The Federal Communications Commission December 23 solicited input on additional proposals for changing the E-rate program, many of them growing out of the work of the Schools and Libraries Division's Task Force on the Prevention of Waste, Fraud and Abuse.
The Notice of Proposed Rule-Making was issued along with an order implementing a number of major program changes. Comments will be due within 30 days of the date the NPRM is published in the Federal Register, and then reply comments will be due in another 30 days. In the NPRM, the Commission solicited input on:
• Whether to revise the discount matrix, beginning in the 2005 funding year, to reduce the discounts available in some or all of the discount bands, including the current 90 percent discount band. The commission asked for comments on whether the current discount matrix "provides sufficient incentives for schools and libraries to limit funding requests to services that can be efficiently used and for vendors to competitively price their services." The commission also sought input on whether it would be appropriate to adjust the matrix "in order to expand the reach of funding to lower discount bands." Noting that it had just decided to limit internal connections support for an applicant to twice every five years, it asked stakeholders whether that decision would affect the need to adjust the discount matrix.
• Whether the process of posting Form 470 applications typically results in competitive bids and why some recipients do not ordinarily receive multiple bids. It also asked whether a different application process would better suit the program's needs, and whether the Form 470 process should be modified or eliminated.
• How the Commission can ensure that applicants select cost-effective services in situations where only one bidder, or no bidder, responds to a Form 470 posting. The commission asked whether "bright-line" rules should be adopted to impose limits on the amount of discounts that could be available.
• Whether the Commission should adopt a new definition of "rural area," in keeping with policies adopted by other federal agencies that deal with programs for rural areas.
• Whether the definition of eligible Internet access to schools should be amended to conform to the definition recently adopted by the Rural Health Care mechanism. In a recent rural health care order, the Commission decided that the ability to alter and interact with information over the Internet was a functionality that could facilitate improved medical care to rural areas, and thus chose not to limit Internet access support for features that provide the capability to generate or alter the content of information. The Commission said it was "concerned that the definition adopted in 1997" for the schools and libraries program "may unintentionally preclude support for features of Internet access that would provide substantial benefit to school children and library patrons."
• Whether the Commission's current rules for supporting infrastructure investments as Priority One services are appropriate. The Commission noted that it had received "a wide range of views on what changes, if any, should be made in this area," and added that any additional rule changes would be effective no earlier than the 2005 funding year. Among the issues it wanted to explore was whether E-rate discounts should be provided to dark fiber. (Currently, these discounts are on hold while the FCC studies the issue.)
• Whether the Commission's existing rules for implementing Commitment Adjustment Decisions (COMADs) should be modified to better address the range of possible situations that may occur. Service providers have strongly objected to requirements that COMAD re-payments must flow through them, particularly in situations where the applicant made a mistake or was required to return funding to the program because of its actions.
• Whether the Commission should adopt a standard for determining whether funding requests are "cost-effective," such as per-student or per-patron funding limits or a ceiling on the total funding that an applicant could receive.
• Whether the Commission should require beneficiaries and service providers to maintain records, "sufficient to demonstrate compliance with rules," for a period of five years.
• Whether applicants should be required to identify any "consultants or other outside experts, whether paid or unpaid, that aid in the preparation of the applicant's technology plan or in the applicant's procurement process." In addition, the FCC solicited comments on whether consultants "and other outside experts offering their service to applicants" should be required to register with USAC to disclose any potential conflicts of interests derived from relationships with service providers.
• Whether the Commission should codify its rules requiring that invoices be submitted by a certain date.
• Whether the Commission should modify its requirements for technology planning to require, for instance, that applicants consider the cost of leasing versus purchasing E-rate-eligible products and services.
• Whether the Commission should adopt rules to prevent subunits, such as individual schools or library branches, from filing applications without the authorization of their central authority. The SLD has implemented this rule on an informal basis at the behest of the Task Force on the Prevention of Waste, Fraud and Abuse.
• Whether the rule requiring that an applicant's survey for discount rate calculation purposes be returned by at least 50 percent of school households. The FCC questioned whether that response rate was higher than necessary to ensure a statistically valid sample.
• How the FCC can measure its progress in assuring that schools and libraries have access to advanced telecommunications and information services at "affordable rates."
• Whether the Commission should adopt policies to specifically help the 8 percent of public school classrooms that, according to the National Center for Education Statistics, are not currently connected to the Internet.
• Whether the Commission should require that each service provider certify that its prices have been "independently developed," a certification that would be modeled on rules under federal acquisition regulations.
The full report can be accessed at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-323A1.doc.
