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FCC Shows Flexibility: Schools Win FCC Appeals

The Federal Communications Commission recently released several appeal decisions in which E-rate applicants were either granted their appeal or given a special waiver. These appeals show that based on the public interest the FCC is willing to grant some flexibility within their own rules and regulations. Below are short descriptions of the appeals.

Greenfield Public School District – The person who handled the E-rate applications was called to military service and was therefore unable to answer PIA questions in a timely manner. Greenfield was denied funding and then missed the 60 day window to appeal the decision. The FCC stated in their appeal decision that “…given the importance of military service during a time of war, we find that it would be inconsistent with the public interest to penalize Greenfield for its employee’s sudden departure to fulfill his military obligations…It would have been difficult for a replacement to determine the status of the applications, gain an understanding of the applicable rules, and take over responsibility for the applications given that the District Technology Coordinator had already left Greenfield to commence his military service. As the Commission recently stated, the E-rate program is fraught with complexity from the perspective of beneficiaries and the program rules and guidelines have changed many times…”

Pasadena Unified School District – The District has been applying for telecommunications and Internet services relying on a state master contract since Funding Year 2000 and “…under this arrangement Pasadena has received hundreds of thousands of dollars from USAC….” Pasadena complied with the competitive bidding requirements and had month-to-month arrangements with their service provider based on the state master contract. However, in Funding Year 2004 Pasadena posted a new Form 470 and then mistakenly cited a contract identifier and a contract award date of January 18, 2000 instead of identifying they still had the month-to-month relationship on the Form 471. USAC denied Pasadena based on the fact that they had a contract in place for funding that was signed before the allowable contract date.

The FCC granted Pasadena’s appeal and stated, “as an initial matter we note that reasonable inquiry by USAC and better communication between USAC and the applicant could have resolved the issues that we now face in these Requests for Review. While we have previously noted that the burden of timely and accurately filing rests with the applicant, we are compelled to remind USAC that it retains an obligation to conduct a reasonable inquiry into the filings and materials that USAC itself has in its possession.”

Wyoming Department of Education – The State of Wyoming was granted a waiver of the competitive bidding rules. They signed a state master contract for a statewide telecommunications network in April 1998 with Qwest Communications. In the 2000 and 2001 Funding Years the SLD denied their applications because the SLD believed that they violated the competitive bidding requirements by signing the contract before the 28 day waiting period based on their Form 470. The State of Wyoming argued, however, that they were following their state and local procurement regulations and that the state “cannot legally seek new bids for services provided under the existing contracts because it would be in breach of contract and the covenant of good faith inherent in all contracts.”

The FCC ruled that it would be in the public interest to grant their waiver and that “without this waiver, schools using the State of Wyoming state master contracts may lose funding for essential services or have their services disrupted. Such a result is inconsistent with the public interest.”

Wyoming Department of Education – In 2003 the State was denied funding because the SLD determined that price was not the primary factor when they chose their vendor. The State explained to USAC that they chose the most cost-effective solution and that they used five criteria to evaluate their bids: functionality, pricing, vendor support, vendor qualifications, and project plan. In its Request for Review, Wyoming stated that it was necessary to assign the highest weight to “functionality” because Wyoming had to select a service provider that was capable of providing telecommunications services to all schools over a large and diverse geographic area. The FCC decided that while price should be the primary factor in selected a service provider, "applicants should be given the maximum flexibility to take other criteria into account that meets their needs most effectively and efficiently."

The Greenfield appeal can be viewed at Greenfield Public School District.doc

The Pasadena appeal can be viewed at Pasadena Unified School District.doc

The Wyoming 2000 and 2001 appeal can be viewed at State of WY 2000 and 2001.doc

The Wyoming 2003 appeal can be viewed at Wyoming Department of Education 2003.doc

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