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The Black Hole Phenomenon

Overall, the SLD works hard to get funding letters, invoices and appeals processed in a timely manner. However, there are times when applications, appeals and invoices have been stuck in what E-rate stakeholders refer to as a “black hole” where no resolution or decision gets made, or the decision literally takes years. In fact, on August 1, the State E-rate Coordinators Alliance (SECA) submitted an ex parte with the FCC outlining their concerns about this particular SLD practice.

SECA recommended a “Bill of Rights” for stakeholders that include both applicants as well as the service provider community. Even if these ideas are not formally adopted by the FCC or USAC, I hope that in practice the regulators take these suggestions to heart.

There are two in particular that I want to explore further.


  • The right to expect a timely decision on funding requests, changes and invoices and appeals



  • The right to due process resolution of outstanding issues


SECA highlighted several applicants whose funding has been delayed for several years. The E-rate community can not understand why it would take several years to make a decision on an application. When that is the case, neither the schools nor the service provider can submit an appeal and there is no due process on finding a resolution in a timely manner.

Based on the last USAC Quarterly Report that was filed with the FCC on August 1, here is a list of potentially fundable applications from FY 2001 – FY 2008

FY2001 – 2 pending applications

FY2002 – 1 pending application

FY2003 – 2 pending applications

FY2004 – 29 pending applications

FY2005 – 15 pending applications

FY2006 – 51 pending applications

FY2007 – 113 pending applications

FY2008 – 142 pending applications

I hope that the SLD has reached out to these applicants – and the service providers tied to these requests – to help each understand the reasons for the delay and what, if anything, they can do to help the SLD get these resolved.

I would also like to turn to invoicing, timely decisions, and due process. The SLD consistently reports that most invoices (SPIS and BEARS) get processed within 30 days. Yet there are many examples when an applicant or service provider submits payment paperwork which gets held for months on end without an explanation for the delay. Simply put, that is not acceptable. If the SLD does not feel comfortable processing an invoice after 30 days, they should be obligated to either advise the applicant or service provider as to why the delay has occurred and provide an avenue for the stakeholder to get a resolution on their invoice.

This can be particularly frustrating for service providers, who based on an approved funding letter have delivered service only to find out later that the applicant may have made a clerical error on their original Form 471, leaving them unable to receive compensation for their work. Service providers deserve the same respect as the applicant community. Unfortunately, I have found that in many cases the SLD will not let a service provider know why a delay has occurred, nor will they give an estimated time for resolution. Service providers must have an expectation that they will be able to receive prompt payment for their services, or they will ultimately stop participating in the E-rate program.

There is no question that the SLD continues to improve their internal controls and processes, but I agree that this “black hole” phenomena does occur, and needs to be addressed as soon as possible.

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