The Schools and Libraries Client Service Bureau will be closed on Thursday, November 25 and Friday, November 26, 2004 in observance of Thanksgiving. The Client Service Bureau will resume normal operations on Monday, November 29, 2004 at 8:00 a.m. EST.

Contractor Chosen for Expanded Outreach and Education Initiative

In an expanded outreach effort to recipients of E-rate discounted services, USAC has engaged BearingPoint, Inc. to conduct site visits, which will:

• educate applicants regarding program rules and answer questions,
• provide firsthand knowledge on how E-rate funds are being used,
• solicit suggestions on ways for USAC to improve its outreach and education efforts,
• identify “best practices” to publicize for possible use by other program participants, and
• verify the receipt and function of invoiced E-rate products and services.

BearingPoint is a global consulting firm, providing services to assist clients with their business process and technology issues; they work extensively with government, education, and technology organizations.

The site visit initiative will provide USAC with valuable information on both program compliance and outreach efforts. Under this initiative, USAC will select approximately 80 school and library sites for visits each month beginning in mid-January 2005. The selection will be based on recent invoice activity. As Bearing Point provides reports on its visits, USAC will review the information gathered and prepare and post a "Best Practices" document based on that information. USAC will also take this information into account when designing future outreach and education efforts, and will explore administrative changes to make the application process run more smoothly.

Registration Open For FINAL 2004 Service Provider Training in San Diego, California

SLD is pleased to announce that registration is now open for service provider training in San Diego, California.

Funding Year 2005 Form 471 Filing Window Established

The Schools and Libraries Committee of the USAC Board of Directors has approved a 66-day filing window for Funding Year 2005 (July 1, 2005 through June 30, 2006). The window will open at noon (EST) on Tuesday, December 14, 2004 and close at 11:59 pm (EST) on Thursday, February 17, 2005. Pursuant to the FCC's Third Report and Order (FCC 03-323), which adopted a more formal, transparent process for updating the Eligible Services List, the opening of the filing window must occur 60 days after release of the Commission public notice announcing the final list. The list was issued by the Commission on October 14, which means that the window opening date may be no earlier than December 13. Accordingly, the window opening will be delayed from the traditional early November opening. The window close date has been moved later in time to ensure an adequate filing window.

It is important to note that Forms 470 may be filed -- online or on paper -- today. There is no need to wait for the opening of the filing window to post Forms 470. While there will be a new Form 470 for Funding Year 2005, applicants posting Forms 470 may use the existing form until the new form is available. If the existing Form 470 is used, that will be all that will be required for 470 posting for 2005 -- no additional action will be necessary to meet the requirement to post for new services. New certifications on the new Form 470 will be on the new Form 471 as well, so applicants using the current Form 470 will certify to those new requirements on the new Form 471.

If applicants wait for the opening of the filing window to file the Form 470, they may have difficulty completing the procurement process and filing the Form 471 by the close of the filing window. Any applicant who would be so affected is strongly encouraged to file the Form 470 before the opening of the 471 filing window.

There will be a new Form 471 for Funding Year 2005. That new form will become available for online filing as the filing window opens. A summary of the changes to Form 471 can be found on this web site in the Form 471 Changes presentation [PowerPoint format; 162kb].

For a Form 471 to be treated as having been filed within the window, the following must occur:

• Form 471 must be completed online or postmarked if filed on paper by the close of the filing window, and
• The certification page for an online Form 471 and certification pages for any Forms 470 filed online and cited on the Form 471 must be completed online via e-certification or postmarked by the close of the filing window.

As always, we encourage applicants to file Forms 471 and the 471 and 470 certifications as early in the filing window as possible and to submit the Item 21 attachments as soon after filing the Form 471 as possible. With a later filing window close, USAC will have less time than it has in prior years to review applications before the start of the funding year. When we receive all of an applicant's applications along with the Item 21 attachments, they will go into Program Integrity Assurance review. Applications filed early in the window can generally be expected to be ready earlier than later-filed applications for Funding Commitment Decision Letters.

We also encourage applicants to separate their Priority 1 requests (telecommunications services and Internet access) from their Priority 2 requests (internal connections other than basic maintenance, and basic maintenance of internal connections) and file them on separate Forms 471.

There are some important changes in the E-rate program for Funding Year 2005 (including the Form 471 changes mentioned above). An easy way to become familiar with these changes is to review the training presentations for Funding Year 2005 on the Training Presentations page of this web site or to view recorded WebEx training sessions on the same topics on our branded WebEx site.

USAC to Resume Issuing Funding Commitment Decision Letters

In early August, USAC suspended issuance of Funding Commitment Decision Letters (FCDLs) for both schools and libraries and rural health care providers for all funding years. USAC has worked closely with the FCC since then and has now determined the amount of unobligated cash it has available to cover new commitments and will resume issuing new FCDLs within the next two weeks.

2005 Eligible Services List Now Available

The Eligible Services List to be used for Fund Year 2005 is now available. Go to the Eligible Services List.

FCC Registration Numbers (FCC RNs) (posted 10/21/04, revised 10/29/04)

The Fifth Report and Order (FCC 04-190, released August 13, 2004) states that all participants in the E-Rate program must obtain an FCC Registration Number (FCC RN). Participants are required to obtain at least one FCC RN for each Taxpayer Identification Number by November 1, 2004, pursuant to Public Notice DA 04-2994 (released September 16, 2004) and Public Notice FCC 04-230 (released September 28, 2004).

FCC RNs are required for entities that do business with the Federal Communications Commission (FCC). Therefore, if your entity already has an FCC license (for example, for ITFS or a radio station), you may already have an FCC RN. If you already have an FCC RN, you do not need to get a new one simply for the purposes of E-rate.

We anticipate that we will be able to provide a procedure to assist applicants in obtaining FCC RNs corresponding to individual Entity Numbers by the opening of the Form 471 application filing window. However, this does not relieve your obligation to obtain at least one FCC RN by November 1. For now, please be aware that, although Form 470 and Form 471 for Funding Year 2005 do not have fields for FCC RNs, you will be asked to provide FCC RNs for all Billed Entities and recipients of service during PIA review.

Who Should Obtain an FCC RN

The following entities participating in the E-rate program must have FCC RNs:

• Schools – includes individual schools, school districts, ESAs, and school administrative (non-instructional) facilities
• Libraries – includes library outlets/branches, library systems and library administrative (non-instructional) facilities
• Consortium Leaders and Consortium Members
• Service Providers
• Consultants
• Entities that file Forms 470 and/or Forms 471 that do not appear above

NOTE: Although an entity may have only one Taxpayer Identification Number (see below), that entity may have to obtain more than one FCC RN. While we encourage entities to obtain all of the FCC RNs that they need on their own, the law requires that they obtain at least one FCC RN by November 1, 2004.

Taxpayer Identification Number (TIN) / Employer Identification Number (EIN)

A Taxpayer Identification Number (TIN) is a nine-digit number that the Internal Revenue Service (IRS) requires of all individuals, businesses, and other employers to identify their tax accounts with the IRS.

• For an individual, the TIN is the person’s Social Security Number.
• For employers, including state and local government agencies and non-profit organizations, the TIN is the IRS-issued Employer Identification Number (EIN).

1. Each FCC RN must have a TIN/EIN associated with it.
2. If your TIN/EIN is already associated with an FCC RN and the name on the FCC RN is not correct, call the FCC Registration Number Helpline at 1-877-480-3201.

How to Obtain an FCC RN

You can apply online for an FCC RN from the FCC web site.

• Follow the link to the “FCC Registration Number Commission Registration System (CORES)” on the left hand side of the screen.
• Follow the link to “Register” under “Register and Receive your FRN.”

We strongly encourage you to apply online. However, you can also file a paper copy of the CORES Registration Form. This form can also be faxed to you by contacting the FCC Registration Number Helpline at 1-877-480-3201. The instructions to the Form 160 include directions for filing. Should you have any further questions about filing on paper, contact the FCC Registration Number Helpline.

Helpful Tips for Applying for an FCC RN

Because the CORES system is used in conjunction with many different FCC programs, the information requested in the application process may not closely match that of the entities that participate in the E-rate program. NOTE: We do not use the type and subtype information you provide in this application for our review of funding requests.

1. Business Type and Subtype

• For Public Schools and Public Libraries – select “State or Local Agency”
  • For Subtype – select the option that is most appropriate
  • If you are not sure which option applies, select “State or Local Commission”
• For Non-Public (Private) Entities – select “Private Sector”
  • For Subtype – select the option that is most appropriate
• For Consultants – select “Private Sector”
  • For Subtype – select the option that is most appropriate

2. Business Name

• Name of the individual entity
  • For an entity with an Entity Number, this should be the name of the individual school, school district, library outlet/branch, library system, consortium leader or non-instructional facility associated with the Entity Number.
  • For a Billed Entity, this should be the name of the Billed Entity associated with the Billed Entity Number.
  • For service providers, this should be the name of the entity associated with the Service Provider Identification Number (SPIN).
  • For all others, this should be the business name of the entity.

3. Organization Name

• If the “Business Name” entered above is for the entity responsible for the E-rate application process, re-enter the “Business Name” for the “Organization Name.”
• If the “Business Name” entered above is for an individual recipient of service that is NOT the entity responsible for the E-rate application process, enter the name of the entity responsible for the E-rate application process for the “Organization Name.” Most likely, the “Organization Name” will be the name of the Billed Entity.

4. Contact Person

• Enter the name of the person at the entity that is responsible for the E-rate application process.

If you need more information, please contact one of the following:

• FCC Registration Number Helpline at 1-877-480-3201
• SLD Client Service Bureau at 1-888-203-8100.

Registration Open For 2004 Service Provider Training in Providence, Rhode Island

SLD is pleased to announce that registration for service provider training in Providence, Rhode Island is now open for registration. Click the following link for more information, 2004 SP Training. This link can also be found under the Training and Outreach bar on SLD's home page. Please note that SLD will be providing training in Providence instead of Chicago.

Service providers will be required to pre-register and guarantee payment in advance. The Training Agenda and Presentations and Draft Forms for the training sessions are available on the 2004 Service Provider Training page. Attendees should print out hard copies of the training materials, because no hard copies will be provided at the workshops. Please submit your inquiries with respect to the SP training only by clicking here.

Priorities for Making Funding Commitments if Unobligated Cash is Insufficient to Issue All Pending Commitments

The Federal Communications Commission (FCC) began treating funding commitment decision letters (FCDLs) issued for the Universal Service Schools and Libraries and Rural Health Care Support Mechanisms as budgetary obligations on September 30, 2004. At that time, the Universal Service Administrative Company (USAC) began tracking the amount of unobligated Universal Service Fund (USF) monies on hand to support new funding commitments. USAC expects that, going forward, at various times, it may have less unobligated cash than the total dollar value of new commitments ready to be issued. View full article

Three Audit Documents Posted to Reference Area

Three documents related to audits have been posted to the Reference Area of this web site. These documents contain information gleaned from beneficiary audits conducted under the Schools and Libraries Support Mechanism.

Beneficiary Audits - Auditors’ Observations replaces the document Beneficiary Audits - Preliminary Auditors’ Observations. This document lists the observations made by auditors during the audits for Funding Year 2000.

Audits of Beneficiaries Fact Sheet is an updated version of an existing document. This document provides a short description of the audit process and provides a list of documents auditors will request as part of an audit.

Best Practices is a new document that provides information on best practices. These practices, if followed, will assist applicants and service providers to comply with program rules.

Two October Deadlines for Certain Applicants

Two important deadlines are approaching for certain Funding Year 2004 and Funding Year 2003 applicants.

The deadline for postmarking invoices (Form 472 BEAR Forms and Form 474 SPI Forms) for FY2003 recurring services is October 28, 2004. For more information, please refer to Invoicing Deadlines and Extension Requests posted in the Reference Area of this web site.

If your FY2004 FCDL was dated on or before July 1, 2004 and your Service Start Date for FY2004 services is July 1, 2004, your Form 486 must be received or postmarked no later than October 29, 2004. 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.

WebEx Recordings of SLD Presentations made at the 2004 Annual SLD Train the Trainer Workshop Will Be Available October 15, 2004

Key SLD topics covered by SLD staff at the 2004 SLD TTT Workshop have been recorded and will be available October 15, 2004. Recorded sessions will be posted on the SLD’s WebEx site. Please follow the link to Recorded Sessions. If you need more information on WebEx recordings, you can access the SLD’s WebEx Recordings page by following the WebEx Recording link under the Training and Outreach bar on the left side of SLD’s website.

Please submit any questions regarding WebEx training and/or the recordings via e-mail.

Registration for WebEx Training Sessions Opens on October 15

A series of live E-rate training sessions will be offered via WebEx to service providers, applicants and consultants. The sessions will begin on October 20, 2004 and run through the first week of February 2005. Each session will be offered several times so participants can choose a time that best fits their schedules.

The topics covered in the training sessions will be the same as those offered during the Train-the-Trainer workshop held on September 27–29, 2004. To review those presentations, you can visit the “Train-the-Trainer” Presentations 2004 page in the Reference Area of this web site.

If you would like to attend a live training session, please note the following:

1. In order to register for a live session, you must first have reviewed the associated recorded session. Recorded sessions will be posted on the SLD’s WebEx site by October 14, 2004. If you need more information on WebEx recordings, you can access the SLD’s WebEx Recordings page by following the WebEx Recordings link under the Training and Outreach bar on this web site.
2. Registration for each session will be limited to 98 participants. The SLD reserves the right to limit the number of participants to one participant per individual company per session.
3. WebEx will provide an e-mail notification to each successful registrant chosen to participate. If you do not receive an e-mail from WebEx with the session number and password, you have not been chosen to participate for that session.
4. You will be asked to provide an identification number as part of the registration process. Please respond according to the following guidance:
   • Service providers - enter your SPIN in the SPIN field
   • Consultants who primarily serve service providers - enter 143000000 in the SPIN field
   • Applicants - enter your BEN in the BEN field
   • Consultants who primarily serve applicants - enter 999999 in the BEN field
   • All others - enter 000000 in the BEN field.

All required fields in the registration form must be properly completed before the SLD can make a decision on your request to participate in a session.
If you have any questions, please submit them by e-mail.

NOTICE REGARDING TEMPORARY SUSPENSION OF SCHOOLS AND LIBRARIES AND RURAL HEALTH CARE SUPPORT MECHANISM FUNDING COMMITMENTS

The Federal Communications Commission (FCC) directed the Universal Service Administrative Company (USAC), the administrator of the Schools and Libraries (E-rate) and Rural Health Care Universal Service Support Mechanisms, to change USAC’s accounting methodology by October 1, 2004 to the same methodology that the Federal Government uses. Among other things, we were informed that this required USAC to change the rules that we use to account for various financial transactions, including funding commitments in those programs. The accounting changes were not intended to have any impact on the way in which we administer the programs themselves. View full article

Register For 2004 Service Provider Training Workshops

SLD is pleased to announce that it will be providing a series of three 2-day live training sessions for service providers. Click the following link for more information, 2004 SP Training. This link can also be found under the Training and Outreach bar on SLD's home page.

Service providers will be required to pre-register and guarantee payment in advance. The Training Agenda and Presentations for the training sessions will be available in advance of the sessions on the 2004 Service Provider Training page. Attendees should print out hard copies of the training materials, because no hard copies will be provided at the workshops. Please submit your inquiries with respect to the SP training only by clicking here.

Draft Forms and Presentations from Train-the-Trainer Workshop Available

The SLD held a Train-the-Trainer workshop on September 27–29, 2004, in Arlington, Virginia. The presentations from this workshop have been posted to the "Train-the-Trainer" 2004 Workshop Presentations page in the Reference Area of this web site.

Drafts of applicant program forms were distributed at this workshop for reference purposes, and copies of those draft forms can also be accessed from this page. The Draft Form 470 and Draft Form 471 are the final drafts submitted for approval to the Office of Management and Budget; all other draft forms on this page are preliminary drafts that have been modified only by additions or changes to certifications that were mandated by the FCC’s Fifth Report and Order.

Enhancements Released for the Eligible Products Database

Applicants and members of the public can now view the SLD’s pilot Eligible Products Database.

The Database consists of products that participating manufacturers have indicated are E-rate eligible as Internal Connections.

The initial public interface provides a browse and search function to find specific product types (such as “router”) and to view products from specific manufacturers. Additional functionality is currently under development.

Twenty-five manufacturers are participating in the pilot program. Enrollment is now open for additional national manufacturers of E-rate-eligible internal connections products.

Go to further information.

Fifth Report and Order Published in Federal Register

On September 13, 2004, the FCC’s Fifth Report and Order (FCC 04-190) [PDF, 352kb] was published in the Federal Register. This order adopts measures to protect against waste, fraud and abuse. was published in the Federal Register. This order adopts measures to protect against waste, fraud and abuse. A summary of the order appears below.

The Fifth Report and Order was published in the Federal Register, Vol. 69, No. 176, on pages 55097-55111. The effective date of the Fifth Report and Order is October 13, 2004, except for §§ 1.8003, 54.504(b)(2), 54.504(c)(1), 54.504(f), 54.508, and 54.516 which contain information collection requirements that have not been approved by the Office of Management and Budget. The FCC will publish a document in the Federal Register announcing the effective date for those sections.

Following are direct quotes from the Order on these measures:

Framework for recovery of funds. .[F]unds disbursed in violation of the statute or a rule that implements the statute or a substantive program goal must be recovered. (para. 18) On the other hand, . recovery may not be appropriate for violation of all rules regardless of the reason for their codification. (para. 19)

Amounts disbursed in violation of the statute or a rule that implements the statute or a substantive program goal must be recovered in full. In situations where disbursement of funds is warranted under the statute and rules, but an erroneous amount has been disbursed, the amount of funds that should be recovered is the difference between what the beneficiary is legitimately allowed under our rules and the total amount of funds disbursed to the beneficiary or service provider. [The FCC] set forth below a number of examples to illustrate the applications of this principle. (para. 20)

While [the FCC has] not, to date, enunciated a bright line standard for determining whether a particular funding request or activities related to it depart from this standard to a degree that constitutes waste, fraud or abuse, [the FCC] emphasize[s] that [the FCC], and USAC in the first instance, retain the discretion to make such determinations on a case-by-case basis in the course of examining specific factual circumstances. . [I]n specific cases where there is evidence of fraudulent conduct, it would be appropriate to refer such matters to law enforcement officials. (para. 30)

Administrative limitations period for audits or other investigations. . [The FCC] will initiate and complete any inquiries to determine whether or not statutory or rule violations exist within a five year period after final delivery of service for a specific funding year. . USAC and the [FCC] shall carry out any audit or investigation that may lead to discovery of any violation of the statute or a rule within five years of the final delivery of service for a specific funding year. (para. 32)

Recovery for de minimis amounts. . [I]t does not serve the public interest to seek to recover funds associated with statutory or rule violations when the administrative costs of seeking recovery outweigh the dollars subject to recovery. Accordingly, [the FCC] direct[s] USAC not to seek recovery of such de minimis amounts. [The FCC] direct[s] USAC to provide the Wireline Competition Bureau and the Office of Managing Director sufficient information regarding the administrative costs of seeking recovery of improperly disbursed funds so that a de minimis amount can be determined. (para. 35)

Pattern of rule violations. . USAC should subject any school or library that exhibits systematic noncompliance with governing FCC rules to more rigorous scrutiny in the subsequent funding years. [The FCC] direct[s] USAC to implement this practice and to refer such situations to the [Wireline Competition] Bureau, as appropriate, for further consideration. (para. 36)

Offset options and booking of recovery amounts. . [The FCC] eliminate[s] the offset options adopted in the Commitment Adjustment Implementation Order from the fund recovery plan. (para. 38)

. [R]ecovery amounts should be recorded in the accounting records for the Universal Service Fund consistent with Federal Generally Accepted Accounting Principles (GAAP). (para. 39)

Treatment of applicants subject to recovery. Earlier this year . [the FCC] adopted a rule . providing that the [FCC] shall withhold action on any application or request for benefits made by an entity that is delinquent in its non-tax debts owed to the [FCC], and shall dismiss such applications or requests if the delinquent debt is not resolved . (. the "red light" rule) (para. 41) ... [The FCC] amend[s its] rules to bring all E-rate beneficiaries and service providers within the ambit of the red light rule. [The FCC] require[s] all entities that participate in the schools and libraries universal service support mechanism to obtain an FCC Registration Number. This rule change shall go into effect pursuant to the DCIA Order, and shall apply to all applications and recovery actions pending at that time. Thereafter, USAC shall dismiss any outstanding requests for funding commitments if a school or library, or service provider, as applicable, has not paid the outstanding debt, or made otherwise satisfactory arrangements, within 30 days of the date of the notice provided for in [the FCC's] commitment adjustment procedures. In this regard, [the FCC] expressly recognize[s] that a school or library's ability to pay outstanding debts may be dependent on action by state or local officials on budgetary requests, and the timing of such budgetary action may be considered in determining satisfactory repayment options. (para. 42)

Applications will not be dismissed pursuant to [the FCC's] red light rule if the applicant has timely filed a challenge through administrative appeal or a contested judicial proceeding to either the existence or amount of the debt owed to the [FCC]. [The FCC's] recent DCIA Order expressly notes that appeals made to USAC shall be deemed administrative appeals. (para. 43)

Moreover, even if outstanding debts to the universal service fund have been repaid, [the FCC] think[s] it appropriate to subject subsequent applications from beneficiaries that have been found to have violated the statute or rules in the past to greater review. . Such heightened scrutiny could entail, for instance, requiring additional documentary evidence to demonstrate current compliance with all applicable requirements, or submission of a corrective plan of action to address past errors. It may also include site visits or other investigatory activities. Such heightened scrutiny could continue as long as necessary. [The FCC] envision[s], however, that in most instances, such heightened scrutiny would no longer be necessary in subsequent years, after USAC determines that a pending application is compliant with the statute and [FCC] requirements. (para. 44)

Document retention requirements. [The FCC] require[s] both applicants and service providers to retain all records related to the application for, receipt and delivery of discounted services for a period of five years after the last day of service delivered for a particular Funding Year. This rule change shall go into effect when this order becomes effective and, as such, will apply to Funding Year 2004 and thereafter. (para.47)

. [The FCC] provide[s] for illustrative purposes the following description of documents that service providers and program beneficiaries must retain pursuant to this recordkeeping requirement, as applicable:

.[T]he rule . requires that program participants retain all documents necessary to demonstrate compliance with the statute and [FCC] rules regarding the application for, receipt, and delivery of services receiving schools and libraries discounts. Thus, the descriptive list above is provided as a guideline but cannot be considered exhaustive. (para. 49)

. [S]chools, libraries, and service providers remain subject to both random audits and to other audits (or investigations) to examine an entity's compliance with the statute and the [FCC's] rules initiated at the discretion of the [FCC], USAC, or another authorized governmental oversight body. . [F]ailing to comply with an authorized audit or other investigation conducted pursuant to section 54.516 of the [FCC's] rules (e.g., failing to retain records or failing to make available required documentation) is a rule violation that may warrant recovery of universal service support monies that were previously disbursed for the time period for which such information is being sought. (para. 50)

Technology plans. . [A]pplicants with technology plans that have not yet been approved when they file FCC Form 470 must certify that they understand their technology plans must be approved prior to the commencement of service. . [A]pplicants still are expected to develop a technology plan prior to requesting bids on services in FCC Form 470; all that [the FCC is] deferring is the timing of the approval of such plan by the state or other approved certifying body. Second, [the FCC amends its] rules to require that applicants formally certify, in FCC Form 486, that the technology plans on which they based their purchases were approved before they began to receive service. (para. 56)

[The FCC] hereby grant[s] a waiver of section 54.504(b)(2)(vii) of [its] rules to all applicants that failed to have a technology plan approved at the time they filed their FCC Form 470 or that had obtained approval of a technology plan that covered only part of the funding year, but that obtained approval of a plan that covered the entire funding year before the commencement of service in the relevant funding year. . [H]owever, . this limited waiver does not extend to instances where the applicant failed to obtain an approval of a technology plan at all. (para. 57)

. [T]echnology plans should continue to focus on ensuring that technologies are used effectively to achieve educational goals rather than assuming a greater role in monitoring the procurement process. . [T]he technology plan should focus on "research and planning for technology needs " rather than act as preliminary RFPs. (para.58)

[The FCC] agree[s] . that the [FCC's] technology plan requirements should be harmonized with the technology planning goals and requirements of the U.S. Department of Education and the U.S. Institute for Museum and Library Services. In fact, USAC has already been treating technology plans approved under the Department of Education's Enhancing Education Through Technology (EETT) as acceptable technology plans subject to one qualification. Consistent with the [FCC] requirement that program applicants demonstrate that they have the necessary resources required to utilize [E]-rate discounts, USAC has required that the EETT technology plans be supplemented by an analysis that indicates that the applicant is aware of and will be able to secure the financial resources it will need to achieve its technology aims, including technology training, software, and other elements outside the coverage of the [FCC's] support program. . [The FCC] adopt[s] a rule that codifies this method of compliance with the technology plan requirement. (para. 59)

. [T]he ability of an entity whose technology plan complies with the criteria in the preceding paragraphs to order services is only limited by the scope of its technology plan's strategy for using telecommunications services and information technology to meet its educational goals. . [A]pplicants are free to switch from wireline to wireless technologies, from high to even higher speed transmission speeds, and to make other similar changes in the services they order as long as those services are designed to deliver the educational applications they have prepared to provide. Onlyif an applicant desires to order services beyond the scope of its existing technology plan does it need to prepare and seek timely approval of an appropriately revised technology plan. (para. 61)

. [T]o address non-public schools that are not eligible to secure approval of their technology plan from their states . USAC has been . permitting such schools to obtain approval of their plans from entities that USAC has certified as qualified to provide such evaluations and approval. [The FCC] amend[s its] rules to codify this practice. (para. 63)

Certifications - Form 470. [The FCC] revise[s] the current language of section 54.504(b)(2)(v) to require applicants to certify that support under the support mechanism is conditional. [The FCC] replace[s] the current language of section 54.504(b)(2)(v) with the following sentence: "Support under this support mechanism is conditional upon the school(s) and library(ies) securing access to all of the resources, including computers, training, software, maintenance, internal connections, and electrical connections necessary to use the services purchased effectively." (para. 66)

[The FCC] will require applicants to certify on the Form 470 that the services for which bids are being sought are the most cost effective means for meeting their educational needs and technology plan goals. Therefore, [the FCC] modif[ies] section 54.504(b)(2) to add a new certification, section 54.504(b)(2)(vii), which states the following: "All bids submitted will be carefully considered and the bid selected will be for the most cost-effective service or equipment offering, with price being the primary factor, and will be the most cost-effective means of meeting educational needs and technology plan goals." (para. 67)

Certifications - Form 471. [The FCC] amend[s] section 54.504(c) of the [FCC's] rules by adding a new subsection (1) which will state that the FCC Form 471 shall be signed by the person authorized to order telecommunications and other supported services for the eligible school, library, or consortium and shall include that person's certification that the entity(ies) is/are eligible to receive support and has/have secured access to all of the resources necessary to make effective use of the service purchased; the entity(ies) is/are covered by technology plans that have been or will be approved by a state or other authorized body; the entity(ies) has/have complied with program rules as well as all state and local laws regarding procurement of services; the services will be used solely for educational purposes and will not be sold, resold, or transferred; the applicant understands that the discount level used for shared services is conditional; and the applicant recognizes that its application may be audited. (para. 68)

... [The FCC] will require applicants to certify on the Form 471 that the selection of services and service providers is based on the most cost effective means of meeting educational needs and technology plan goals. Therefore, [the FCC] modif[ies] section 54.504(c)(1) to add a new certification, section 54.504(c)(1)(xi), which states the following: "All bids submitted were carefully considered and the most cost-effective bid for services or equipment was selected, with price being the primary factor considered, and is the most cost-effective means of meeting educational needs and technology plan goals." (para. 69)

Certifications - Form 473. Service providers receiving funds through the E-rate program accordingly now must make the following certifications with respect to their participation in the competitive bidding process of the E-rate program in the Service Provider Annual Certification Form, FCC Form 473:

Resolving audit findings. As modified above, USAC shall continue to recover funds whenever it discovers a statutory or rule violation, as described above. The standard for determining such a violation is the same standard that [the FCC] use[s] in [FCC] enforcement actions: specifically, whether a party has willfully or repeatedly failed to comply with any provision of the Act or any rule, regulation, or order issued by the [FCC], based on a preponderance of the evidence. (para. 73)

. [The FCC] direct[s] USAC to submit, no later than 45 days from the publication in the Federal Register, a proposed plan for resolving audit findings. USAC's audit resolution plan should detail USAC's proposed procedures for resolving all findings arising from audits conducted by USAC's internal audit department, independent public accounting firms under contract with USAC, or government audit organizations. In addition, USAC's audit resolution plan should specify deadlines to ensure audit findings are resolved in a timely manner. (para. 74)

[The FCC has] set forth . a general framework for what amounts should be recovered in specific situations, and [the FCC] expect[s] future audits to be resolved consistent with that framework. To the extent audits in the future raise issues not addressed herein, [the FCC] provide[s] a limited delegation to the Wireline Competition Bureau to address such matters. (para. 75)

USAC shall maintain records of the status of all audit reports and any recommendations made therein, and make such records available to the [FCC] upon request. USAC also shall submit a report to the [FCC] on a semi-annual basis summarizing the status of all outstanding audit findings. To the extent findings cannot be resolved within six months, USAC shall describe the status of its efforts, and provide a projected timeframe for completion. . USAC's determination concerning the resolution of audit findings does not limit the Enforcement Bureau's ability to take enforcement action for any statutory or rule violation pursuant to section 503 of the Act. (para. 77)

. [A] number of audit reports have contained findings that indicate noncompliance with USAC administrative procedures. Consistent with its obligation to administer this support mechanism without waste, fraud and abuse, [the FCC] expect[s] USAC to identify for [FCC] consideration on at least an annual basis all findings raising management concerns that are not addressed by the [FCC's] existing rules and precedent, and, as appropriate, identify any USAC administrative procedures that should be codified in [FCC] rules to facilitate program oversight. (para. 78)

[The FCC] direct[s] USAC to submit to the [FCC] within 45 days from publication in the Federal Register, and annually thereafter, a list summarizing all current USAC administrative procedures identifying, where appropriate, the specific rules or statutory requirements that such procedures further, and those procedures that serve to protect against waste, fraud and abuse. [The FCC] shall review those procedures to determine whether action is needed to ensure appropriate recovery, and shall determine whether such procedures should be adopted as binding rules. Thereafter, USAC and the [FCC] will generally seek recovery of funds disbursed in violation of the statute or a rule that implements the statute or substantive program goal or that serves to protect against waste, fraud and abuse. USAC and the [FCC] will not seek recovery of funds disbursed in violation of other rules, except to the extent that such rules are important to ensuring the financial integrity of the program, as designated by the agency. (para.80)

Registration to Open on September 13, 2004 for Service Providers to Access the Annual SLD TTT Workshop online using WebEx

Service Providers and Consultants for Service Providers will be able to attend via WebEx the annual SLD TTT Workshop that will be held on September 27-29, 2004. Registration will be available after 3:00p.m. on September 13, 2004 at universalservice.webex.com. Registration will be limited to 98 participants and SLD may need to limit the number of participants per company based upon interest and number of registrations received. Registration will close after the limit has been reached for each session. WebEx will provide notification via e-mail to those registrants accepted to participate in the TTT workshop. For consultants who represent service providers, please use the following SPIN Number 143000000. Please note that all fields must be properly filled out before SLD can review a request to participate. If you have any questions, please send an e-mail to sldwebextraining.

Holiday Hours Announcement

The Schools and Libraries Client Service Bureau will be closed on Monday, September 6, 2004 in observance of Labor Day. The Client Service Bureau will resume normal operations on Tuesday, September 7, 2004 at 8:00 a.m. EDT.

SLD TEMPORARILY SUSPENDS ISSUANCE OF FUNDING COMMITMENT DECISION LETTERS

USAC has been directed by the FCC to move to government accounting standards by October 1, 2004, and this has raised potential budget authority issues that may impact USAC. As a result, SLD has not issued FCDLs for any Funding Year since August 3, 2004, and will be temporarily suspending further issuance of such letters. USAC is working with the FCC to resolve these issues and, once that happens, SLD will resume issuing commitment letters. In the meantime, SLD is continuing to review applications so that, when the matter is resolved, we will be in a position to issue FCDLs. USAC expects the issue to be resolved in the near future.

FCC Issues Public Notice on Eligible Services List

On August 13, 2004, the Federal Communications Commission (FCC) released a Public Notice (FCC 04-200) establishing the comment period for the Funding Year 2005 Eligible Services List.

Comments on the draft Eligible Services List, which is attached to the Public Notice, are due to the FCC on or before August 23, 2004. Reply comments are due to the FCC on or before August 30, 2004. For information on filing comments with the FCC, please refer to the Public Notice.

This proceeding is limited to determining what specific services are eligible under the FCC’s current rules; it is not intended to be a vehicle for changing any eligibility rules.

Earlier Versions of Forms 472 and 474 Reposted

Forms 472, 473 and 474 will be undergoing a revision process during the next several months. In order to minimize confusion that might result from changing form versions twice in a short period of time, we are taking down the Form 472 dated February 2004 and the Form 474 dated January 2004.

Until the form revision process is complete, please continue to use the versions of Forms 472, 473 and 474 currently posted on the Forms Page of this web site.

FCC Releases Fourth Report and Order

On July 30, 2004, the FCC released its Order on Reconsideration and Fourth Report and Order (FCC 04-181) that addresses several issues related to recovery of funds disbursed in violation of program rules. This order will become effective thirty (30) days after publication in the Federal Register.

Following are direct quotes from the Order addressing these issues:

Direction of recovery actions. …[R]ecovery actions should be directed to the party or parties that committed the rule or statutory violation in question. …[I]n many instances, this will likely be the school or library, rather than the service provider. …This revised recovery approach shall apply on a going forward basis to all matters for which USAC has not yet issued a demand letter as of the effective date of this order, and to all recovery actions currently under appeal to either USAC or [the FCC]. [The FCC] do[es] not intend to modify any recovery action in which the service provider has satisfied the outstanding obligation or for which USAC has already issued an initial demand letter. (para. 10)

[The FCC] direct[s] USAC to make the determination … to whom recovery should be directed in individual cases. In determining to which party recovery should be directed, USAC shall consider which party was in a better position to prevent the statutory or rule violation, and which party committed the act or omission that forms the basis for the statutory or rule violation. For instance, the school or library is likely to be the entity that commits an act or omission that violates [the FCC’s] competitive bidding requirements, [the FCC’s] requirement to have necessary resources to make use of the supported services, the obligation to calculate properly the discount rate, and the obligation to pay the appropriate nondiscounted share. On the other hand, the service provider is likely to be the entity that fails to deliver supported services within the relevant funding year, fails to properly bill for supported services, or delivers services that were not approved for funding under the governing FCC Form 471. [The FCC] recognize[s] that in some instances, both the beneficiary and the service provider may share responsibility for a statutory or rule violation. In such situations, USAC may initiate recovery action against both parties, and shall pursue such claims until the amount is satisfied by one of the parties. Pursuant to section 54.719(c) of the [FCC]’s rules, any person aggrieved by the action taken by a division of the Administrator may seek review from the [FCC]. (para.15)

Enforcement action. Any recipient of the demand letter is obligated to repay the recovery amount by the deadlines described in the Commitment Adjustment Implementation Order [(FCC 00-350, released October 26, 2000)]. Failure to do so may subject such recipients to enforcement action by the [FCC] in addition to any collection action. (para.16)

Good Samaritans. …Good Samaritans should not be subject to recovery actions except in those situations where the Good Samaritan itself has committed the act or omission that violates [the FCC’s] rules or the governing statute. (para.17)

Revised Forms 472 and 474 Available

The revised Forms 472 and 474 are now available on the Forms Page of this web site. Form 472 can only be filed on paper; Form 474 can be filed either online or on paper.

The SLD will continue to accept the October 1998 version of Form 472 and the October 2001 version of Form 474 filed on paper through December 31, 2004. However, processing of these earlier forms will be delayed until the certification pages from the current forms have been correctly submitted and successfully data entered. Earlier versions of these forms postmarked after December 31, 2004 will be returned.

FY2005 Option Added for Online Filers of Form 470

The SLD has added an option for Funding Year 2005 for online filing of Forms 470 from the Apply Online area of the web site. This means that applicants can now file a Form 470 for FY2005 online or on paper using the current form without putting additional language in Item 13 identifying the funding year.

Applicants beginning a Form 470 with the online or the interview format should choose the Funding Year 2005 option from the drop-down menu. Applicants filing on paper should use the May 2003 version of the Form 470 and enter the appropriate dates for Funding Year 2005 in Block 1, Item 2.

There will be a revised Form 470 to use for FY2005, but that form is currently in development and may not be ready for several months. A notice will be posted to this web site when the new Form 470 is available, until the notice is posted, applicants may use the current form.

Service providers are reminded that they can search for FY2005 Forms 470 using the Search Posted tool in the Apply Online area of the web site. However, some Forms 470 may have been filed under FY2004 using guidance previously posted to this web site. Service providers can search those forms by date posted and review the results to find additional Forms 470 posted for FY2005.

Holiday Hours Announcement

The Schools and Libraries Client Service Bureau will be closed on Monday, July 5, 2004 in observance of Independence Day. The Client Service Bureau will resume normal operations on Tuesday, July 6, 2004 at 8:00 a.m. EDT.

Manufacturer Data Submission Begins for Eligible Products Database Pilot Program

Manufacturers may now submit data for the Eligible Products Database. This pilot program was established pursuant to the FCC’s Second Report and Order in Docket 02-6 (FCC 03-101, released on April 30, 2003).

The pilot database is intended to assist applicants in their selection of Internal Connections products, and will be available for general use beginning in the fall of 2004. Data submission by manufacturers, and SLD review of this information, will take place over the summer months.

The pilot program is open to national manufacturers who have completed an enrollment process. Follow this link to enroll as a national manufacturer or to access the data submission functions.

You may also follow this link for more information on the Eligible Products Database pilot program. (This information is also available by following the link for “Eligible Products Database Pilot” under the topic heading “Service Providers” on the left-hand side of this web page.)

Revised Notice to Applicants and Service Providers: Early Filers of FCC Form 470 for Funding Year 2005 (posted 5/6/04, revised 6/3/04)

Applicants:

In general, applicants should not file FCC Form 470 (hereinafter "Form 470") for a funding year until the SLD posts a notice on this web site that the appropriate form is available. At that time, the paper form will be available for downloading from the Applicant Forms area, and the online drop-down menu option for that funding year will be available on the online Form 470 in the Apply Online area.

However, some applicants may have very long procurement cycles or other reasons for filing a Form 470 for Funding Year (FY) 2005 before this online option is available. We would expect this would usually be the case only where new contracts or contract extensions must be signed, not in cases where non-contracted tariffed or month-to-month services are being sought.

Applicants in this situation may file the current Form 470 either online or on paper by following the instructions for the form, together with the additional guidance below. However, please note that because the Form 470 for FY2005 may be different from the current Form 470, these applicants may be required to file a supplemental form to complete the information required by the FY2005 Form 470. The supplemental filing, if required, will not require the competitive bidding process initiated by the original Form 470 to be re-opened.

A notice will be posted to this web site when the FY2005 Form 470 is available. The guidance below should NOT be used once this notice has been posted.

A separate notice will be posted to this web site when the supplemental form, if necessary, is available. If the supplemental form becomes necessary and is not filed by the deadline that would be set, funding requests that rely on that Form 470 will not be funded.

Guidance for applicants filing on paper:

• Use the Form 470 with a date of May 2003 in the lower right-hand corner.
• In Item 2, provide the correct dates for Funding Year 2005 (July 1, 2005 through June 30, 2006). Please note that, if the SLD data enters this form, it will appear on our web site as a Form 470 for Funding Year 2004.
• In Item 13, provide language to clearly identify the services requested on this Form 470 as beginning after the Allowable Vendor Selection/Contract Award Date for this Form 470.

Guidance for applicants filing online:

• In Item 2, choose Funding Year 2004 (July 1, 2004 through June 30, 2005) from the drop-down menu.
• In Item 13, provide language to clearly identify the services requested on this Form 470 as beginning after the Allowable Vendor Selection/Contract Award Date for this Form 470.

For applicants who filed a current Form 470 before this guidance was posted and who are seeking new services or seeking to extend existing contracts, please note the following:

• Applicants who have already filed the current Form 470 seeking new services or seeking to extend existing contracts need not re-file their Form 470.
• Applicants who did not indicate in Item 13 or in another Item of their Form 470 that they were seeking new services or seeking to extend existing contracts need not re-file their Form 470.
• FY 2005 requests for non-contracted tariffed or month-to-month services that rely on FY 2004 Forms 470 posted after the close of the FY 2004 filing window will not be denied because the applicant used the FY 2004 Form 470.
• Remember that, in the above situations, applicants may still be required to file a supplemental form to complete the information required by the FY2005 Form 470.

Service Providers:

Service providers, please note this guidance and be alert for these Forms 470 if you wish to pursue these business opportunities. You are reminded that you can limit your search to Forms 470 posted on or after a specific date in the Form 470 - Search Posted area of this web site.

Miscellaneous Updates to Web Site

Following is a list of the documents or pages that have changed on this web site since the last posting on updates:

A new topic area called "Training and Outreach" has been created in the left-hand column of the SLD web pages. A new document titled WebEx Recordings now has a link under this topic area. This document provides information on recorded training sessions available to applicants and service providers.

The document Contract Guidance has been updated to include information for applicants if (1) the state files a Form 470 or (2) the applicant files a Form 470 and considers a state master contract as one of the bids.

The document Service Substitutions has been updated to reflect the guidance from the FCC that the SLD can now approve service substitutions if the substituted service costs more than the original service. (If the requested substitution involves an increase in pre-discount cost of an eligible item, the request will be funded at the amount originally approved.)

The document Contact Us has been updated to remove extraneous information.

The link to the Waste, Fraud and Abuse Task Force has been moved from the Quick Links area to the Reference Area. An additional link to Submit a Question has been posted to the new "Training and Outreach" area.

Manufacturer Enrollment Begins for Eligible Products Database Pilot Program

Manufacturers can now enroll in SLD's Eligible Products Database pilot program. Manufacturers who have completed the enrollment process will soon be able to start uploading data to the pilot program. We expect this upload function to be available no later than July 1, 2004.

Follow this link to access the enrollment form

You may follow this link for more information on the Eligible Products Database pilot program, or follow the new link under the topic heading "Service Providers" on the left-hand side of this web page.

Renegotiation or Cost Allocation of Contracts that Contain More Than Basic Maintenance

For any contract mentioned on a Funding Year (FY) 2004 application and funding request or pending FY 2003 application and funding request, where the contract includes maintenance that is more than "basic" in nature, the FCC permits applicants 90 days from the effective date of the Third Report and Order [FCC 03-323; effective 03-11-04] - in other words, until June 9, 2004 - to take one of two actions:

Definition of Basic Maintenance

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. (Third Report and Order, para. 23)

If the applicant and the service provider renegotiate a contract, the resulting contract changes should be consistent with the original Form 470 posting. For applicants who prefer to follow the cost allocation approach, this approach is available for signed contracts in existence on March 11, 2004 (the effective date of the Third Report and Order). The burden is on the applicant to justify what portion of the contract price should be allocated to basic maintenance.

Applicants affected by this guidance should, as appropriate:

SLD will not apply the 30% rule, whereby a funding request is denied if 30% or more of the costs are ineligible, to existing contracts based on ineligible non-basic maintenance services prior to contract renegotiation and cost allocation. If SLD determines that the renegotiated contract or cost allocation is appropriate SLD will approve the funding requests at the appropriate pre-discount amount. After contract renegotiation and cost allocation, SLD will apply the 30% rule consistent with normal practice.

Renegotiated Contracts

A. Applicants should provide immediate notice to SLD that they are renegotiating a contract.

The notice to SLD should provide the following information:

B. After renegotiating the contract, the applicant should provide a report on the renegotiated contract.

The report to SLD should provide the following information:

Cost Allocation of Existing Contracts

In lieu of renegotiating contracts that include maintenance other than basic maintenance, applicants may submit an allocation of costs under the existing contract for basic maintenance and other than basic maintenance. Such applicants should submit to SLD a report with the following information:

Alerting SLD to Contract Renegotiations/Cost Allocations

Applicants who plan to renegotiate and who have already been contacted by a PIA Reviewer may alert the reviewer to the contract renegotiation or to the intention to submit a cost allocation of the contract. Be sure to include all the information noted above.

Contract Renegotiation or Cost Allocation Notices may also be submitted by e-mail, fax or on paper as follows:

Important Notes

• Whether an applicant submits a renegotiated contract or a cost allocation of an existing contract, the burden is on the applicant to justify the costs associated with basic maintenance.
• If an applicant plans to provide SLD with a renegotiated contract or a cost allocation of an existing contract, that must be done by June 9, 2004. That deadline can be met by faxing or e-mailing the appropriate documentation by that date or by sending the documentation with a postmark no later than that date. SLD encourages applicants to retain proof of submitting such documentation by the deadline.

Holiday Hours Announcement

The Schools and Libraries Client Service Bureau will be closed on Monday, May 31, 2004 in observance of Memorial Day. The Client Service Bureau will resume normal operations on Tuesday, June 1, 2004 at 8:00 a.m. EDT.

USAC Issues RFP for Expanded Outreach Initiative

USAC has recently issued a Request for Proposals (RFP) seeking a vendor to help USAC in its expanded outreach efforts to recipients of E-rate discounted services. A central component of the expanded outreach will be site visits, which will:

• Allow USAC to see firsthand how E-rate funds are being used,
• Provide another way for USAC to assist applicants and service providers with E-rate, and
• Allow USAC to gather information to improve outreach to all applicants and service providers.

We expect these site visits to start in late summer. As the vendor provides reports on its visits, USAC will review the information gathered and prepare and post a "Best Practices" document based on that information. USAC will also take this information into account when designing future outreach and education efforts, and explore administrative changes to make the application process run more smoothly.

Vendors interested in responding to this RFP may contact USAC through e-mail. Interested vendors should include their contact information and pertinent information about their companies in the e-mail message.

Pilot Program for Database of Eligible Products

Pursuant to the FCC’s Second Report and Order (FCC 03-101, released on April 30, 2003), the Schools and Libraries Division (SLD) is instituting a pilot program to create a database of products eligible for funding as Internal Connections. Manufacturers will be able to post their eligible products to the database to assist E-rate applicants in their selection of Internal Connections products.

Manufacturers who wish to have their E-rate eligible products included in the database must meet two basic requirements:

• Enrolling manufacturers must have a Service Provider Identification Number (SPIN). Follow this link for more information about SPINs, including how to obtain a SPIN.
• Enrolling manufacturers must complete a short online enrollment form. Follow this link for more information about manufacturer enrollment in this pilot program.

The SLD is providing early notice of this pilot program so that interested manufacturers who do not already have a SPIN can complete the short process necessary to obtain one.

Additional information about this pilot program will be posted to this web site as it becomes available.

Service Provider Identification Number (SPIN)

Service providers participating in one or more of the support mechanisms of the Universal Service Administrative Company (USAC) are required to have a Service Provider Identification Number (SPIN).

Manufacturers participating in the SLD’s pilot program to create a database of eligible products must also have a SPIN. If you are a manufacturer who wishes to enroll in this program, and you either do not have a SPIN or the information associated with your SPIN is not current, you must complete FCC Form 498. If you are not sure whether your organization has a SPIN, you may use the SPIN Search Tool to search the SLD SPIN database.

The primary purpose of Form 498 is to collect contact, remittance and payment information for service providers that receive support from the federal universal service support mechanisms. Manufacturers who are requesting a SPIN only for participation in the pilot program do not need to provide any bank remittance information to USAC. Therefore, they may omit lines 102-105 in Block 10 concerning bank remittance information.

Follow this link to the SLD Forms area to access a copy of Form 498 and Instructions.

Manufacturer Enrollment in the Pilot Program for Creating a Database of Eligible Products

Enrollment in the SLD’s pilot program for creating a database of eligible products is based on the Service Provider Identification Number (SPIN) of the manufacturer and the contact information associated with that SPIN. To determine if you have a SPIN or to view the contact information for your company in the SLD database, follow this link to access the SPIN Search Tool.

The manufacturer enrollment process will require specific information for the company name, SPIN, contact person name, and Federal Employer Identification Number; that information must match the information provided in the most recent FCC Form 498 filing. The SLD will then confirm submission with either the general or SLD contact listed in our Form 498 database. This approach is used to ensure the integrity of the enrollment process.

The SLD is providing early notice of this pilot program so that interested manufacturers who do not already have a SPIN can complete the short process necessary to obtain one. The actual enrollment form for the pilot program will be available in the near future.

Miscellaneous Updates to Web Site

Following is a list of the documents or pages that have changed on this web site since the last posting on updates:

A new document titled Contract Guidance collects information and guidance on contract issues from various web site documents into one location.

A new document on Transfer of Equipment summarizes the guidance on equipment transfers from the FCC's Third Report and Order that became effective on March 11, 2004.

A new document on Internal Connections: "Two out of Five Years" Rule summarizes the guidance from the FCC's Third Report and Order on requesting discounts for Internal Connections beginning in FY2005.

Question 7 from Technology Planning - Frequently Asked Questions and Section IV from Technology Planning have been updated to clarify that the Technology Plan, if required, must be approved by an SLD-certified Technology Plan Approver by the filing of the Form 486 or the start of services, whichever is earlier.

SLD Provides Demand Estimate for Funding Year 2004 to FCC

On April 7, 2004, the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC) reported to the Federal Communications Commission that $4.278 billion in requested funding has been estimated for schools and libraries seeking E-rate discounts for Funding Year 2004. This estimate is based on the dollars requested in 39,785 applications received or postmarked by February 4, 2004, 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 FY2004 Demand Estimate Letter to FCC [PDF, 72kb] and the FY2004 Demand Estimate Breakdown [PDF, 15kb].

Form 486T Now Available for Libraries

Libraries that were not in compliance or that did not undertake actions to comply with the filtering provision of the Children’s Internet Protection Act (CIPA) by the start of FY2003 may still receive discounts on Internet Access and Internal Connections commitments for services received from July 1, 2003 through August 14, 2003. (August 14 is the effective date of the FCC order FCC 03-188 implementing the Supreme Court’s decision on the applicability of CIPA’s requirements to libraries.) To request these discounts, libraries must file Form 486T together with a BEAR Form.

Although libraries requesting this reimbursement need not have been in compliance with the filtering provision of CIPA as codified at 47 U.S.C. § 254(h) during this 45-day period, they must have been in compliance with the provisions of CIPA as codified at 47 U.S.C. § 254(l) by the start of services in FY2003. Under 47 U.S.C. § 254(l), a library receiving E-rate discounts for Internet Access and/or Internal Connections is required to have an Internet safety policy that addresses certain issues. There is also a public notice and hearing/meeting requirement.

For more information or to request a copy of Form 486T, please call the SLD Client Service Bureau at 1-888-203-8100.

FY2003 Internal Connections Funded at 70%

On Wednesday, March 3, 2004, the SLD will issue letters for Wave 23 of Funding Year 2003 containing nearly $385 million in funding commitments. In past waves for FY2003, funding commitments have been made on approved Internal Connections requests only at the 85% discount level and above. With the unused funds from prior years rolled over into FY2003 as directed by the FCC in the Third Report and Order, the SLD has determined that approved Internal Connections requests for FY2003 can be funded down to the 70% discount level. Beginning with Wave 23, letters will include funding commitments for approved Internal Connections requests at 70% and above.

Applicants who receive funding commitments for non-recurring services in this and subsequent waves will have until September 30, 2005, for delivery and installation of those services.

Miscellaneous Updates to Web Site

Following is a list of the documents or pages that have changed on this web site since the last posting on updates:

The document Frequently Asked Questions about Eligibility of Products and Services has been updated and reformatted into separate topic pages for easier use. Fiber Optics has been added as a new topic page; it includes two questions on dark fiber. In the future, questions and answers will be added to the bottom of each topic page as additional guidance becomes available.

The Sample Form 486 Notification Letter and the Sample Receipt Acknowledgment Letter have been replaced with the updated versions currently in use.

Third Order and Second FNPRM Published in Federal Register

On December 23, 2003, the Federal Communications Commission (FCC) released its Third Report and Order and Second Further Notice of Proposed Rulemaking (FNPRM) in Docket No. 02-6, FCC 03-323. The Third Report and Order addresses several matters related to the administration of the Schools and Libraries Support Mechanism. A summary of the Third Report and Order can be found in the posting FCC Releases Third Report and Order in the December 2003 archive on this web site.

The Third Report and Order and Second Further Notice of Proposed Rulemaking was published in the Federal Register, Vol. 69, No. 27 for Tuesday, February 10, 2004. The Third Report and Order can be found on pages 6181–6192. The Second Further Notice of Proposed Rulemaking can be found on pages 6229–6238.

The effective date of the Third Report and Order is March 11, 2004, except for § 54.513(c), Resale and Transfer of Services, which contains information collection requirements that have not been approved by the Office of Management and Budget. The FCC will publish a document in the Federal Register announcing the effective date of that paragraph.

Comments on the FNPRM are due on or before March 11, 2004. Reply comments are due on or before April 12, 2004. For information on filing comments, please refer to III. Procedural Issues, C. Comment Filing Procedures on pages 6237–6238 in the notice.

SLD Client Service Bureau Extended Hours on January 31, February 1 and February 4

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, January 31 and Sunday, February 1 from 9:00 a.m. to 6:00 p.m. EST.

CSB will be open on the final day of the Form 471 application filing window, Wednesday, February 4 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 and certify 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.

Urgent Reminder to Applicants

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:

• The Form 471 itself (whether online or paper)
• The Block 6 certification of the Form 471 signed by the authorized person on paper or e-certified by the authorized person online
• The Block 5 certification of any Form 470 cited in a Funding Year 2004 Form 471 signed by the authorized person on paper or e-certified by the authorized person online. Forms 470 with completed certifications submitted in a previous year meet this requirement. Any Funding year 2004 Form 471, Block 5 funding request based on a Form 470 whose certification has not been received by 11:50 p.m. EST on February 4, 2004, or postmarked on or before February 4, 2004, will be rejected.

SPIN Support for Electronic Filers

If you are still filing your Form 471, and are filing online, you must have a Service Provider Identification Number (SPIN) for each Funding Request in order to progress through Block 5 of the online form. Filers who do not have a SPIN will receive a 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 and selected their service providers, 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.) The Item 21 attachment should clearly indicate the name of the service provider. 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.

CSB Toll-Free Fax Back in Service

The toll-free fax number at the Client Service Bureau returned to service today, Friday, January 23, at 11:30 P.M. EST.

If you attempted to send a fax to the Client Service Bureau after 8:30 PM Wednesday but before service was restored, your fax was not successfully received. Please re-send your fax at this time.

Thank you for your cooperation.

CSB Toll-Free Fax Out of Service

The toll-free fax number at the Client Service Bureau went out of service Wednesday, January 21, at 8:30 P.M. EST. Service has not yet been restored. The toll-free telephone number and e-mail access have not been affected by this outage.

If you attempted to send a fax to the Client Service Bureau after 8:30 PM Wednesday, your fax was not successfully received. Please wait until we post a notice that service has been restored before attempting to re-send your fax.

Thank you for your cooperation.

Invoice Deadline Reminder - January 28, 2004

If the deadline for delivery and/or installation of your non-recurring services was September 30, 2003 (regardless of Funding Year), the deadline for postmark or receipt of invoices for those services is generally January 28, 2004. This applies to non-recurring services for Funding Request Numbers (FRNs) with a September 30, 2003 delivery deadline and for which a Form 486 has been certified. Applicants filing Form 472 (BEAR Form) must allow sufficient time for their service providers to complete and return the Block 4 certification before submitting their BEAR Forms.

Remember that if your Form 486 Notification Letter was dated after September 30, 2003, the invoice deadline is the date 120 days after the date of the Form 486 Notification Letter, which would be later than January 28.

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. Please note that you must be able to extend your contract under state contract law. 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 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. If there is a date entered in the "Service_Start_Date_486" field (Service Start Date as Shown on the Form 486) for an FRN, the SLD has a Form 486 on file for that FRN.

WebEx Training on Contracts Scheduled for Friday

The SLD has scheduled an online training session on contracts for this Friday, January 16, using WebEx. Although this training is offered as part of the FY2004 service provider training, applicants are welcome to attend.

The first 68 service providers and applicants who sign up for the training will be accepted, and will receive a notice of acceptance by e-mail on Friday morning. To sign up, please go to the WebEx site. You can follow the registration instructions for an online session by selecting the “Registration” link.

Based upon demand, additional sessions on contracts will be provided at a later date.

Important Information for Funding Year 2004

The FCC and the SLD have already issued notices of changes and clarifications that are applicable to Funding Year 2004. This posting serves to highlight these for you to help you take full advantage of E-rate support in the upcoming funding year and avoid denial of funding requests on Forms 471 for Funding Year 2004. Applicants and service providers can find additional information on this web site. You may also contact the SLD Client Service Bureau by using the Submit a Question link on this web site, by faxing toll-free at 1-888-276-8736 or by calling toll-free at 1-888-203-8100.

New Postings on Educational Purposes and Entity Numbers for Non-instructional Facilities

The SLD has posted two new documents to the Reference Area.

The document Educational Purposes replaces the document “Administrative Offices and Buildings Fact Sheet.” It contains additional guidance on the FCC’s expanded definition of “educational purposes” and provides specific examples of activities at non-instructional facilities that are eligible for E-rate discounts beginning with Funding Year 2004.

Because of this change in the definition of “educational purposes,” the SLD will collect certain additional information about services delivered to eligible non-instructional facilities. The document Entity Numbers for Non-instructional Facilities provides guidance for applicants to indicate their non-instructional facilities on FY2004 Forms 471 and Item 21 Attachments, and how to revise Item 21 Attachments that have already been filed. (Forms 471 that have already been submitted do not need to be revised.)

Funding requests will not be denied solely because non-instructional facilities were not listed on FY2004 Forms 471 and Item 21 Attachments. PIA will work with applicants during the review process to be sure that their non-instructional facilities are properly documented.