Please ensure Javascript is enabled for purposes of website accessibility

FCC Implements ‚ÄòRed Light’ Display System

The Federal Communications Commission has implemented a new system to enable entities to determine whether they have outstanding debts with the FCC, including payments owed the FCC through the E-rate program.

Under the Debt Collection Improvement Act, anyone already delinquent in non-tax debts to the Commission who files an application or other request for benefits will be unable to obtain action on their request until their debts have been paid in full or other arrangements have been made. Failure to resolve an outstanding delinquent debt within 30 days of notification that a red light has been triggered will result in the application or request being dismissed.

In the case of E-rate program participants, this rule would most likely impact applicants or service providers that have been subject to a Commitment Adjustment (or COMAD) order and have so far failed to repay the Universal Service Fund for funding commitments that were disbursed incorrectly. Until recently, COMADs could only be filed against service providers, but now they are supposed to be sent to the party who bears the responsibility for the issue that was uncovered.

Under a new timetable, stakeholders are first sent an “issue notification letter,” advising them of the issue that has been identified. If a cash recovery is necessary, they are then sent a “First Demand Payment Letter” 60 days after the notification letter. If the debt is not satisfied within 30 days, or arrangements made for repayment, a second demand payment letter is sent out, the “red light rule” is invoked, and an 8 percent administrative fee can be assessed on the debt that is owed. The FCC has acknowledged that a school or library’s ability to pay outstanding debts may be dependent on action by state or local officials on budgetary requests, and that the timing of such action may be considered in determining satisfactory repayment options.

When a party is subject to the “red light rule,” the Schools and Libraries Division will stop payment on all funding requests and Form 471 applications can be dismissed without review by Program Integrity Assurance. If a COMAD order is appealed, recovery efforts will not be undertaken until the appeals are resolved.

The new procedures do not apply in cases where the Commitment Adjustment letter or the First Demand Payment Letter were issued before the FCC’s 4th Report and Order took effect on September 17, 2004.

The new FCC data base permits an entity with an FCC Registration Number to determine if it has any outstanding debts to the FCC. An entity can review its status by going to and entering its own FCC Registration Number and PIN number.

As of November 1, all E-rate program participants, including service providers, schools and libraries and consultants, were expected to obtain an FCC Registration Number. Numbers can be obtained by completing the online registration process.

question icon

We’re here to help!

Our mission is to provide high-quality consulting and support services for the needs of E-rate program participants. We consult with applicants to help them understand, effectively utilize, and maintain compliance with E-rate rules and regulations. We help prepare and submit paperwork, and interact with program administrators on our clients’ behalf.

Request a Consultation