeted for such items as hardware, professional development, software, retrofitting and maintenance. The SLD sent the consortium letters seeking the information in September and November 1999, and then rejected the application in late March 2000 after it said the consortium had failed to provide an adequate response.

The consortium had contended in its responses that individual applicants were responsible for providing for those items, that the information was "not readily available" to the consortium and to gather it would "take considerable time and effort." It also noted that it had not been required to gather such information for its Year 3 application and so it did not feel it should not have to do so for Year 2.

However, the FCC said that just because a school district or library was part of a consortium did not relieve it of the obligation to produce the budgetary details of an Item 22 review. It noted that the certification requires that statements be made on behalf of "the school(s) or library(ies) I represent"and that Item 22 reviews apply to "all of the eligible entities covered by your request." Further, it said that the reason the consortium did not have to undergo the review in Year 3 was simply because its application was not selected for that kind of review. In summary, it said, "Where schools and libraries choose to apply as a consortium to obtain the resulting advantages, the consortium must be prepared to accept the associated burdens as well." The decision is available at http://www.fcc.gov/Bureaus/Common_Carrier/Orders/2001/da010776.doc.