On September 23, 2010, the FCC issued the new E-rate rules based on the National Broadband Plan that was submitted to Congress on March 16, 2010. The rules were published in the Federal Register on December 3rd and will become effective on January 3, 2011.
In a practical sense this is important for E-rate stakeholders to understand that, come January 3, 2011, USAC will enforce the new rules. For example, if an applicant wishes to change service providers, presumably the old rules – which are a bit less restrictive than the new regulations – will apply for another 30 days. Applicants should be prepared to adjust to the below SPIN change requirements by the January 3 deadline.
Existing SPIN Change Rules
Current rules do state that a change in service provider is allowable; however, a few conditions must be satisfied in order for the change to be compliant with regulations. In order for a SPIN change to be approved, the SLD requires that the following conditions be met:
- the SPIN change is allowed under its [the customer’s] state and local procurement rules,
- the SPIN change is allowable under the terms of any contract between the applicant and its original service provider, and
- the applicant has notified its original service provider of its intent to change service providers.
New SPIN Change Rules
- Applicants must have a “valid reason” for requesting a SPIN change. Examples given include a breach of contract by the original service provider, or failure of the original provider to perform under the contractual arrangement.
- Applicants requesting a SPIN change must change to the “runner up” or second place bidder in their original procurement process. In other words, when the customer originally performed a vendor selection process which resulted in the selection of the existing provider, they must go back to that original selection process and use the runner up as the new provider. As of today, it is unclear what process will be in place for applicants who only received one bid (or no bids) during their original process.
E-rate stakeholders are waiting for further clarification and guidance from the FCC and USAC on how the new rules will be interpreted and enforced. Funds For Learning will continue to provide information on our website as information becomes available.
Your Source for the latest Broadband Order News
Funds For Learning is your leading source for news and analysis of the FCC Sixth Report and Order. Continue to check our FCC E-rate Broadband Order page for the latest updates and further analysis of the Orders and the implications on the E-rate program. If you have any questions about the Orders, please call Funds For Learning at 405-341-4140, or email us at info@fundsforlearning.com.
