7/17/2001 - The Federal Communications Commission in a July 10 decision clarified what consortium managers must do to demonstrate that their members have affirmatively agreed to participate in the consortium.

The Federal Communications Commission in a July 10 decision clarified what consortium managers must do to demonstrate that their members have affirmatively agreed to participate in the consortium.

The appeals decision involved Project Interconnect, a consortium of schools and libraries in the Minneapolis-St. Paul area organized to apply for state telecommunications grant money and E-rate discounts. In November 1999, a staff member from the Schools and Libraries Division asked the consortium to produce documentation that the listed members were, in fact, participating in the consortium. The staff member initially agreed to accept the letters of participation that the members signed on joining the consortium. The following month, however, another SLD staff member told the consortium that those letters would not be sufficient and gave it 10 days in which to submit letters of agency from each consortium member, specifically granting Project Interconnect the authority to seek funding from the SLD on its behalf. The consortium subsequently provided letters signed by a number of its members. Three months later, the SLD denied both of its applications, saying it did not have permission to act on behalf of all of the consortium members, and that at least one of them was "unaware of the application that you submitted."

Project Interconnect eventually appealed to the FCC, arguing that its applications should not be rejected in their entirety, because most consortium members had, in fact, signed letters of agency. In addition, it also asserted that the letters it originally submitted should have sufficed because Minnesota law requires school districts to join a consortium like Project Interconnect as a prerequisite for qualifying for state funding of telecommunications services.

The FCC did not buy the latter argument, saying that the SLD must ensure that consortium members know that applications have been filed on their behalf so they can be aware of their obligations and so that they don't go ahead and file their own application for the same services. However, it agreed that the SLD should not have rejected the requests of those schools and libraries for which letters of agency had been produced. It remanded the application to the agency to determine if those applicants should receive a funding commitment. The FCC said it did not want to unfairly penalize the entire consortium when only a few members failed to produce the requested documentation. To do so, it said, would tend to make applicants reluctant to join consortia.

The full decision is available at http://www.fcc.gov/Bureaus/Common_Carrier/Orders/2001/da011620.doc.