FCC Waives Service Category Requirements
On February 8, 2017, the Federal Communications Commission issued an Order clarifying the eligibility of certain connectivity services. In September 2016, the Commission finalized the Funding Year 2017 Eligible Services List. Starting with the FY2017 ESL, “connections between different schools with campuses located on the same property” were defined as “Category One digital transmission services.” As a result, many connections which were classified as Category Two services in prior Funding Years will now be classified as Category One services. The recent clarifying Order creates two limited waivers of this classification:
- If an applicant has a pre-existing contract for connections which would have previously been classified as Category Two (but would now be classified as Category One per the FY2017 ESL), the applicant may continue to request Category Two funds for those services for the remaining life of that contract. New contracts for service and/or voluntary extensions of existing contracts do not qualify for the waiver, and services must be classified per the FY2017 rules.
- If two or more schools or libraries share a single building, the waiver allows applicants to “seek Category Two funding for customer-owned or -controlled inside wiring that connects different schools and libraries within the same building” if they prefer. Applicants may also request Category One discounts for those connections “if they determine that they can do so in compliance with the Commission’s rules and the eligible services list for the applicable funding year.”
In its Order, the Commission notes that the change in standards would be “inconsistent with the public interest” in cases where pre-existing multi-year contracts were procured using a Form 470 filed for Category Two services but not Category One, and in cases where applicants would have to comply with the procurement rules for self-provisioned networks when securing connectivity between multiple schools in the same physical building. The Commission notes “the limited and extraordinary nature of the waivers granted in this Order,” and reminds applicants that under normal circumstances “E-rate program rules do not guarantee that a multi-year contract will continue to be funded for the duration of the contract.”