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FCC Votes to Control Access to Internal Connections Discounts

The Federal Communications Commission voted December 17 to limit E-rate applicants' access to internal connections discounts to two times within a five-year period, except for network maintenance, and to limit applicants' ability to transfer E-rate-supported equipment.

The rule to limit transferability would block applicants from moving E-rate-supported equipment to another location for a period of three years, unless a facility was temporarily or permanently closed.

Additional details were not immediately available, nor was the timetable for implementation.

The FCC also said it would begin requiring the Schools and Libraries Division to provide its updated eligible services list to the commission by a particular date so that the commission could solicit public comments on the draft. The commission also put in place procedures for managing the roll-over of approximately $425 million in undisbursed discounts for use by applicants.

All of the commissioners voiced support for the program. However, the two Democratic commissioners, Jonathan Adelstein and Michael Copps, expressed concern about the recent change in eligibility of dark fiber and its potential impact on rural schools and libraries that had begun to build dark fiber networks when that service was eligible in the 2003 funding year. Copps said that the change in policy had left these applicants "high and dry," and that he saw "nothing" in the Telecommunications Act that "excludes dark fiber facilities from inclusion in the E-rate program."

The commission issued a new Notice of Proposed Rule-Making seeking comments on additional program changes, including potential changes in the discount matrix, competitive bidding procedures, revisions to the definition of rural applicants and Internet access, and leased WANs. The text and specifics of the new NPRM were also not immediately available.

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