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FCC Provides Some Details on 5th Order

The Federal Communications Commission August 5 distributed a press release with more details about the 5th Report and Order that it issued the day before to address concerns about waste, fraud and abuse in the E-rate program.

The text of the full order was still not available. However, an FCC press release describing the order said that it:

– sets forth a framework regarding what amounts should be recovered by the Universal Service Administrative Company (USAC) and the FCC when funds have been disbursed in violation of the law or specific FCC rules;

– makes clear that USAC and the FCC will conduct audits and other investigations relating to use of E-rate funds within five years of receipt of supported services;

– requires both beneficiaries and service providers to maintain all documents necessary to demonstrate compliance with program requirements for a period of five years;

– eliminates the current option to offset amounts disbursed in violation of the statute or a rule to be offset against other funding commitments;

– bars beneficiaries or service providers from receiving additional funding if they have not satisfied any outstanding obligations to repay the fund. The FCC said this involves extending what it calls “the red light rule” that it adopted as part of its implementation of the Debt Collection Improvement Act (DCIA), which was put in place to help agencies do a better job of collect monies owed the government;

– requires applicants to develop a technology plan consistent with the U.S. Department of Education and USAC guidelines for what the plan must contain. Previously, rules had specified that applicants had to have an “approved” technology plan, but provided no basis for challenging approved plans that did not meet these criteria; and

– directs USAC to submit a plan for timely audit resolution.

The order also “amends and strengthens” the FCC’s certification requirements, and directs USAC to submit a list of administrative procedures each year so that the FCC can codify them into its rules to strengthen its enforcement efforts.

More details on the order will be provided when it is formally released by the FCC.

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