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Funds For Learning Commends FCC Decision to Roll Over Funds Earlier Than Planned

Funds For Learning commends the Federal Communications Commission for accepting its recommendation that undisbursed E-rate funds be rolled over for the 2003 funding year instead of waiting to 2004, as the FCC originally proposed.

In its Second Report and Order and Notice of Proposed Rule-Making dated April 29, 2003, the FCC proposed waiting until July 2004, and the start of the 2004 funding year, to carry over undisbursed program funds-a process to which it had committed itself in mid-2002. In the comments that it filed with the FCC, Funds For Learning argued that there was no good reason to wait that long and that the FCC should instruct the Schools and Libraries Division to use the rollover to approve more funding commitments for 2003.

The Commission proposed delaying the rollover until 2004 so that "applicants would have the benefit of three quarterly estimates of unused funds before the filing window closes, and would be able to structure their applications appropriately." FFL noted that because applicants were supposed to structure their applications based on their technology plans and their own needs, not the size of the funding pool, the FCC was in danger of sending the wrong message to applicants.

FFL noted that the Universal Service Administrative Company was already providing quarterly reports to the FCC on the amount of funding that could be available for roll over. FFL also said that because it was likely that USAC would not be able to determine the final threshold for approved Priority Two services for many months, an accelerated rollover would simply help the SLD approve more funding commitments more quickly. "At a time when state and local budget cuts are making it difficult for many schools and libraries to keep their technology plans on track," Funds For Learning argued, "these dollars could be put to the use for which they were always intended, rather than simply earning more interest in the USAC bank accounts."

While other school advocates endorsed the roll-over in their comments, they did not make the case for why it could be done earlier. In mid-December, the SLD was poised to begin rejecting internal connections requests from applicants below the 70 percent threshold when the FCC objected, advising the SLD that it was about to make more money available. In its 3rd Report and Order released December 23, 2003, the FCC said it would accelerate the schedule to increase the funds that would be made available for 2003 funding commitments.

It is anticipated that the FCC will continue to authorize the roll-over of undisbursed funding as the gap between commitments and disbursements inevitably persists to some degree. Going forward, the FCC plans to report the size of the roll-over for the next funding year in the quarter before the funding year starts.

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