On October 1, 2018, the FCC granted Farmington Municipal School District (NM) appeal tied to a FY 2016 funding request for special construction of a self-provisioned network. The FCC found that Farmington did, in fact, comply with the cost-effective rules when evaluating their bids for this service.
The FCC concluded that “….Farmington properly considered the pre-discount total cost of ownership over the expected useful life of the facility when evaluating the bids. Specifically, the documentation Farmington provided to support its selection of NCI as the most cost-effective service offering, and the context within which Farmington later made statements regarding its post-discount costs, show that it based its cost-effectiveness analysis on the total cost of ownership over the expected useful life of the facility on a pre-discount basis as the Commission’s rules require, and not on its post discount costs as USAC concluded….”
The original USAC denial stated that “…FCC Rules require applicants to evaluate the cost effectiveness of the fiber solutions and to choose the most cost effective solution. The documentation demonstrated that the Dark Fiber IRU solution offered by LightStream Networks LLC. is most cost effective solution compared to the requested Self-Provisioned fiber solution offered by Network Cabling, Inc. Per program rules, E-rate support for self-construction is only available when it is the most cost effective option based on the total cost of ownership over the useful life of the facility when compared to all other solutions. The applicant must first seek bids for all options, wait at least the required 28 days, evaluate all bids, compare the winning bids for each type of solution based on the total cost of ownership over the useful life of the facility and then select the most cost-effective option. In your evaluation, you applied the state match to the total cost when you conducted the cost comparison. This reduced the total cost to the district, however, it did not properly evaluate the total cost of ownership over the useful life of the facility. Therefore, this FRN will be denied….”
The FCC is also directing USAC in order to permit Farmington sufficient time to complete the project and submit invoices before the deadline, the FCC is waiving the “applicable special construction deadline until June 30, 2019…and directing USAC to waive any other procedural deadlines that were missed while this issue was on appeal with the Commission.”
The Farmington FCC Appeal Decision can be viewed here.