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FCC Releases Gift Rule Appeal

On November 4, 2011, the FCC granted appeals filed by Trillion Partners, Inc and 3 applicants who were denied funding as a result of gift-giving activity. In its appeal decision, the Commission stated that the affected applicants held a fair and open competitive bidding process and followed relevant state and local procurement regulations.

Specifically, the FCC found “…that the gifts at issue here did not, by themselves, compromise the competitive bidding process… in each instance, the gifts were minimal, they were provided over the course of several years, or they were given to employees with no authority to bind the district to a contract or who had no ability to influence the competitive bidding decision…” The decision goes on to state that “…based on our review of the record, we find that the applicants selected Trillion in accordance with the Commission’s E-rate competitive bidding rules that existed at the time.”

In September 2010 the FCC released the Sixth Report & Order, in which they clarified what types of gift-giving activity would be subject to denials. In its November 4 appeal decision, the FCC clarified that they will not tolerate gift rule violations in the future, stating that “… our analysis of these instances would be different under our current rules, because the Commission established clear guidelines on permissible gifts in the Schools and Libraries Sixth Report and Order, which became effective on January 3, 2011.”

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