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FCC Shows Unprecedented Flexibility; Grant 196 Appeals

The FCC continued a string of friendly appeal decisions and in an unprecedented move consolidated 196 appeals and granted a waiver of the rules. These denials in funding were "due to certain clerical or ministerial errors in the application, i.e., a failure to timely file an FCC Form 471, a failure to timely file a certification related to an FCC Form 470, or a failure to comply with minimum processing standards." The FCC acknowledged that the primary jobs of most E-rate coordinators are teachers, school administrators and technology staff as opposed to professional federal grant writers.

In support of this Order, FCC Commissioner Copps stated "clearly, these cases are not about waste, fraud or abuse. These are about limited, and I believe, relatively minor ministerial errors. When a school inadvertently provides the right information on a slightly dated but virtually identical form, when technical problems prevent an applicant from interfacing with USAC's electronic filing system and when a third-party carrier prevents an application from arriving in a timely manner, flat-out funding denial is a harsh consequence. It can be especially harsh when, as was the case in one application here, a minor clerical error led to a denial of E-Rate funding for an entire state. In fact, it becomes hard to square denial for slight clerical errors like these with our duties under the statute to further the deployment of advanced services."

The FCC is now directing USAC to complete its review of these applications within 60 days of this Order. While the FCC estimates that appeals granted in this Order involve applications for approximately $68 million in funding for Funding Years 1999-2005, the FCC stated that this Order will have a minimum effect in the overall Universal Service Fund because the monies for these appeals have already been collected and held in reserve.

The FCC found that "there is no evidence of waste, fraud or abuse, misuse of funds, or a failure to adhere to core program requirements." The FCC further argued that "denial of funding requests inflicts undue hardship on the applicants and in these cases, we find that the applicants have demonstrated that rigid compliance with the application procedures does not further the purposes of section 254(h) or serve the public interest."

Not only did these applicants win their appeals, but the FCC gave USAC additional processing directives. These include:

  • We direct USAC to modify its application review procedures as of the effective date of this Order to better inform applicants of approaching FCC Form 486 filing deadlines and also provide a 15-day opportunity to file the form if the applicant has missed the deadline.
  • As the effective date of this Order, we require USAC to provide all E-rate applicants with an opportunity to cure ministerial and clerical errors on their FCC Form 470 or FCC Form 471, and an additional opportunity to file the required certifications.
  • USAC shall inform applicants promptly in writing of any and all ministerial or clerical errors that are detected in their applications, along with a clear and specific explanation of how the applicant can remedy those errors.
  • USAC shall also inform applications promptly in writing of any missing or incomplete certifications. Applicants shall have 15 calendar days from the date of receipt of notice in writing by USAC to amend or refile their FCC Form 470, FCC Form 471 or associated certifications.
  • USAC shall apply this directive to all pending applications and appeals even if such applications or appeals are no longer within the filing window. The 15-day period is limited enough to ensure that funding decisions are not unreasonably delayed for E-rate applicants and should be sufficient time to correct truly unintentional ministerial and clerical errors.
  • USAC shall also develop a more targeted outreach program and educational efforts to inform and enlighten applicants on the various application requirements, including the application and certification deadlines, in an attempt to reduce these types of errors.
  • USAC shall develop a targeted outreach program designed to identify schools and libraries that have timely posted an FCC Form 470 on USAC's website but have failed to file the associated FCC Form 470 certification.
  • USAC should also notify applicants that have filed an FCC Form 470, but have failed to file an FCC Form 471 or its certification by the close of the filing window.

The FCC will continue to take steps to reform and improve the E-rate program as part of the Comprehensive Universal Service Review NPRM. 

As a word of caution, however, it is advisable for E-rate applicants strive to continue to meet all FCC rules, regulations and deadlines. The FCC states "the waivers here should not be read to mean that applicants will not be required in the future to comply fully with our procedural rules, which are vital to the efficient operation of the E-rate program."

The Full Order can be viewed at Bishop Perry Middle School FCC Appeal.doc

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