USAC Service Provider Call Notes – July

USAC’s Schools and Libraries Division hosts monthly conference calls, providing information and guidance for service providers participating in the E-rate program. The latest service provider call was held on July 6th and below is a brief synopsis of the call.

Funding Waves Issued Since June Call

  • Funding Year 2011: 6/23/2011 Wave 001: Committed $397 Million

                                 6/28/2011 Wave 002: Committed $58 Million

 

  • Funding Year 2010: 6/29/2011 Wave 055: Committed $6 Million

 

 

  • Funding Year 2009: 6/27/2011 Wave 088: Committed $6.8 Million

 

 

  • Funding Year 2008: 7/05/2011 Wave 81A: Committed $191,000

 

 

  • Funding Year 2007: 6/22/2011 Wave 80Y: Committed $872,000

 

FY 2011 Out-of-Window Letters

Two hundred and twenty-six applicants will receive “Out-of-Window” letters informing them that they missed the FY2011 Form 471 filing window and the extensions for certification. The letters will advise applicants as to next steps that may be taken.

Red-Light Rule Webinar

USAC has scheduled a third webinar covering the Red-Light Rule on July 7th at 2pm ET. The first 150 stakeholders who register will be able to attend. If you are interested in attending, you can contact USAC via e-mail at outreach@usac.org.

Invoicing Update

The SLD disbursed $199 million this past month, which is against $237 million total requested disbursements. The SLD reported that 97% of the invoices were paid within 30 days. The SLD also reminded service providers that they will not be able to receive their FY2011 disbursements until they have a processed Form 473 (Service Provider Annual Certification).

General Questions

Question: With educators handling the new Common Core Standards, more districts will be allowing students and administrators to bring various wireless devices into the classroom. What is the impact of CIPA on devices that have 3G/4G cellular Internet access? The districts can filter the wireless through the school's network but not the cellular Internet provided directly by the provider. Can the district rely on developing school policies to address 3G/4G cellular access since they cannot directly filter the devices?

Answer: Stakeholders need to remember that CIPA requirements are not only required for the E-rate program, but also federal programs like NCLB. However, in terms of the E-rate program, CIPA requirements only refer to school computers where the internet access funds are coming from the E-rate program and do not extend to any personal wireless devices that students may bring onto campus.

Question: On the previous SP call, it was stated that applicants are expected to pay their portion of the provider's invoice within 90 days of billing or risk forfeiture of funding. On the SLD site, Applicants Step 11, Obligation to Pay Non-Discount Portion says nothing about the timeframe. Please advise where this is specifically stated, either on the SLD website or FCC documents.

Answer: This requirement can be found on Page 9, Paragraph 24 of the FCC’s Fifth Report & Order.

Question: In the Schools and Libraries News brief dated 7/10/09, the following is stated: "For an FRN that covers 12 months of monthly service, USAC will look for 12 months of service in that funding year whether the bills are calculated in advance or in arrears. In other words, it is not necessary to prorate the costs for monthly service on (1) the first bill of the year for a month that included July 1 or (2) the last bill of the year for a month that included June 30. However, USAC will check to be sure that there is no overlap in payments - that is, that we did not already pay the discount on the entire bill for the same month of service for the previous funding year." A call to the Client Service Bureau confirmed this. Please confirm that a) this is indeed true and b) where on the SLD website or FCC documents this is specifically stated.

Answer: Yes, this statement is accurate.

Question: Customer indicated on their original FY2010 item 21 existing DSL services and additional anticipated Internet services. During the 2010 funding year, the applicant removed his 3 Mbps DSL service and established a 6 Mbps DSL service, would the 6 Mpbs DSL be eligible for the 2010 funding year?

Answer:There are several factors involved in determining if this would be eligible or if a service substitution would be required, and the SLD asked the person who submitted this question to send them more detailed information in order to more accurately answer their concern.

Question: The FCC's Kalamazoo decision indicates that an existing contract established prior to the filing window can be considered as one of the bids submitted in response to an applicant's Form 470. Has the precedent established by Kalamazoo been modified by the FCC's recent decision denying the request by Maryland Department of Juvenile Services.

Answer: No, the Maryland Dept of Juvenile Services appeal does not modify the Kalamazoo decision.

Question: An applicant has incorrectly indicated on the FY2011 Form 471 that the services are month-to-month, when actually services will be provided under a contract that calls for a one-time annual payment once the funding year has begun. Will this discrepancy delay USAC processing of an invoice for the annual charge, and if so, what steps should be taken to correct the Form 471 information?

Answer: This could be problematic. If an applicant requests a recurring service as opposed to a one-time non-recurring charge on the Form 471, the applicant and/or service provider would not be able to get reimbursed for any work done after June 30th of that funding year, and they cannot request an extension of time. The deadline for non-recurring (one-time) infrastructure projects is September 30th and there are certain circumstances in which where this project deadline may be extended. It is important for stakeholders to review the Receipt Acknowledgment Letter and correct any mistakes during PIA as once the funding request has been committed, it will take an appeal in order to correct the issue and get reimbursed for any work done after the June 30th deadline for recurring services.

Question: A slide at recent USAC training indicated that E-rate cannot be used to "get free stuff," including eligible components. However, service providers often provide price concessions, promotions, or free services for a bundle of all-eligible components in order to price competitively, which benefits both applicants and the fund. Here is an example of such a bid:

If this bid was the lowest cost of all bids received, would the applicant be in violation of USAC rules about free services if they selected it as “most cost effective” in their competitive bidding process? (Assume that all components are eligible and that equipment pricing is cost effective.)

Answer: In comparing bids, the applicant would need to compare eligible services to eligible services and if this was the winning bid they would need to deduct the $1,200 installation and the $600 training fee from their Form 471 request for a total Funding Request of $7,600.

The SLD will hold future calls or release additional training materials on the Free Services Advisory requirements as there seemed to be many questions and confusion over this topic.

***

Note: The above information is not the official minutes from the call, but simply notes from a call participant.