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The Schools and Libraries Program News Archive gives you access to all announcements related to the Schools and Libraries Program as they were made throughout the years. The archives will be updated as new announcements are made.
An Eligible Telecommunications Provider (ETP), a USAC term used for "telecommunications carrier," is an entity that provides telecommunications services, i.e., transmission services on a "common carriage" basis. To be a telecommunications carrier, the carrier must (1) allow the customer to transmit information of its own design and choosing, without change in the form or content of the information, and (2) provide that capability for a fee directly to the public, or to such classes of users as to be effectively available to the public (i.e., hold itself out to serve indifferently all potential users). In many instances, a state regulatory authority certifies a company providing telecommunications services as a common carrier through the issuance of a license or an order. However, some categories of service (such as cellular, paging and satellite) may not be subject to state regulatory authority.
All telecommunications carriers are required under FCC rules to file an FCC Form 499A. By filing a Form 499A and checking at least one of the boxes on line 227, you are indicating that you hold yourself out as a telecommunications carrier and that you meet the above definition. Telecommunications carriers are required to file an FCC Form 499A on an annual basis, as well as Form 499Qs quarterly, as applicable. In order to expedite processing, your FCC Form 498 should also reflect your Form 499 Filer I.D.
If you provided telecommunications services under the E-rate program and/or Rural Health Care program without having filed a Form 499A, this posting serves as notice that your failure to file a FCC Form 499A may be referred to the FCC for appropriate enforcement action.
USAC makes commitments for telecommunications services for applicants when
the service provider is identified in USAC's database as an ETP; but, notwithstanding
that identification, it is the service provider that is responsible for ensuring
it meets these requirements in all instances of discounted telecommunications
On December 23, 2003, the FCC released its Third Report and Order and Second Further Notice of Proposed Rulemaking (FCC 03-323) that addresses several matters related to the E-rate program and seeks comment on several issues.
There are important rule changes and clarifications in this Order that all applicants and service providers should read carefully. All rule changes and clarifications shall be implemented upon the effective date of this Order, unless specified otherwise. The effective date will be thirty days after the publication of this Order in the Federal Register. Following are direct quotes from the Third Report and Order:
Upgrading or replacing Internal Connections. [E]ach eligible entity may receive commitments for discounts on Priority Two services . . . no more than twice every five funding years. The practical effect of this rule will be to permit applicants to receive funding once every three years for internal connections, as supported by the record, but will allow applicants to obtain internal connections in two consecutive years as part of a staged implementation of internal connections. In order to give applicants sufficient planning time, . . . this rule will become effective beginning with support received in Funding Year 2005. Commitments for Priority Two services received in years prior to Funding Year 2005 will not be considered in determining an applicant’s eligibility to receive support for Priority Two services. (para 12)
For the purpose of determining whether an applicant is eligible to receive a funding commitment for Priority Two services under this rule, the five-year period begins in any year, starting with Funding Year 2005, in which the entity receives discounted Priority Two services. The rule is applicable to discounts for services that are site-specific to the entity and for services that are shared by the entity with other entities. Thus, if an entity receives support only for shared services in a particular funding year, that funding will be counted as one of the two years out of five that it may receive support. The restriction does not apply to consortium members who do not actually receive Priority Two funding when other members of the consortium receive discounts in specific funding periods. (para. 13)
[E]ven with this revised policy on the funding of internal connections, funding commitments will continue to be made in accordance with the annual funding cap. Thus, it is conceivable that an applicant may be eligible to apply for discounts on Priority Two services and still be denied funding because demand for discounts exceeds available funding. . . . [I]t is the receipt of support for Priority Two services, rather than the application for support, that counts toward the limitation that an entity may receive in only two out of five years. (para. 16)
Basic maintenance on Internal Connections. Maintenance requests will continue to be funded as Priority Two funding. However, maintenance requests will be considered for funding separately from other requests for Priority Two funding and, therefore, will not be subject to the twice-every-five years funding rule . . . (para 21)
In response to allegations of waste, fraud, and abuse, [the FCC] prospectively clarif[ies] the services eligible for Priority Two support as basic maintenance costs for internal connections. (para. 22)
Basic maintenance services are “necessary” if, but for the maintenance at issue, the connection would not function and serve its intended purpose with the degree of reliability ordinarily provided in the marketplace to entities receiving such services without e-rate discounts. Basic maintenance services do not include services that maintain equipment that is not supported or that enhance the utility of equipment beyond the transport of information, or diagnostic services in excess of those necessary to maintain the equipment’s ability to transport information. For example, basic maintenance will include repair and upkeep of previously purchased eligible hardware, wire and cable maintenance, and basic technical support, including configuration changes. On-site technical support is not necessary to the operation of the internal connection network when off-site technical support can provide basic maintenance on an as-needed basis. Services such as 24-hour network monitoring and management also do not constitute basic maintenance. Such services are therefore ineligible for discounts under the schools and libraries universal service mechanism. (para. 23)
[T]echnical support, including on-site Help Desks, is not eligible under [the FCC’s] rules if it provides any ineligible features or functions. A Help Desk system typically goes beyond the level of support authorized by the Commission . . . [I]f a technical support contract provides more than basic maintenance, it shall be ineligible for discounts . . . [The FCC] instruct[s] USAC to review and fund requests for discounts on maintenance services in accordance with this clarification, as of the effective date of this Order. (para 24)
To the extent this clarification impacts existing contracts, [the FCC] shall permit parties 90 days from the effective date of this Order to renegotiate those contracts, or to provide the Administrator with an itemized breakout of the components of the contract, clearly identifying the portion of the contract price to be allocated to basic maintenance. [The FCC] will permit parties to utilize cost allocation for signed contracts in existence as of the effective date of this Order. The burden is on the applicant to justify what portion of a contract price should be allocated to basic maintenance services. (para. 24 footnote 47)
Transfer of equipment. The [Telecommunications] Act [of 1996] prohibits the sale or transfer of equipment purchased with discounts from the universal service program in consideration of money or anything else of value. Here, in order to promote the goal of preventing waste, fraud, and abuse, [the FCC] extend[s] that prohibition to all transfers, without regard to whether money or anything of value has been received in return[,] for a period of three years after purchase. (para. 25)
[The FCC] find[s], however, that it would be wasteful to prevent recipients from transferring equipment that, after a reasonable period of time, has been replaced or upgraded. [The FCC] therefore permit[s] recipients freely to transfer equipment to other eligible entities three years or more after the purchase of such equipment. Consistent with the Act, however, such transfers must not be in consideration of money or anything else of value. (para. 26)
[A] recipient may transfer equipment purchased with universal service discounts to other eligible entities if the particular location where the equipment was originally installed is permanently or temporarily closed. In these limited circumstances, . . . it is not necessary for the transferring and receiving entities to have comparable discount levels, as long as each is eligible under the schools and libraries program. (para 27)
In the event that a recipient is permanently or temporarily closed and equipment is transferred, the transferring entity must notify the Administrator of the transfer, and both the transferring and receiving entities must maintain detailed records documenting the transfer and the reason for the transfer for a period of five years. [The FCC] instruct[s] the Administrator to verify compliance with this requirement as part of its beneficiary audit reviews. In order to enable the Administrator to verify compliance with this transfer prohibition, [the FCC] require[s] all recipients of internal connections support to maintain asset and inventory records for a period of five years sufficient to verify the actual location of such equipment. (para. 28)
This rule change shall be implemented upon the effective date of this Order. To facilitate enforcement of this rule, [the FCC] will amend the FCC Form 471 for Funding Year 2005 to include a reasonable use certification. In order to receive discounts, applicants must certify that they will use all equipment purchased with universal service discounts at the particular location for the specified purpose. Applicants will thereafter be held accountable for their compliance with the reasonable use certification. (para. 29)
Allocating eligible and ineligible costs. [I]f a product or service contains ineligible components, costs should be allocated to the extent that a clear delineation can be made between the eligible and ineligible components. The clear delineation must have a tangible basis and the price for the eligible portion must be the most cost-effective means of receiving the eligible service. If the ineligible functionality is ancillary, the costs need not be allocated to the ineligible functionality. An ineligible functionality may be considered “ancillary” if (1) a price for the ineligible component that is separate and independent from the price of the eligible components cannot be determined, and (2) the specific package remains the most cost-effective means of receiving the eligible services, without regard to the value of the ineligible functionality. (para. 37)
Schools and libraries should continue to allocate eligible and ineligible costs in their contracts with service providers. In the interests of ensuring that support be provided only for eligible services, the Administrator also should continue to employ the use of the cost allocation method when necessary. (para. 38)
[T]he Administrator may rely on the cost allocation methods [the FCC] adopt[s] today in applying the 30 percent rule and performing any resulting adjustments. (para. 39)
Annual update of the Eligible Services List. [The FCC] now adopt[s] a more formalized process for updating the eligible services list, beginning with Funding Year 2005. Under the new rule, USAC will be required to submit by June 30 of each year a draft of its updated eligible services list for the following funding year. The Commission will issue a Public Notice seeking comment on USAC’s proposed eligible services list. At least sixty days prior to the opening of the window for the following funding year, the Commission will then issue a public notice attaching the final eligible services list for the upcoming funding year. The Commission anticipates that this public notice will be released on or before September 15 of each year. This process will provide greater transparency to the development of the eligible services list. The yearly updated list will interpret what may be funded under current rules, and will represent a safe harbor that all applicants can rely on in preparing their applications for the coming funding year. (para. 40)
Prohibition on the provision of free services. The Commission requires that an entity must pay the entire undiscounted portion of the cost of any services it receives through the schools and libraries program. For the purpose of this program, the provision of unrelated free services by the service provider to the entity constitutes a rebate of the undiscounted portion of the costs, a violation of the Commission’s rules. (para. 41)
Service substitution procedures. [The FCC] also formally adopt[s] and codif[ies] the Administrator’s current procedures relating to requests for service or equipment changes. These procedures provide flexibility to applicants where it has become necessary to make a minor modification to their original funding request. [The FCC] find[s] that the Administrator’s service substitution procedures are consistent with the Commission’s goal of affording schools and libraries maximum flexibility to choose the offering that meets their needs most effectively and efficiently. . . . [H]owever[,] USAC’s current procedures permit a service substitution only if the substitution does not result in an increase in the pre-discount price of the eligible service. [The FCC] will permit applicants to substitute an eligible service with a higher pre-discount price, but will provide support based on the lower, original price, rather than the higher price for the substituted service. (para. 42)
[S]ervice change requests will be granted for a substitute service or product where (1) that service or product has the same functionality; (2) the substitution does not violate any contract provisions or state or local procurement laws; (3) the substitution does not result in an increase in the percentage of ineligible services or functions, but (4) support shall be provided based on the lesser of the pre-discount price of the original service or the substitute service. In order to ensure the integrity of the competitive bidding process, [the FCC] require[s] the applicant’s request for a service change to include a certification that the requested change in service is within the scope of the controlling Form 470, including any associated Requests for Proposal (RFP), for the original services. [The FCC] also require[s] that support not be provided in excess of the amount the applicant originally would have been eligible for. (para. 43)
Certain on-premise Priority 1 equipment issues. [I]t is administratively efficient for USAC to use the factors relied upon in the 1999 Tennessee Order as a processing standard. USAC has posted an advisory on its website providing guidance to help applicants and service providers understand how it has implemented the 1999 Tennessee Order. Specifically, USAC has provided guidance that a private branch exchange (PBX) that routes calls within a school or library is not eligible for support as Priority One on-premises equipment. This guidance is consistent with [the FCC’s] 1999 Tennessee Order because a PBX, like most on-premises equipment, is presumed to be Priority Two internal connections. Moreover, it is unlikely that an applicant would be able to establish a rebuttal to that presumption, because the PBX functions to transmit information from and between multiple locations within a local network. (para. 47)
[T]he 1999 Tennessee Order does not preclude the provision of support for on-premises equipment that constitutes basic termination equipment. Accordingly, an applicant may receive a discount for the lease of a cable modem as part of Priority One Internet access. A cable modem is a type of basic terminating component. It is analogous to a channel service unit/data service unit (CSU/DSU) or a network interface device (NID) in that it functions as the termination point for a Priority One service. . . . [The FCC] conclude[s] that it is appropriate to provide discounts on the lease of a single basic terminating component used at a site as a Priority One service. (para. 48)
[I]t is appropriate to provide Priority One discounts on service provider charges to recoup the cost of leasing optical equipment to light fiber, when that optical equipment is the single basic terminating component of an end-to-end network and it is necessary to provide an end-to-end telecommunications or Internet access service. [The FCC] reach[es] that conclusion even though the optical equipment on the customers’ end, as a technical matter, is dedicated to the customer’s sole use. (para. 49)
Carryover of unused funds. [The FCC] also amend[s] the rules to require the Administrator to file with the Commission quarterly estimates of unused funds from prior years of the schools and libraries support mechanism when it submits its projection of schools and libraries program demand for the upcoming quarter. This amendment codifies the Administrator’s existing reporting practice and reporting cycle. The quarterly estimate serves to prepare the Administrator for the annual release of carryover funds and provides schools and libraries with general notice regarding the amount of unused funds that may be made available in the subsequent year. (para. 54)
[The FCC] further amend[s] the rules to make unused funds available annually in the second quarter of each calendar year for use in the next full funding year of the schools and libraries mechanism. Based on the estimates provided by the Administrator, the Commission will announce a specific amount of unused funds from prior funding years to be carried forward in accordance with the public interest to increase funds for the next full funding year in excess of the annual funding cap. For example, the Commission will carry forward the unused funds as of second quarter 2004 for use in the Schools and Libraries Funding Year 2004, thereby increasing the available funds in Funding Year 2004 above the annual funding cap of $2.25 billion. The Wireline Competition Bureau will announce the availability of carryover funds during the second quarter of the calendar year, when it announces the universal service contribution factor for the third quarter of each year. The amount of unused funds to be carried forward will be deemed approved by the Commission if it takes no action within 14 days of release of the public notice announcing the contribution factor and the amount of unused funds. (para. 55)
In order to implement the Commission’s prior decision to carry over funds beginning April 1, 2003, [the FCC] modif[ies] the schedule for this year only in order to implement the process for Funding Year 2003. [The FCC] direct[s] the Administrator to carry forward unused funds as projected for the first quarter of 2004 for use during the remainder of Funding Year 2003. While there will be an increase in the amount of funds available in Funding Year 2003, . . . no decisions previously made by USAC concerning the distribution of funds for Funding Year 2003 will be reversed or revisited. Only funding requests that are currently pending will be considered for the Funding Year 2003 carryover funding. (para. 57)
Lit fiber as a Priority 1 service. In order to receive support for services using lit fiber as a Priority One service, the school or library must purchase a functioning service from either a telecommunications service provider or internet access provider, which in turn is responsible for ensuring that both the fiber and the equipment to light the fiber are provided. (para. 76)
In cases in which a school or library has previously purchased equipment to light fiber, such equipment may be traded-in to the service provider and leased back by the applicant. The applicant may not use the credit for the trade-in to pay its non-discounted portion of the services. Such a contract modification would be deemed a minor contract modification under section 54.500(g) of the Commission’s rules if this was within the scope of the original contract and the change has no effect or negligible effect on price, quantity, quality, or delivery under the original contract. For instance, such a change could fit within the minor contract modification rule if the original contract was for the provision of high bandwidth transmission capability. (para. 76 footnote 155)
Go to the Third Report and Order (FCC 03-323)
Applicants are reminded that the Funding Year 2004 Form 471 application filing window closes on February 4, 2004 at 11:59 p.m. EST.
You are also reminded that January 7, 2004 is the last possible date for you to post your Form 470 online in order to meet the 28-day filing requirement and to submit a complete Form 471 by the window close. However, if you post a Form 470 online on that date, you must accomplish all of the following ON February 4, 2004:
The following materials associated with Funding Year 2004 Forms 471 must be received by 11:59 p.m. EST on February 4, 2004 or postmarked on or before February 4, 2004 in order for the request to receive consideration as inside the window. These materials are:
If you submit your Form 471 or your Form 471 certification on paper, you are
advised to keep proof of the date of mailing. If an application is placed in
a drop-off box, the postmark date may be after the drop-off date if the last
pickup of the day has already occurred. For more information, please refer
to Proof of Postmark or
Delivery posted in the Reference Area of this web site.
The SLD has been offering online E-rate training to service providers on a number of topics. The SLD is now making the live training sessions available to applicants as well as service providers on a space-available basis. In addition, both applicants and service providers can view sessions that have been recorded previously.
Upcoming live sessions will be offered on the following topics:
For further details on times and dates and to register, please go to the WebEx site. You can follow the registration instructions for an online session by selecting the “Registration” link, or attend a recorded session by selecting the “Recorded Session” link under the “Attend a Session” heading. We will continue to add archived versions of recorded sessions as these recordings are processed.
Service providers are also reminded that they can be added to the list to
receive the service provider agenda electronically by sending an e-mail message
provider listserv and put "subscribe sld-sp" (without
the quotes) in the body of the message.
On December 8, the FCC issued an Order (FCC 03-313) that consolidates the review of appeals from eight FY2002 appellants who used a “Systems Integrator” approach in their Forms 470 and whose related funding requests were denied by the SLD. In this order, the FCC clarified important concepts for applicants and service providers. Go to FCC Order 03-313 [PDF, 330kb].
There are some very important points of clarification in the Order that all Funding Year 2004 applicants should read carefully. Following are direct quotes from the Order providing such clarifications:
Technology plans. An applicant’s FCC Form 470 must be based upon its carefully thought-out technology plan and must detail specific services sought in a manner that would allow bidders to understand the specific technologies that the applicant is seeking. Thus, a Form 470 that sets out virtually all elements that are on the eligible services list would not allow a bidder to determine what specific services the applicant was seeking. The Form 470 should not serve as a planning device for applicants trying to determine what is available or what possible solutions might meet the applicant’s specified curriculum goals. A Form 470 should not be a general, open-ended solicitation for all services available on the eligible services list, with the hope that bidders will present more concrete proposals. The research and planning for technology needs should take place when the applicant drafts its technology plan, with the applicant taking the initiative and responsibility for determining its needs. The applicant should not post a broad Form 470 and expect bidders to do the “planning” for its technological needs. (para. 28)
Some applicants have simple, straightforward requests, such as discounts on telephone lines to each of their classrooms or dial-up Internet access for several computers in a library. Other applicants seek discounts on highly complex and substantial systems that span multiple sites and utilize highly advanced equipment and services. The FCC Forms 470 developed from an applicant’s technology plans should mirror the level of complexity of the services and products for which discounts are being sought. (para. 29)
Systems Integration services. The applicant’s FCC Form 470, based on the applicant’s technology plan, puts potential bidders on notice of the applicant’s specific needs to encourage competitive bids, so that the applicant may avail itself of the growing competitive marketplaces for telecommunications and information services. The fact that these certifications on the FCC Form 470, all of which relate to the actual products and services for which the applicant will seek discounts, are required on the FCC Form 470, indicates that the Commission’s rules and procedures contemplate that providers will bid on the cost of the specific products and services eligible for discounts, based on the applicant’s technology plan. [The FCC’s] rules and procedures do not contemplate that potential providers will bid solely on Systems Integration services, with the expectation that the applicant will decide on specific products and services after the applicant has selected a provider. (para. 26)
Overbroad Forms 470. Just as an FCC Form 470 may fail to provide sufficient information to potential bidders by not listing all the services for which the applicant may seek discounts, an applicant’s FCC Form 470 may fail to provide sufficient information by virtue of its overbreadth, with so many services listed that it fails to indicate which services the applicant is likely to pursue. Potential vendors of specific services are less likely to respond to an all-inclusive FCC Form 470, concluding that the applicant does not realistically intend to order all services listed, and being unable to determine which services are actually being sought. (para. 32)
[T]he requirement for a bona fide request means that applicants must submit a list of specified services for which they anticipate they are likely to seek discounts consistent with their technology plans, in order to provide potential bidders with sufficient information on the FCC Form 470, or on an RFP cited in the FCC Form 470, to enable bidders to reasonably determine the needs of the applicant. An applicant may, in certain circumstances, list multiple services on its FCC Form 470, knowing that it intends to choose one over another. However, all products and services listed on the FCC Form 470 must be linked in a reasonable way to the applicant’s technology plan and not request duplicative services. The Commission has previously stated that [it] expect[s] applicants to “do their homework” in determining which products and services they require, consistent with their approved technology plan . .…[R]equests for service on the FCC Form 470 that list all services eligible for funding under the E-rate program do not comply with the statutory mandate that applicants submit “bona fide requests for services.” (para. 36)
Detail on Form 470/RFP. Applicants must submit a “complete” description of services sought “for competing providers to evaluate.” Service providers thus must have sufficient information to evaluate the services sought in order to formulate bids. Similarly, if an applicant on its FCC Form 470 refers potential bidders to an RFP it has released or will release, the applicant’s RFP must provide sufficiently detailed and specific information that potential bidders may evaluate the E-rate eligible services sought in order to formulate bids. (para. 34)
Existence of an RFP. [A]pplicants will know at the time that they submit their FCC Form 470 whether they intend to release an RFP relating to the services listed on the FCC Form 470. To the extent that the applicant also relies on an RFP as the basis of its vendor selection, that RFP must also be available to bidders for 28 days. This clarification will help to fulfill the purposes of the FCC Form 470 by informing potential bidders if there is, or is likely to be, an RFP relating to particular services indicated on the form. (para. 39)
State and local procurement rules. Although compliance with any applicable state and local procurement laws is one of the minimum requirements for selecting services under the E-rate program, there are also certain specific FCC requirements with which all E-rate applicants must comply, regardless of state and local law. Section 54.504(a) of the Commission’s rules specifically states that the Commission’s “competitive bid requirements apply in addition to state and local competitive bidding requirements . . . .” For example, program rules require the posting of an FCC Form 470 and Form 471 in order to obtain funding under the program, and these constitute federal requirements that apply in all circumstances, regardless of state and local law. Similarly, even though a state or local procurement law may permit an applicant to forego competitive bidding for products and services under a certain dollar threshold, the Commission’s rules require that applicants for E-rate services seek competitive bids on all such services, to the extent that the services covered by the state law are eligible for discounts from the federal universal service fund. (para. 41)
Most cost-effective bid. Applicants must select the most cost-effective offerings, and price must be the primary factor in determining whether a particular vendor is the most cost-effective. Price need not be the exclusive factor in determining cost-effectiveness, however, so that schools and libraries selecting a provider of eligible services “shall carefully consider all bids submitted and may consider relevant factors other than the pre-discount prices submitted by providers.” (para. 47)
[P]rice must be the primary factor in considering bids. Applicants may also take other factors into consideration, but in selecting the winning bid, price must be given more weight than any other single factor. (para. 50)
Ineligible products and services. [A]pplicants and service providers are prohibited from using the schools and libraries support mechanism to subsidize the procurement of ineligible or unrequested products and services, or from participating in arrangements that have the effect of providing a discount level to applicants greater than that to which applicants are entitled. The Administrator has implemented this Commission requirement by requiring that: (1) the value of all price reductions, promotional offers, and "free" products or services be deducted from the pre-discount cost of services indicated in funding requests; (2) costs, trade-in allowances, and discounts be fairly and appropriately derived, so that, for example, the cost for eligible components is not inflated in order to compensate for discounts of other components not included in funding requests; and (3) contract prices be allocated proportionately between eligible and ineligible components. (para. 60)
[A]pplicants may not contract for ineligible services to be funded through discounts under the E-rate program. (para. 61)
When confronted with products or services that contain both eligible and ineligible functions, SLD in the past has utilized cost allocation to determine what portion of the product price may receive discounts. [The FCC] generally endorse[s] this practice as a reasonable means of addressing mixed use products and services. . . . [The SLD] should ensure that discounts are provided only for “basic maintenance” and not for technical support that falls outside the scope of that deemed eligible in the Universal Service Order. For instance, calls from end-users may involve problems with end-user workstation operating systems and hardware, and Help Desks typically field questions about the operation and configuration of end-user software. Such end-user support is not eligible for E-rate funding. Even if the actual correction of a problem involves non-contractor personnel, and is therefore not reimbursed with E-rate funds, the routing and logging function of the comprehensive Help Desk activities would effectively support ineligible services, and therefore is ineligible for discounts. (para. 64)
Service provider involvement in the application process. [D]irect involvement in an application process by a service provider would thwart the competitive bidding process. (para. 60)
Go to FCC Order 03-313 [PDF, 330kb].
Following is a list of the documents or pages that have changed on this web site since the last posting on updates:
The “Get Help!” page has been removed because users can now Submit a Question without first referring to that page. Links to submit questions from other Reference Area documents are being redirected to the Submit a Question page as well.
The documents Cost Allocation Guidelines for Products and Services that Contain Eligible and Ineligible Components and Cost Allocation Guidelines for File Servers and Other Components contain minor updates to improve the clarity of the examples provided.
The document Service Substitutions now contains a list of the information that an applicant must provide for the SLD to process a service substitution request.
The document E-rate
Discounts for Schools and Libraries
has been updated for Funding Year 2004. This document can be accessed from
the “Program Overview” link in the Reference Area; the “Program
Description” link that pointed to the same document has been removed.
The content of this document is also available on the series of web pages linked
to the “Applicants” title bar on the upper left side of this web
The Task Force on the Prevention of Waste, Fraud and Abuse recommended that applicants have the ability to review their portion of a Service Provider Invoice Form (Form 474) submitted by Internal Connections service providers before payments are disbursed to those service providers. The SLD announced in its response to the Task Force recommendations that this “invoice check” procedure has been implemented. The procedure is detailed below.
To request an invoice check, applicants should call the Client Service Bureau
at 1-888-203-8100. They should be prepared to provide specific information
about each FRN for which they wish notification prior to payment. Each time
a SPI Form that references an FRN in an invoice check status is submitted for
payment, the SLD will ask the service provider to obtain a certification from
the applicant that the invoiced services were delivered and installed. Payment
will not be processed on an FRN subject to an invoice check until the applicant
makes this certification.
On November 26, USAC filed the Recommendations of the Task Force on the Prevention of Waste, Fraud and Abuse [PDF, 150kb] with the FCC. The filing has also been posted to the Task Force section of this web site.
The filing consists of four parts:
USAC would like to express its appreciation for the time, effort and preparation that the members of the Task Force put into writing and completing their recommendations.
The SLD has posted a revision to the document “On-premise Priority 1 Equipment.” This document describes the circumstances in which equipment located at applicant sites can be considered a part of a Priority 1 service (telecommunications services or Internet access.)
The revised document clarifies that the FCC Order that provides guidance for SLD’s review of funding requests that include on-premise Priority 1 components involved a specific fact pattern. (This Order is often known as the “Tennessee Decision,” and is cited in the revised web site document.) SLD utilizes the principles of this decision, based on that fact pattern, as a processing standard for funding requests. We are not able to provide Priority 1 treatment to on-premise components that do not meet this fact pattern. It is possible that the FCC might rule differently if a different fact pattern were presented to them.
The revised document clarifies that Priority 1 funding is not available for PBX’s, because they are utilized to route calls within the premises of a school or library. They will continue to be eligible as Internal Connections.
Click here to view the revised document.
To facilitate the online application process, the SLD has replaced the online Form 470 PDF with the traditional online Form 470 available in previous years. The online Interview format will also continue to be available.
To access the traditional version, click “Apply Online” on the SLD main page and select “Create Form 470” under the Form 470 column. Please note the following:
If you started a Form 470 PDF and you want to continue your work, you MUST use the Interview format.
If you start a new Form 470 now, you must complete your form using the version — traditional or Interview format — you use to start your form. You CANNOT switch to the other version to complete your form.
If you have any questions, you may Submit A Question or call the Client Service Bureau at 1-888-203-8100.
The SLD will be improving the security for the Applicant PIN Request System. As part of this process, all applicant PINs will be deactivated on Wednesday night, November 19. The SLD will send an e-mail message to the e-mail address associated with each PIN as a notification of this deactivation. To certify forms online, applicants must re-apply for a PIN.
To obtain a new PIN, the person who was authorized and who signed (either on paper or online) an online Form 471 or a completed, online Form 486 that contains at least one funded FRN must enter the application number and the security code for that form. The authorized person requesting a PIN will also have to provide identifying contact information and a current e-mail address. If the system requirements are met, the SLD will send the authorized person an e-mail within one hour with the information necessary to access the new PIN. The PIN can be used immediately to certify a form online.
The restructured Applicant PIN System will enable enhanced security: an e-mail message will be sent to the e-mail address registered to the PIN each time the PIN is used. If the security of the PIN has been compromised, the authorized person will know immediately and should call the Client Service Bureau to alert the SLD.
Applicants whose Internet Service Providers do not update information on a real-time basis may encounter difficulties in accessing the Applicant PIN Request site before 10:00 AM EST on Monday, November 24. These applicants will receive an online message containing additional information if they attempt to access the site.
If you have any questions or need help in obtaining a new PIN, please Submit a Question to the Client Service Bureau or call 1-888-203-8100.
We apologize for any inconvenience this restructuring may cause.
WebEx training for service providers is now open for registrations for the following topics:
For further details on times and dates and to register, please go to webex and follow the registration instructions. We encourage you to attend the FCC Form 498 training. This is a newly revised Form 498 and it will now be available online. WebEx training notices will be posted on the web site and you can also receive notices through our service provider list serv. You can be added to the list to receive the service provider agenda and WebEx training notices electronically by sending an E-mail message to service provider listserv and put "subscribe sld-sp" (without the quotes) in the body of the message.
The SLD has designed a new option for submitting programmatic questions online.
Applicants, service providers and others with E-rate questions can access this option by clicking on the Submit a Question link in the “Contact Us” box on the right-hand side of this web page. The button links to an online form that allows users to submit questions about the program and submit attachments related to your question. This form replaces a number of the e-mail addresses formerly used to ask questions and submit attachments; the system will generate a reminder by e-mail to anyone attempting to use one of these e-mail addresses that questions should now be submitted using the new link. You will receive within one hour of submission an acknowledgment of your question and the assigned case number.
By completing the online form, the user provides the information that the SLD needs to research and answer a question, thus eliminating the need for multiple contacts. Answers will be returned by e-mail to the address supplied by the questioner.
For more information, please go to the Submit a Question link.
The SLD has posted a new document, Principles for Treating Entities Under Investigation, to the Reference Area of this web site. This document describes the conditions under which the SLD can make commitments and disbursements in situations where there is a pending law enforcement investigation.
Please note that the SLD will continue to deny all FRNs that it determines
are inconsistent with program rules.
The Form 471 application filing window for Funding Year 2004 opened at noon today, November 5, 2003. Applicants who have completed the required 28-day posting period for their Forms 470 may now file Form 471.
There are two options available for filing a Form 471 online from the Apply Online page. The “Form 471 Interview” button takes applicants to an updated version of the Form 471 Interview format that was available last year. The “Create Form 471” button takes applicants to an updated version of the online format for the Form 471 used in previous years. Applicants who begin the filing process using one format can switch to the other format to complete their form.
Applicants filing on paper can download and print a paper copy of the Form 471 from the Applicant Forms page on this web site.
Applicants completing Form 471 should refer to the Form 471 Instructions, which are also available from the Applicant Forms page.
WebEx training for service providers is now open for registrations for the following topics:
For further details on times and dates and to register, please go to https://universalservice.webex.com and follow the registration instructions. We will be adding more topics as we finalize time and date details. WebEx training notices will be posted on the web site and you can also receive notices through our service provider list serv. You can be added to the list to receive the service provider agenda and WebEx training notices electronically by sending an E-mail message to service provider listserv and put "subscribe sld-sp" in the body of the of the message.
Following is a list of the documents or pages that have changed on this web site since the last posting on updates:
A new page listing Suspensions and Debarments from the E-rate program has been posted to the web site. This page can be accessed from the “Suspensions & Debarments” link in the Quick Links box.
The document CIPA Guidance for Libraries for FY2003 has been updated, principally to clarify the circumstances under which consortia containing libraries unwilling to make a CIPA certification are required to file a Form 500 within 30 days of filing a revised Form 486.
The sample letters Form 486 Notification Letter, Form 500 Notification Letter, and Funding Commitment Decision Letter have been updated to match the text of letters currently being sent to applicants.
SLD will host its first WebEx Setup and Preview session on October 17, 2003, at 2:00 p.m. Eastern Daylight time. Please go to universalservice.webex to register. We are offering this to enable service providers to log onto WebEx and become familiar with some of the basic functions to be used during training sessions. If more than 130 service providers register, we may offer a second session on the same day.
You will be sent a second notification that contains detailed information on how to log in and dial in to the session.
Two important deadlines are approaching for certain Funding Year 2003 and Funding Year 2002 applicants.
The deadline for postmarking invoices (Form 472 BEAR Forms and Form 474 SPI Forms) for FY2002 recurring services is October 28, 2003. For more information, please refer to Invoicing Deadlines and Extension Requests posted in the Reference Area of this web site.
If your FY2003 FCDL was dated on or before July 1, 2003 and your Service Start Date for FY2003 services is July 1, 2003, your Form 486 must be received or postmarked no later than October 29, 2003. For more information, please refer to Form 486 Deadlines posted in the Reference Area of this web site. Remember that if you received a partial funding commitment on a funding request and are appealing that reduction, you must still meet the Form 486 deadline for that funding request.
The revised Form 486 is now available online. The online version may be accessed by selecting "Apply Online" and selecting Form 486 PDF or Form 486 Interview. To use the online form, your browser must be Internet Explorer 5.5 or higher or Netscape 6.2 or higher. If you select the PDF version of the Form 486, you must have Adobe Reader 5.0 or higher. When you access the Form 486 PDF version with Adobe Reader 5.0, you may be invited to upgrade to the latest version of the Adobe Reader. This invitation is made by Adobe and not the SLD. The Form 486 PDF will work with the Adobe Reader 5.0.
When you access the online Form 486 PDF, you will first see a list of "Important Instructions for Filing Form 486 PDF Online." We urge you to read these instructions and follow them carefully. The instructions contain important information that will allow proper navigation and submission of the form.
If you have any questions please contact the Client Service Bureau.
The SLD is offering a preview of the webcast training that will be provided for applicants and service providers starting in October 2003. This preview will connect registrants to the live Beginners’ Session of the SLD’s Train-the-Trainer workshop, which introduces very basic E-rate concepts and forms from the viewpoint of applicants.
This session is limited to the first 75 participants who complete the registration form. The session will start promptly at 9:15 AM EDT on Wednesday, September 24 and last about 2½ hours. It will require both a telephone line and a computer with at least a 56K speed connection. This session will not be interactive; the telephone line provides access to the audio portion of the webcast. Participants will pay their own long-distance toll charges for the telephone connection.
This training will be offered again in a streamlined, recorded version that will be accessible without charge from the webcast site. In this version, the audio portion will be available through the registrant’s computer speakers, and a separate telephone line will not be necessary. Training on other topics will also be available.
Please click here to register for
E-RATE Program Overview for Beginners.
Beginning Monday, September 8, the SLD will apply the normal deadline for information requests. The SLD will again attempt to contact applicants who were not successfully contacted during the summer period, using the applicant's preferred mode of contact. The SLD will then complete the information request process described in the Deadline For Information Requests posted in the Reference Area of this web site.
The SLD has posted additional guidance for applicants filing Form 486 and Form 479 for Funding Year 2003. While this guidance is directed specifically to libraries, all applicants should note the following:
1. Minimum Processing Standards for Form 486 require the use of the August 2003 version of Form 486 for FY2003.
2. The online Form 486 will not be available until late September 2003. If you plan to file a Form 486 before the online version is available, you must file a paper form. The paper Form 486 and Instructions are available on the Applicant Forms page of this web site.
For more information, please refer to CIPA Guidance for Libraries for FY2003 posted in the Reference Area of this web site.
Yesterday the SLD issued letters for Wave 10 of Funding Year 2003. In past
waves for FY2003, funding commitments have been made on approved Internal Connections
requests only at the 90% discount level. Beginning with Wave 10, letters will
include funding commitments for approved Internal Connections requests at 85%
On August 19, 2003, the FCC released Public Notice DA 03-2690 [PDF format; 104kb]. In this notice, the FCC announced that the revised Form 486 and Form 479 were approved by the Office of Management and Budget on August 14, 2003. Accordingly, the effective date of the Second CIPA Order [PDF format; 724kb] is August 14, 2003.
The revised forms and instructions are available on the Forms
Page of this web site.
The FCC order (FCC 03-188) concerning library compliance with the filtering provision of the Children’s Internet Protection Act (CIPA) became effective August 14, 2003 upon the approval by OMB of the revised Form 486 and Form 479. These revised forms are slightly different from the draft forms attached to the FCC order. You can access the revised Forms and Instructions from the Forms Page of this web site.
The SLD will provide revised guidance on this web site in the next few days for libraries and consortia containing libraries. Libraries who have applied for discounts on Internet Access and/or Internal Connections for Funding Year 2003 may have additional steps to follow before the SLD can provide discounts for these FY 2003 commitments. (The requirements of CIPA do not apply to Telecommunications Services.)
Under CIPA, schools and libraries receiving discounts on Internet Access and/or Internal Connections must have an Internet safety policy that includes a technology protection measure to protect against certain visual depictions. Libraries may be undertaking actions to include the technology protection measure in FY2003, but they must be in compliance with all of the requirements of CIPA by the start of FY2004.
Following are the significant changes that will be covered in the SLD’s guidance:
For more information on the requirements of CIPA, please refer to the
Asked Questions in the Reference Area of this web site.
On January 29, 2003, the SLD announced that, effective February 28, 2003, invoices (both BEAR Forms 472 and SPI Forms 474) would not be paid unless the SLD had a Form 473, Service Provider Annual Certification Form (SPAC) on file for the appropriate funding year. While BEARs may have been processed without regard to the presence of a SPAC from the service provider, that practice would be discontinued.
A number of service providers have raised reasonable objections to the requirement
for filing a SPAC for previous funding years in order for the SLD to process
a BEAR Form submitted by an applicant. Consequently, the SLD will no longer
require that a SPAC be on file in order to process a BEAR Form featuring FRNs
for funding years prior to Funding Year 2003. SPACs are required in order to
process BEAR Forms for Funding Years 2003 and later. Also, the requirement
that a SPAC be on file in order to process a SPI Form has not changed.
On July 21, 2003, the deadline for appeals to the SLD and the FCC changed. Appeals must now be POSTMARKED, not received, no later than 60 days after the date of an SLD decision.
Letters containing language on appeals have been updated to reflect this change; please refer to the sample Funding Commitment Decision Letter and the sample Form 486 Notification Letter. In addition, the Reference Area document Appeals Procedure has been revised to provide further guidance on submitting appeals to the SLD and the FCC.
On July 11, 2003, the Schools and Libraries Committee of the USAC Board authorized the SLD to lower the threshold for funding Internal Connections for Funding Year 2003 to 85%. This authorization was effective for Wave 8 of Funding Commitments to be released on July 28. Prior to running Wave 8, the SLD determined that the threshold should not be lowered to 85%, and another Schools and Library Committee meeting was held on July 22 where the Committee directed the SLD to maintain the 90% funding threshold for Wave 8. The SLD will continue to evaluate, as additional commitment letters are issued, whether the threshold for funding Internal Connections can be lowered from 90%. The SLD will post updated information as we issue each wave.
Following is a list of the documents or pages that have changed on this web site since the last posting on updates:
The Task Force on the Prevention of Waste, Fraud and Abuse held its third meeting on June 26–27, 2003, in Arlington, Va. The Task Force discussed and revised its initial set of draft recommendations in light of comments and feedback from program stakeholders. The revised recommendations are available in the Update on Third Meeting of Task Force.
The SLD has provided additional clarification on Block 1 changes that can be made post-commitment in Contact Information Changes.
The status description for “FCDL Issued - ‘xx/xx/xxxx’” in the Form 471 Application Status Tool has been revised for accuracy. Please note that the status description is available only when search results are returned.
Today the SLD issued Funding Commitment Decision Letters (FCDLs) for Funding Year 2002 Wave 30. This will be the last regular biweekly wave for FY 2002. In Wave 30, the SLD denied funding requests for Internal Connections at the 80% level.
The SLD is still reviewing a number of properly completed Form 471 applications
which were received or postmarked within the Funding Year 2002 Form 471 application
filing window but for which an FCDL has not yet been issued because of unique
circumstances. Funds have been reserved for those applications, and FCDLs will
be issued for those applications as the SLD completes its review process. Applicants
can also check the status of their Form(s) 471 in the Apply Online section
of this web site.
“Wave Number” has been added to the Data Retrieval Tool as both an optional search criterion and a data point. You can limit your search to a single wave by entering a wave number in the optional search area, or you can include wave number in the data points that are returned from your search. Also, the order of the explanations of optional criteria in the Instructions has been changed to match the order of the fields on the Data Retrieval Tool itself.
The guidance on Corrective SPIN Changes and Operational SPIN Changes has been updated to include all of the information we need in order to process these changes. The updated information begins with Item 20 in the Corrective SPIN Changes list and Item 18 in the Operational SPIN Change list. Corrective SPIN Changes also contains more information on global SPIN changes.
The guidance on State Replacement
Contracts has been updated to include the additional information we
need to process applications that reference these contracts. The updated
information begins with Item 3
in Situation A and Item 4 in Situation B.
The Supreme Court today announced its decision with respect to the constitutionality of the Children's Internet Protection Act (CIPA) as applied to libraries. CIPA required schools and libraries receiving E-rate funds to install software to block visual depictions of obscenity or child pornography and to prevent minors from accessing pornographic material deemed to be harmful to them. In response to a suit filed by a group of libraries and others, a lower court found the blocking requirements as applied to libraries to be unconstitutional. The Supreme Court today reversed the lower court, holding the requirements to be constitutional.
USAC is awaiting guidance from the Federal Communications Commission in response to the Supreme Court decision. As we get more information on this subject, we will post it on this web site.
Today, the Schools and Libraries Committee approved fully funding FY 2003 approved Internal Connections funding requests in the 90% discount band.
Wave 5 for Funding Year 2003 will be issued next week. The SLD plans to issue Wave 6, the first wave to feature funding commitments at the 90% level, the week of June 30.
Further information on funding requests for Internal Connections below 90%
will be posted on this web site as it becomes available.
On April 30, 2003, the Federal Communications Commission (FCC) released its Second Report and Order and Further Notice of Proposed Rulemaking (FNPRM) in Docket No. 02-6, FCC 03-101. The Second Report and Order simplifies and streamlines certain aspects of the Schools and Libraries Support Mechanism. The FNPRM seeks comment on the following:
This document was published in the Federal Register, Vol. 68, No. 119 for Friday, June 20, 2003. The Second Order can be found on pages 36931–36944. The FNPRM can be found on pages 36961–36967.
Comments on the FNPRM are due on or before July 21, 2003. Reply comments are
due on or before August 19, 2003. For information on filing comments, please
refer to III. Procedural Issues, C. Comment Filing Procedures on pages 36965–36966
in the notice.
From May 20 through June 3, 2003, multiple copies of Form 472 (BEAR) Notification Letters were issued in error to certain applicants and service providers.
If an amount was authorized for payment on an FRN, the check date is the same date as the date of the first letter. However, for each FRN, the date on the most recent letter is the date used to calculate the deadline for appeals of the SLD decision.
We have corrected the error that caused this duplication, and we apologize for any confusion this error may have caused.
The SLD has determined that funds will be insufficient in Funding Year 2002 to make funding commitments on Internal Connections requests with discount percentages at 80%. (The SLD has already announced that funds were insufficient to fund Internal Connections requests below 80%.) Applicants who have Internal Connections FRNs at 80% with an “As Yet Unfunded” status will be advised that those FRNs will be “Not Funded” in the next wave of FCDLs for FY 2002.
The SLD has determined that funds will be insufficient in Funding Year 2003 to make funding commitments on Internal Connections requests with discount percentages below 70%. Such FRNs will be marked “Not Funded” in future FCDLs. There is no decision yet on whether funds will be sufficient to fully fund Internal Connections requests with discount percentages between 70% and 90%.
The determination that funds will be insufficient to fully fund all approved requests on FY 2003 Forms 471 filed within the application filing window means that there will not be funds available for Forms 471 filed after the close of the filing window. Therefore, SLD has removed the online option to file FY 2003 Forms 470 and 471. If such forms are submitted to SLD on paper, they will be returned.
The Task Force on the Prevention of Waste, Fraud and Abuse held its second meeting on May 29–30, 2003, in Kansas City, Mo. Information on the Task Force is available through the Quick Link labeled “Waste, Fraud & Abuse Task Force” on the right-hand side of this page.
The FCC Form 470 for Funding Year 2004 (07/01/2004-06/30/2005) is now available for filing. You may file this form online or download the Form 470 and Instructions from this web site.
The Form 470 is designed in a scannable format that facilitates the data entry process. There are now three different paths to completing Form 470:
An applicant who begins an application using the online interface can exit and then continue the form using the interview interface, or vice versa. Remember that you must record your Form 470 Application Number and Security Code to re-enter an incomplete form.
Applicants who have User IDs and PINs can certify their Form 470 online. If you do not have a User ID and a PIN, you may be able to request one. Please visit the PIN Request Area for more information.
The SLD section of the USAC web site has a new look and feel. It contains the same information as before, but in a format that is easier to read and more consistent across all the USAC web pages.
Below are some of the links on the redesigned site that will lead you to existing information:
In addition, time-sensitive messages formerly collected under "What's New!" now appear as "Important Notices" and "Headlines" in the center column. Important Notices are short-duration reminders such as upcoming deadlines, and Headlines cover topics of more general interest.
You can Take a Tour of the redesigned site to familiarize yourself with the new links. You may also want to visit the redesigned USAC Home Page for information about other Universal Service Support Mechanisms.
The FCC has provided additional guidance on evaluating the "exclusive use" requirement for on-premise Priority 1 equipment. (On-premise Priority 1 equipment is defined as service provider equipment located at the applicant site as a part of a Priority 1 service - Telecommunications or Internet Access - and requires compliance with a narrow set of conditions to be eligible for E-rate discounts.)
Previously, the SLD has evaluated whether the contract or lease stipulates that the applicant would have exclusive use of the facilities. Following the additional guidance, the SLD will request information based on a broader set of exclusive use possibilities beyond merely a contractual guarantee. The SLD will now seek to determine if there is any "contractual, technical, or other limitation that would prevent the service provider from using the on-premise data communications equipment in part for other customers."
In addition, the SLD has clarified and expanded the descriptions of the conditions which on-premise equipment must meet to be considered for funding as Priority 1 services.
For more information, please refer to Section 2 of On-premise Priority 1 Equipment posted in the Reference Area of this web site. For an example of the certifications required, please refer to the second page of the Item 21 Attachment example featuring on-premise Priority 1 equipment [PDF Format, 32kb] in the Item 21 Attachments for Form 471 posted in the Reference Area of this web site.
The SLD’s information request process calls for a timely response from applicants to our requests for additional or clarifying information and/or documentation about their forms. This process is described in the document Deadline for Information Requests posted in the Reference Area of this web site.
We know that most schools and some libraries close or reduce service hours during the summer months. Therefore, during the summer period from Friday, May 23, 2003 through Friday, September 5, 2003, we will enforce deadlines for receipt of information only after we make a successful two-way contact with the applicant’s contact person or other person designated by the contact person. We will attempt to make this two-way contact both by the preferred mode of contact and by telephone. If we are unable to make a successful two-way contact during this period – or if appropriate staff who can provide the necessary information are unavailable – we will send a fax to the contact person notifying them that the affected form(s) cannot be processed, and a Funding Commitment Decision Letter cannot be issued, until the additional information is received.
After September 5, the SLD will again attempt to contact applicants who were not successfully contacted during the summer period, using the applicant’s preferred mode of contact. The SLD will then complete the information request process described in the Deadline for Information Requests.
Current guidance states that program funds cannot be used for the purchase of WANs by applicants, or for arrangements that reach essentially the same result. The additional guidance provides that agreements that include an option for the applicant to purchase WAN facilities will not be funded. In addition, initial construction costs for WAN facilities built for the exclusive use of applicants are not eligible for discounts, except in those rural areas where it can be established that no acceptable alternative exists.
For more information, please refer to Section 5 of the Wide Area Network (WAN) Fact Sheet posted in the Reference Area of this web site.
The SLD selects some applicants for a Selective Review to ensure that they are following certain FCC rules. These rules require applicants to have secured access to all the resources, including computers, training, software, maintenance, and electrical connections necessary to make effective use of the services purchased as well as to pay the discounted charges for eligible services. They also ensure that applicants have complied with the FCC’s competitive bidding requirements. Applicants who are chosen for Selective Reviews are sent the E-Rate Selective Review Information Request.
As part of this request, applicants are asked to answer certain questions and provide documentation regarding their competitive bidding and vendor selection process. Applicants are also asked to provide documentation of their ability to pay their share of the cost of the E-Rate eligible products and services, and to estimate the costs of hardware, software, professional development, retrofitting, and maintenance investments that might not be E-Rate eligible, but are necessary to make effective use of the discounts.
The person authorized by the applicant to sign on the applicant’s behalf, or the entity’s authorized representative, is required to certify that the authorized signer prepared the responses to the Selective Review Information Request on behalf of the entity.
The SLD has become aware that, in some cases, service providers have provided the answers to the Selective Review Information Request. The SLD allows service providers to serve as the contact person on FCC Forms 471 because the service provider is often in the best position to answer the SLD’s questions regarding the services for which funding has been sought on the Form 471. However, it is not appropriate for service providers to provide the answers to the Selective Review Information request. In particular, the service provider selected by the applicant must not answer questions regarding the competitive bidding process, vendor selection, and the applicants’ ability to pay their share of the cost. The applicant or its authorized consultant (which cannot be the applicant’s service provider) is responsible for answering these questions. To emphasize this responsibility, the SLD requires applicants to certify that they have provided the answers to the Selective Review Information Request.
The SLD has denied and will continue to deny funding requests where there is evidence that the service provider, rather than the applicant or its authorized representative, provided the answers to these questions.
The Task Force on the Prevention of Waste, Fraud and Abuse held its first meeting on May 1–2, 2003, in Washington, D.C. A new navigation button has been created on the right-hand side of this page to provide access to information on the work of the Task Force. The list of Task Force members, with an e-mail link from each member’s name, can also be accessed by clicking on this button.
Updates on the Task Force will not be announced in separate What’s New messages, but any new information posted will be linked to this new Task Force page.
Beginning with Wave 1 of Funding Year 2003, Funding Commitment Decision Letters (FCDLs) will have two new features to assist applicants and service providers.
First , these FCDLs now feature a cover page of Important Reminders and Deadlines.
This single page lists the important concepts to keep in mind through the remainder
of the application process. This page also includes the e-mail, phone and fax
contact information for the Client Service Bureau.
Second, the first page of the FCDL now contains a summary of all Funding Requests represented in the Funding Commitment Report. This summary lists the total dollars “Approved,” “As Yet Unfunded,” “Denied” and “Under Review” that are represented by all the Funding Requests featured in the FCDL.
You can access the FY2003 Applicant FCDL from the “Letters (Sample)” listing in the Reference Area of this web site.
A new data point for “Invoicing Mode” has been added to the Data Retrieval Tool and the data point selection screen has been slightly modified. This new data point will feature the type of invoice — Form 472 (BEAR) or Form 474 (SPI) — that will be accepted by the SLD for each FRN. The possible entries for this data point are “BEAR, “SPI” and “NOT SET.” Remember that the first type of invoice — BEAR or SPI — for which payment is approved will set the invoice mode for that FRN.
The data point selection screen has been modified to accommodate this change. Invoicing information now appears in a new section designated “G. Invoicing Data.”
The list of members of the Task Force on the Prevention of Waste, Fraud and Abuse has been updated. Biographical information is now available for both the representative for Internet Service Providers and the replacement representative for Internal Connections service providers. In both cases, the e-mail links to the representatives have not changed, and any e-mails already sent using the links provided will still reach the appropriate member.
Certain Funding Commitment Decision Letters (FCDLs) for Funding Year 2002 dated April 21, 2003, and later will contain a new status descriptor for Funding Request Numbers (FRNs). This status, “Under Review,” means that information has come to our attention during the course of our Program Integrity Assurance review process that has raised concerns regarding certain aspects of this FRN. These FRNs will require additional review before commitment decisions can be made.
The SLD has created this status so that funding decisions can be issued on other FRNs featured on the same Form 471 as the FRNs that are “Under Review.” When the SLD has completed its review of the FRNs under review, it will issue decisions on those FRNs in separate FCDLs.
The Reference Area document Form 486 Deadlines has been updated to include guidance on filing Form 486 when an applicant has requested or plans to request a Service Substitution or a SPIN Change. Links to this document has been added to both Service Substitutions and SPIN Change Guidance to direct applicants to this guidance.
The sample document E-RATE SELECTIVE REVIEW INFORMATION REQUEST has been watermarked "Sample Only - Do Not Submit" so that applicants do not print this form directly from the web site for submission. Applicants required to complete this form will receive it by fax or by email, and the information fields at the top of the first page will already be populated.
Question #19 in the Reference Area document Frequently Asked Questions about Eligibility of Products and Services has been revised. In the paragraph about equipment not purchased with E-rate discounts, the phrase "fair market value" has been replaced by "fair market value or acquisition cost, whichever is lower" for clarity.
Wave 1 for Funding Year 2003 will be issued during the last week of this month. Funding Commitment Decision Letters (FCDLs) issued for this wave will contain only Priority 1 requests - that is, requests for discounts on Telecommunications Services and Internet Access. At this time we have no estimate regarding at what level we will fund Priority 2 (Internal Connections) requests.
The demand estimate that the SLD filed with the FCC and posted on this web site on April 3, 2003, showed that demand for Priority 1 was $1.745 billion - much less than the annual cap of $2.25 billion available for disbursements under the Schools and Libraries Universal Service Support Mechanism. SLD's Program Integrity Assurance review team has been focusing on applications with Priority 1 requests only, and it is those applications that will be the subject of FCDLs in the early waves for Funding Year 2003.
Applicants were urged to separate their Priority 1 and Priority 2 requests for Funding Year 2003 and enter them on different Forms 471. For Funding Year 2002, there were 5,524 applications that combined Priorities 1 and 2; that number is down to 2,196 for Funding Year 2003.
The SLD has announced the names of the members of its Task Force on the Prevention of Waste, Fraud and Abuse. The list of members, including affiliations, groups represented, and short biographies, appears in the link at the end of this message.
The Task Force will meet three times to review all aspects of the E-rate program and make recommendations on changes that could be made to help prevent waste, fraud and abuse.
Members of the Task Force will actively solicit input from their constituent groups between the first and last meetings in order to present ideas and concerns to the Task Force. The SLD has included an e-mail link to each member on the list for those who have input they would like to provide. The SLD and the Task Force members ask that input be limited to e-mail in order to facilitate communication without undue demand on members' time. Also, e-mail messages should feature the words "Task Force" at the beginning of the subject line.
A new question (#19) has been added to the Reference Area document Frequently Asked Questions about Eligibility of Products and Services. This question clarifies the conditions under which an applicant can use a credit from a trade-in of equipment toward the payment of the applicant’s non-discounted share under E-rate.
A new question (#1) has been added to the Frequently Asked Questions section of the Reference Area document Service Substitutions. This question clarifies the meaning of the phrases “consistent with the … original RFP” and “consistent with the establishing Form 470.” Also, the answer to question #2 has been rewritten for clarity.
An additional linked title, “Item 25 Certification for Form 471,” has been added to the Reference Area. This title provides another link to the Item 25 discussion in the Form 471 Reminders document. An additional link to the sample document E-RATE SELECTIVE REVIEW INFORMATION REQUEST has been added to the competitive bidding section of the Form 470 Reminders.
On April 3, 2003, the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC) reported to the Federal Communications Commission that $4.718 billion in requested funding has been estimated for schools and libraries seeking E-rate discounts for Funding Year 2003. This estimate is based on the dollars requested in 41,146 applications received or postmarked by February 6, 2003, the close of the Form 471 application filing window. There are several factors that will reduce ultimately the funds requested from the estimated level. First, while efforts have been made to eliminate duplicate requests, inevitably we will discover more duplication as we process these applications. Second, the SLD's efforts to assure that applications are substantially complete and that funds are committed only for eligible services, for use by eligible entities with the appropriate discount rate, and are otherwise consistent with program rules, will further reduce the demand.
For detailed information, please refer to the FY2003 Demand Estimate Letter to FCC [PDF document: 72kb] and the FY2003 Demand Estimate Breakdown [PDF file: 73kb].
The Schools and Libraries Division (SLD) of the Schools & Libraries (USAC) has created a Task Force on the Prevention of Waste, Fraud and Abuse. This Task Force will identify areas where improvements can be made in the support mechanism and in outreach and training and will recommend specific actions to combat potential waste, fraud and abuse by both service providers and applicants.
The Task Force will be composed of 14 members of the applicant and service provider communities. The members include representatives from public and nonpublic elementary and secondary schools, libraries, state telecommunications networks, and providers of service in all three categories of services eligible under the support mechanism — Telecommunications Services, Internet Access, and Internal Connections.
Members of the Task Force will meet to review every aspect of the E-rate program where waste, fraud and abuse can occur — including the application process, application review and funding commitment, and invoicing. They will also review publicly available documents to determine what changes could be made to help prevent waste, fraud and abuse.
The Task Force will produce a final report to USAC in early summer summarizing its recommendations.
The SLD will make Funding Year 2002 funding commitments on Internal Connections requests down to 81% beginning with Wave 26. Wave 26 Funding Commitment Decision Letters will be issued on April 7, 2003.
The SLD has been funding Internal Connections requests with discount percentages of 90% and denying such requests with discount percentages below 80%, based on estimated fundable requests and funds available for this funding year. There has been uncertainty with respect to such requests with discount percentages of 80% to 89%. Many applicants with Internal Connections requests in this range have received FCDLs with a classification of "As yet unfunded" for these FRNs. Applicants who have received such FCDLs for requests with discount percentages of from 81% to 89% will get new FCDLs in Wave 26 showing commitments for these requests.
At this time, there is no determination about the ability to fund Internal Connections requests at 80%.
Applicants can now begin a Form 486 online, exit the uncompleted form, and then return later to complete and submit the form using new “Save” and “Retrieve” functions.
You can access the online PDF version of the Form 486 from the Apply Online & View Forms page of this web site by clicking on the “Form 486 PDF” button. “Save” and “Retrieve” buttons now appear at the bottom of each page of the online Form 486. After you complete a page, you can click the “Save” button to save your work. A popup box then appears with your Form 486 Application Number and Security Code. Please make a note of these numbers, as you will need them to return to your form. This reminder box will appear each time you click “Save.”
To retrieve an incomplete online Form 486, go to the Apply Online & View Forms and do the following:
NOTE: You can retrieve a Form 486 at any time using this function, but you can only edit the form if you are filing online but have not yet clicked on the “Submit” button on the last page of the online form.
A new document, Commitment Adjustment (COMAD), has been added to the Reference Area. This documents provides useful information about adjustments the SLD must make to funding commitments when it discovers that funds were committed in error.
The sample document E-RATE SELECTIVE REVIEW INFORMATION REQUEST has been updated for Funding Year 2003. This document is used by Program Integrity Assurance as part of its Selective Review process. It can also be accessed from the Form 471 Reminders posted in the Reference Area.
The status descriptions for Forms 471 have been standardized in the 471 Display tool and the Application Status tool. Both tools can be accessed from the Apply Online & View Forms area of this web site. The descriptions have also been simplified. The date of the Receipt Acknowledgment Letter (RAL) has been removed as a status description, but this date now appears at the top of each application displayed using the 471 Display Tool.
The SLD has started issuing Receipt Acknowledgment Letters (RALs) for Funding Year 2003 applicants. Please review the information contained in the RAL carefully. Certain information in the RAL can be changed if it is incorrect, and the RAL contains instructions on how you may request these changes.
Please call the Client Service Bureau at 1-888-203-8100 if you have any questions.
The general reminders and the Form 470 and Form 471 reminders that have been displayed at the top of the SLD home page during most of the Funding Year 2003 filing window have been moved to the Reference Area of this web site. You may find them under "Forms - General Reminders," "Form 470 Reminders," and "Form 471 Reminders."
Funding Year 2002 Wave 23 FCDLs would normally be issued on Monday, February 24, 2003. However, applicants with FCDLs dated on or after March 1, 2003, qualify for an automatic extension to September 30, 2004, for delivery and installation of non-recurring services. Consequently, the SLD will issue FCDLs for Wave 23 on Monday, March 3, to qualify applicants for this automatic extension of time. FCDLs for Wave 24 are scheduled to be issued on Monday, March 10.
A new field (data point) has been added to the Data Retrieval Tool that provides the Form 470 Application Number.
The "Certified" status featured on the Form 471 Application Status tool has been subdivided for clarity. Form 471 search results will now show either "Certified - In Window" or "Certified - Out of Window." The Form 471 Application Status tool can be accessed from the Apply Online & View Forms page.
The Form 470 Receipt Notification Letter, the Form 471 Receipt Acknowledgment Letter, and the Form 486 Notification Letter under the Letters (Samples) title in the Reference Area have been replaced with the updated versions currently in use.
The Client Service Bureau (CSB) will be open on the final day of the Form 471 application filing window, Thursday, February 6 from 8:00 a.m. to 11:59 p.m. EST. However, applicants are cautioned not to wait until the last few hours of the application window to file Form 471. Applicants who wait until the last minute may not have all the necessary information to complete their Form 471 within the window, and their funding may be jeopardized.
You can reach the CSB by calling 1-888-203-8100.
The SLD has updated the Obligation to Pay Non-Discount Portion document posted in the Reference Area of this web site. This document now includes language from other sources on the web site clarifying that applicants must pay the non-discount portion of the costs of goods and services, and they must be able to show that these funds are part of their annual budget. These funds CANNOT come directly or indirectly from the service provider - as credits, equivalent good and/or services, grants, or in any other form.
This information is also featured in the Free Services Advisory posted in the Reference Area of this web site and in the Form 471 Reminders posted above.
The following materials associated with Funding Year 2003 Forms 471 must be received by 11:59 p.m. EST on February 6, 2003 or postmarked on or before February 6, 2003 in order for the request to receive consideration as inside the window. These materials are:
To check the certification status of a Form 470 cited on a Form 471, locate the Form 470 by using the "Search Posted" button under the "Form 470" heading in the Apply Online & View Forms area of this web site. The Form 470 display will show both the "Application Status" and the "Certification Received Date" at the top of the form.
Applicants are also advised to keep proof of the date of mailing. If an application is placed in a drop-off box, the postmark date may be after the drop-off date if the last pickup of the day has already occurred. For more information, please refer to Proof of Postmark or Delivery posted in the Reference Area of this web site.
A new column has been added to the BEAR/SPIN Search that features a list of all the funding years for which a service provider has a Service Provider Annual Certification (SPAC) Form 473 on file with the SLD. For more information on the consequences of a SPAC not being on file, please refer to SPACs Required for BEARs and SPIs (1/29/03).
A caption has been added to right-hand column of the FRN Extension Table. This caption notifies users that the date provided as the last date to postmark an invoice may not be correct if the date of the Form 486 Notification Letter is after the last allowable date for delivery and installation of non-recurring services featured in the previous column.
The Reference Area document "Processing of Service Requests (The "30% Rule')" has been renamed Processing of Funding Requests Containing Ineligible Products and Services (The "30% Rule"). The document has also been edited for clarity.
The Form 471 Online Navigation Guide has been updated and restored to the Reference Area.
If you are still filing your Form 471, and are filing electronically, you must have a Service Provider Identification Number (SPIN) for each Funding Request in order to progress through Block 5 of the electronic form. Filers who do not have a SPIN will receive an electronic message as they attempt to complete the form directing them to call the Client Service Bureau (CSB) for assistance.
Please note that SPIN assistance is available for those online filers who have completed the competitive bidding process, but whose service providers' SPIN assignment has not yet been completed. (Manual filers are able to provide either the service provider name or the SPIN in order to meeting Minimum Processing Standards.) Call the CSB toll-free at 1-888-203-8100, and representatives will provide you this assistance. Remember that the CSB hours of service are 8:00 a.m. to 8:00 p.m. EST.
The Schools and Libraries Division (SLD) of the Schools & Libraries (USAC) is pleased to announce that Cynthia Schultz has joined USAC as Director of Service Provider Support for SLD.
Previously, Ms. Schultz was a Senior Manager with WorldCom, Inc., where she was responsible for managing nationwide advocacy before state regulatory commissions. Prior to joining the business side of WorldCom, Ms. Schultz served as Associate Counsel for MCI Telecommunications. In that capacity, she managed and handled domestic and international disputes, arbitrations, and litigation on all aspects of telecommunications services.
Before joining MCI, Ms. Schultz was a Trial Attorney with the Civil Division, Commercial Litigation Branch, of the United States Department of Justice. She also served as a law clerk to Chief Judge Gregory Carman of the United States Court of International Trade.
Ms. Schultz succeeds Ellen Wolfhagen, who resigned from the SLD in November 2002 to accept a position as Manager of the State of Washington K-20 Network.
Ms. Schultz received her J.D. from the American University, where she served as Editor-in-Chief of the American University Journal of International Law & Policy. She received her B.A. from the George Washington University.
Invoices received by the SLD after February 28, 2003 will not be paid unless the Schools & Libraries (USAC) has a Service Provider Annual Certification Form 473 (SPAC) on file for the funding year associated with the invoice. Invoices include both the Service Provider Invoice Form 474 (SPI) and the Billed Entity Applicant Reimbursement Form 472 (BEAR). While BEARs may have been processed without regard to the presence of a SPAC from the service provider, that practice will be discontinued.
All service providers are required to submit the SPAC each funding year. Each service provider lists one or more Service Provider Identification Numbers (SPINs) on the SPAC and confirms that invoice forms submitted will be in compliance with the FCC's rules governing the schools and libraries universal service support mechanism.
Applicants who plan to file BEARs for Funding Year 2003 may want to check with the service providers they have cited or plan to cite on their Forms 471 to ensure that those service providers have filed or will file a SPAC with USAC for Funding Year 2003.
To determine if a service provider has filed a SPAC for a particular funding year, go to the BEAR/SPIN Search located in the Reference Area of this web site. You can search for the appropriate entry using the service provider name or the SPIN. The far right-hand column in the search results will list the funding years for which the SLD has a SPAC on file for a given SPIN. Applicants should review this information before filing a BEAR to verify that their service provider has filed a SPAC for the appropriate SPIN and funding year. If a SPAC has not been filed, applicants should remind their service providers to file their SPAC(s) with the SLD to prevent delays in reimbursements.
In order to assist applicants as we near the end of the Form 471 application filing window, the Client Service Bureau (CSB) will be open on Saturday, February 1 and Sunday, February 2 from 8:00 a.m. to 6:00 p.m. EST. You can reach the CSB by calling 1-888-203-8100.
If the deadline for delivery and/or installation of your non-recurring services was September 30, 2002 (regardless of Funding Year), the deadline for postmark or receipt of invoices for those services is generally January 28, 2003. Applicants filing Form 472 (BEAR Form) must allow sufficient time for their service providers to complete and return the Block 4 certification before submitting the form. Please see the Invoice Deadline Reminder (1/3/03)for more information.
Some applicants have not yet received a decision on their Funding Year 2002 funding requests for products or services. These applicants may be uncertain how to file their Funding Year 2003 requests - whether to assume that their Funding Year 2002 requests will be approved or will be denied.
For applicants in this situation, the SLD will allow multiple applications to be filed that cover both scenarios. One or more Funding Year 2003 Forms 471 may be filed that would represent an appropriate technology implementation if the Funding Year 2002 request(s) is approved, and one or more additional Forms 471 may be filed that would represent an appropriate technology implementation if the Funding Year 2002 request(s) is denied.
If applicants choose to do this, they must be sure to describe their approach in the Item 21 Attachment for each funding request. For example, an Item 21 Attachment could include the statement, "This funding request is filed assuming that a similar funding request for Funding Year 2002, FRN#12345, is approved" (or "is not approved").
SLD program rules require that the applicant have the resources available - professional development, software, funds for the non-discount portion, and so forth - for effective use of all funding requests. Applicants should provide the identification described above in order for the SLD to review their funding requests in light of this requirement.
Once applicants who have used this approach receive notification of the decision on their Funding Year 2002 requests, they should contact the SLD Client Service Bureau to determine the procedure for notifying the SLD that they wish to cancel one or more of their Funding Year 2003 requests.
The SLD recently has seen marketing claims that include "Internal Connections" as part of eligible Priority 1 services. Some of these claims appear to distort and misrepresent SLD program rules about on-premise Priority 1 equipment.
The SLD has also received a growing number of inquiries regarding whether specific configurations that include substantial equipment at the applicant site would meet the program requirements for eligible Priority 1 services.
In addition, the SLD has received evidence that service providers may be attempting to achieve literal compliance with program rules through subcontractor or partnership arrangements that violate the intent of those rules.
Components installed at the applicant site can be considered eligible Priority 1 services only under very limited circumstances. The many conditions and restrictions that govern this limited option are detailed in the document On-premise Priority 1 Equipment posted in the Reference Area of this web site.
The original FCC decision that established the requirements for on-premise Priority 1 equipment (FCC 99-216, released August 11, 1999) involved routers that were installed at applicant sites. The demarcation between the local area network and wide area network was determined to be at the local network side of the router under the narrow conditions that existed in that specific case. The SLD will carefully scrutinize funding requests that attempt to expand the terms of this decision to include much larger technology infrastructure at the applicant location. The SLD will approve only funding requests that meet SLD program rules and FCC policies.
NOTE: All parts of the on-premise Priority 1 service must be provided by the same service provider. A service provider may subcontract with other parties in order to achieve a technology installation. However, it cannot reassign a contract to a third party-the legal obligations of the applicant related to the service must be legal obligations to the single service provider. All bills of the applicant related to the service must be bills from the single service provider.
Funding requests that add extra components in order to achieve literal compliance with the conditions for on-premise Priority 1 equipment violate the important requirement that the most cost-effective service must be selected. The SLD will not approve such requests.
The Schools and Libraries Support Mechanism funds a portion, but only a portion, of the technology needs of schools and libraries. Applicants and service providers should not design and request funding for arrangements that go beyond the scope of the program intended by Congress and the FCC.
If the last date your non-recurring services could be delivered and/or installed was September 30, 2002, the deadline for postmark or receipt of invoices for those services is generally January 28, 2003. This applies to non-recurring services for Funding Request Numbers (FRNs) for ALL funding years with a September 30, 2002 delivery deadline and for which a Form 486 has been certified.
The one exception to that deadline is if the Form 486 Notification Letter was dated after September 30, 2002. In that case, the invoice deadline is the date 120 days after the date of the Form 486 Notification Letter.
If your non-recurring services were or will be delivered after the Contract Expiration Date reported on your Form 471, you must file a Form 500 to modify that Contract Expiration Date. The SLD cannot pay invoices for products and services delivered after the Contract Expiration Date on file with the SLD.
If you have not yet filed a Form 486 for your non-recurring services, please do so as soon as possible. If the Actual Service Start Date you will report on the Form 486 is after the Contract Expiration Date reported on your Form 471, you must file a Form 500 to extend that date BEFORE the SLD will be able to process your Form 486. The SLD cannot pay invoices on FRNs for which a Form 486 is not on file with the SLD. Remember that you are not required to complete a certification for Form 486 Block 4 Item 11 for FRNs from funding years prior to Funding Year 2001.
To determine the service delivery and invoicing deadlines for an FRN, please refer to the FRN Extension Table posted in the Apply Online & View Forms area of this web site.
To determine whether the SLD has a Form 486 on file for an FRN, please refer to the Funding Request Data Retrieval Tool posted in the Data Requests area of this web site. (NOTE: If there is a date entered in the "Service_Start_Date_486" field for an FRN, the SLD has a Form 486 on file for that FRN.)
Form 486, Form 486 Instructions, Form 500 and Form 500 Instructions are all available in the SL Forms section of this web site. You can also complete Form 486 online from the Apply Online & View Forms area of this web site.
Following is a list of the documents or pages that have changed on this web site during the past week:
A new document, Form 471 Interview Filing Guide has been added to the Reference Area. This document provides useful information for those interested in using the Form 471 Interview interface to file a Form 471 (see related posting below).
Two new items - Funding Request Number (FRN) and Form 471 Application Number - were added to the list of items required in order to process a request for a Corrective SPIN Change or an Operational SPIN Change.
The Form 471 Interview interface can now be used to file the Form 471 online. This interface was developed as an alternate way to file the Form 471 online for applicants with relatively simple applications. This interface guides applicants through the process of filling out the Form 471 using a series of questions. The system will only ask questions that are necessary to complete the form based on the application type and other information provided by the applicant.
The Form 471 Interview is designed for individual schools, school districts with fewer than 25 schools, individual libraries, and library systems with fewer than 25 outlets/branches. Please read the Form 471 Interview Filing Guide posted in the Reference Area of this web site for important information on using the interface. Applicants using this interface will still have to submit their Item 21 Attachment(s) separately by e-mail, fax or regular mail. However, applicants with a User ID and a PIN can certify their form(s) online at the end of the interview process.
For more information, please refer to the Form 471 Interview Filing Guide and the Form 471 Instructions. The Form 471 Interview format is available from the Apply Online/View Forms area of this web site.
Please remember that the deadline for submitting your Form 471 for Funding Year 2003 is February 6, 2003 at 11:59 PM EST, although we encourage you to submit your form as early as possible.