On Tuesday, May 8, 2007 the FCC released several appeal decisions favorable to the applicant community. The FCC also directed USAC to be more proactive in working with applicants in the future to help them avoid getting requests denied or reduced. Close to $90 million is tied to these appeals; however, this will have minimal effect on the Universal Service fund.
Bootheel Consortium FCC Appeal Decision
The FCC granted 17 appeals in this decision. USAC denied these requests because they found that the applicants were either ineligible for support or because 30% of the funding requests were for ineligible entities. The FCC has made clear in recent rulings that the 30% rule is tied to ineligible services and products, not ineligible entities.
The FCC gave USAC a directive that they need to work with applicants and inform them if they may be subject to having their funding denied or reduced because they have ineligible entities in their requests. Applicants are also to have an opportunity to remove ineligible entities from their applications or to resubmit the request for the entity in question in a separate funding request.
View the Bootheel Consortium Appeal Decision
Academy of Excellence FCC Appeal Decision
The FCC granted 56 appeals. USAC determined that the applicants did not have the necessary resources to effectively make use of the E-rate program. Many applicants receive selective reviews where USAC asks further questions about their competitive bidding process and reviews their budget documentation. Going forward the FCC has given USAC directives to reach out to applicants and educate them about what type of documentation they are looking for.
The FCC stated, '…On balance, we conclude that it is not necessary to serving our goals of avoiding waste, fraud, and abuse to require schools to have final, written commitments of funding so far in advance of the time that it is needed. As we have previously acknowledged, real world experience in the context of the E-rate program dictates that some flexibility be given to schools and libraries when budgeting funds for eligible services. Specifically, the necessary resources requirements are satisfied as long as: (i) when filing their FCC Form 471 applications, applicants have specific, reasonable expectations of obtaining the funding needed to ensure availability of the necessary resources; (ii) applicants do not authorize USAC to pay support to the service provider for the eligible services until the applicant has received the funding and thus has the necessary resources to pay the applicants' share of the costs; and (iii) applicants provide sufficient documentation to USAC of such funding and resources availability, as USAC may request. Thus, we grant these appeals and remand the underlying applications to USAC for action consistent with our findings here…."
View the Academy of Excellence Appeal Decision
Aberdeen School District FCC Appeal Decision
The FCC granted 62 appeals in this decision. The FCC found that the applicants did not violate the 28-day competitive bidding violation, misunderstood the regulation or the FCC had good cause to waive this particular rule. The FCC is directing USAC to inform and educate applicants in FY 2007 if they may be subject to this rule violation and give them an opportunity to explain or possibly amend their Form 471.
View the Aberdeen School District Appeal Decision
Aiken County Public Schools FCC Appeal Decision
The FCC granted 59 appeals. In these cases USAC determined that 30% or more of their funding requests were for ineligible services. The FCC did not agree with their rationale in most of these cases or waved the regulation because of good cause. The FCC has also ordered USAC to inform applicants in writing of the ineligible services and give applicants 15 days to remove the ineligible services and/or products from their funding requests or give applicants an opportunity to provide further information about their requests.
While the FCC has released many appeals over the last year favorable to E-rate beneficiaries, Funds For Learning would still caution applicants to be informed about the rules and regulations governing the E-rate program.
