Sekar was unable to provide specific data to determine whether E-rate funded projects that duplicate fiber networks that are currently available, but she referenced programmatic safeguards to “ensure that cost-effectiveness remains the benchmark principle of E-rate-supported purchases and that E-rate discounts are not used to purchase unnecessary services” and reaffirmed USAC’s mission of ensuring that all requested E-rate funds are committed and disbursed in compliance with FCC rules, and protected from waste, fraud and abuse.
This response was result of a letter from Commissioner O’Rielly requesting understanding and explanation of overbuilding of fiber networks. In the letter, Commissioner O’Rielly voiced concern over the use of Universal Service Fund dollars to overbuild existing fiber networks, citing specifically, “at least three regional-based consortia” in Texas, that were seeking E-rate funding for the construction of Wide Area Networks despite having several providers that were “already capable of serving the individual schools within each region.”
To understand the potential overbuilding risk, Commissioner O’Rielly posed seven questions to Ms. Sekar, ranging from confirmation that USAC understood program rules, to specific questions about consortia-wide WAN projects.
Sekar was unable to provide the requested data to many of the questions citing that “USAC does not have specific data for special construction requests of consortia-wide WANs because the application does not require to indicate if the connection is for a WAN; instead, we maintain information on special construction in general”. From this general special construction data, Sekar revealed that over $417 million has been requested for special construction charges since Funding Year 2016, of which $202.3 million has been committed.
The complete response from USAC to Commissioner O’Rielly can be viewed here.