On November 4, 2020, the Federal Communications Commission issued an Order granting a waiver of the “2-in-5 Rule” to four applicants who received retroactive denials of Priority Two disbursements from Funding Years 2010 and 2011. Replaced by the Category Two budget system, the former “2-in-5 Rule” stipulated that applicants could only receive Priority Two funding commitments in two out of every five consecutive E-rate Funding Years.  In its Order, the FCC states that although they “intended the 2-in-5 Rule to be administered on a rolling basis, USAC did not clearly communicate the application of the rule to applicants.  In addition to the inaccurate 2-in-5 Tool, the USAC website and annual applicant training presentations did not clearly describe the rolling application of the rule.”
Explaining its decision to grant the waiver, the Commission noted that it has granted similar waivers in the past for situations where “an applicant’s reliance on inaccurate official system-generated information combined with other unusual circumstances lead an applicant to rely on erroneous information to its detriment.”  The FCC also notes that “in general, the operation of the 2-in-5 Rule is not intuitive and is difficult to explain in simple, easily understandable language.”
The Order may be found here.