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FCC Releases New Orders

The FCC recently issued four Orders concerning mainly procedural program rules. The Commission seems to emphasize in these Orders that a violation of a procedural rule need not result in a reduction or complete denial of funding where there is no evidence to suggest that an applicant was in violation of substantive program rules. The Commission further emphasizes that there are special circumstances which merit the waiver of such procedural rules.

Children of Peace School, et al Order
In this Order, the FCC grants twenty-five appeals regarding the reduction or denial of funding due to a failure to timely submit or not submit the Form 486. Citing the Alaska Gateway School District Order and the Alcona County Library Order, the Commission holds that a failure to meet a procedural deadline which did not violate substantive program rules need not result in a complete rejection of an application. Additionally, the FCC also waives the rule regarding the deadline to seek review of USAC decisions for five of the twenty five petitioners.

The petitioner in this Order claim that the late or missed filings were due to clerical or ministerial errors, or circumstances beyond their control. The Commission finds that although procedural deadlines are important to the effective management of the E-rate program, there are situations in which a departure from the deadline is warranted. The Commission also notes that there is no indication of program violations and the granting of these waivers would have a minimal impact on the program.

Harvest Preparatory School Order
In this Order the FCC grants a waiver filed by the petitioner seeking an extension of the services delivery deadline. When electronically submitting the Service Delivery Extension Request to the USAC website the applicant failed to include all the FRNs for which it was seeking an extension. The petitioner followed up with what the applicant thought was the list of the FRN’s which were left out of the original request. However, the applicant mistakenly resubmitted the original request. Accordingly, USAC indicated that the time for submitting a Service Delivery Extension Request had passed.

Citing the Great Rivers Order and the Tekoa Academy Order, the FCC holds that the facts in this situation rise to the level of “special circumstances” necessary for a waiver of the procedural deadline. The FCC further holds that had it not been for the mistake on the part of the applicant, the request would have been granted on its merit. Additionally, the Commission finds that the applicant made a good faith effort to correct its error and the failure to timely submit the Service Delivery Extension Request was not violative of any substantive program rules.

Expanets of North America Order
The petitioner sought a review of a USAC decision to rescind funds due to a failure to install Priority Two services by the annual September 30th deadline. The Commission finds that special circumstances exist in light of the fact the service provider was only a month late in installing its services. The Commissions holds that the short delay in the installation of services does not warrant a complete rejection of the funding commitment.

Petitioner submitted an invoice to USAC for services installed prior to the September 30th deadline. However, USAC ultimately denied payment claiming that the date on the accompanying documentation was after the service delivery deadline, which petitioner claims was a clerical error. Citing the Great Rivers Order, the FCC finds no reason to deny the service provider payment for services already delivered since the delay in installation was only a short time after the extension deadline.

Idaho Falls School District 91 Order
In this Order the Commission grants a request for review of a USAC decision denying a request by the applicant to change service providers. Specifically, the FCC grants a waiver of the competitive bidding rules. Petitioner sought funding for leased WAN service under the telecommunications category rather than Internet access. While the Commission finds that the applicant’s failure to seek bids for the service as Internet access was a violation of the competitive bidding requirements, special circumstances exist which make the waiver to the rules necessary.

The applicant posted a Form 470 for leased WAN service under the telecommunications category. However, USAC concluded that this request was for internal connections and denied the funding request. The petitioner filed an appeal which USAC granted. USAC issued the applicant a letter granting the requested funding as Priority One service but changed the service category from telecommunications to Internet access.

The applicant’s WAN contract was sold to a non-telecommunications carrier and applicant filed a SPIN change. USAC subsequently denied the SPIN change, arguing that the new service provider was not a telecommunications carrier as requested on the Form 470. The Commission agrees that applicant’s failure to categorize the leased WAN as Internet access is a violation of the competitive bidding rules. However, since this situation took place within the early years of the program when E-rate stakeholders were not as familiar with the operation of the program, this case rises to the level of special circumstances. Additionally, the eligible services list in 1999 only referred to WAN as a telecommunications service and not Internet access. The Commission finds that it is understandable that the applicant would file for leased WAN under the telecommunications category considering the eligible services list at the time listed it as such. The Commission further holds that the SPIN change should not have been denied by USAC since Internet access can be obtained by any service provider whether or not they are a telecommunications carrier.

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