Analysis

On February 8, 2012, the FCC denied 23 appeals due to late filing. When funds are denied or reduced, applicants and service providers have a right to appeal the decision with USAC. Appeals must be submitted within 60 days of the decision being appealed. If the 60-day appeal deadline is missed, an applicant can submit a waiver to the FCC. If “special circumstances” exist, the FCC may waive the appeal deadline.

During the week of February 6, the SLD notified 569 applicants and 518 service providers about the status of their applications from Funding Years 2006, 2007, 2010 and 2011.

USAC’s Schools and Libraries Division hosts monthly service provider conference calls, providing information and guidance for vendors participating in the E-rate program. Funds For Learning has provided the following synopsis of the call.

This week, the SLD notified 648 applicants and 610 service providers about the status of their applications from Funding Years 2004, 2009, 2010 and 2011.

The USAC Schools and Libraries Committee held their Quarterly Board Meeting on January 30, 2012. During the meeting, the Committee stated that the Form 471 window opened as scheduled on January 9, and will close at 11:59 ET on March 20. As of today’s date, 2,261 applicants have filed their FY2012 Form 471 applications and 25,769 FY2012 Form 470s have been posted. By contrast, for Funding Year 2011, 25,402 Form 470s had been filed by the end of January.

The truth about E-rate demand is that even as state and local education budgets continue to shrink, more school districts are looking toward integrating technology into the teaching curriculum, as well as increasing the bandwidth to run this technology. The fact is that the only way school districts can receive federal K-12 technology funding today is through the E-rate program. Due to government budget cuts, the No Child Left Behind technology grant, which only a few short years ago was funded at nearly $700 million annually, is no longer being funded at all. This makes the E-rate program a vital funding stream for the K-12 education and library communities and, as illustrated below, it is time for an infusion of additional dollars by the FCC.

This time of year, many applicants are concerned with conducting a fair and open competitive bidding process for eligible E-rate goods and services, and service providers are trying to respond to as many opportunities as they can. The Form 471 window opened on January 9, and applicants will soon start to file their Form 471 applications by the March 20 deadline. However, there is another critical deadline that is only weeks away. Applicants and service providers who received FY2010 commitments for Internal Connections projects may have an invoicing deadline of January 30, 2012.

Ah, late December – the time every year when we start to make our resolutions for the upcoming year… and take a look back at the ones we kept (or, ahem, didn’t keep) in the past 12 months. 2011 brought some interesting twists and turns - and significant changes - to the E-rate program, which will continue to affect stakeholders for years to come. So even if you may not quite have lost that pesky 15 pounds, here is a quick look back at E-rate in 2011.

The SLD recently announced that they will stop issuing regular funding waves for FY2009. Based on that information, here is a Funds For Learning analysis of where we currently stand. Note: all figures are expressed in millions.

The Universal Service Administrative Company (USAC) released their Quarterly Report on November 2, 2011 and mentioned that they will continue to fine tune their oversight of program beneficiaries and contributors in order to take even more steps to guard against waste, fraud and abuse. The reports highlights that USAC has strengthened their “audit and investigative techniques.”

The FCC’s Fifth Report and Order directed USAC to submit to the Commission a list summarizing “all current USAC administrative procedures.” The USAC procedures that were submitted on October 31, 2011 have been updated to include information from the FCC’s Sixth Report & Order, released in September 2010. The procedures also reflect new guidance provided by the FCC over the past year.

The USAC Schools and Libraries Committee held their Quarterly Board Meeting on October 24, 2011. During the meeting, the Committee discussed the opening and closing dates of the Funding Year 2012 Form 471 filing window, approving the SLD’s recommendation that the Form 471 window open no earlier than January 5, 2012 and remain open for approximately 70 days.

This week USAC notified 432 schools and libraries about the status of their funding requests, issuing over $100M in funding commitments.

As required by the Fifth Report and Order, USAC must submit a semi-annual report to the FCC summarizing the status of all outstanding audit findings. The report details the process the SLD goes through in order to recover improperly disbursed funds and also provides a summary of audits that may lead to the recovery of already committed funds.

On September 21, 2011, USAC notified 836 applicants and 497 service providers about the status of their FY 2010 Priority Two applications at the 80% discount level. Funding Wave 067 included $134.4 million in funding commitments for these stakeholders. This is the first wave where applicants are positively impacted by the Funds For Learning Rollover Order.

The September 30, 2011 Installation deadline is quickly approaching. Applicants affected by the deadline, as well as their service providers, should already be involved in discussions whether or not this deadline will be met. If not, there are options, but this is the time to act upon them.

This week the SLD notified 348 applicants and 367 service providers about the status of their E-rate applications. Three funding waves affected applicants and service providers from FY 2007, 2009 and 2011.

As of August 24, 2011, FY 2007 totals include:

Many applicants use a multi-step, or multi-tier, evaluation process when reviewing vendor proposals. This type of review process involves the elimination of proposals in stages. Weaker bids are eliminated first, while stronger bids move on to later stages. For example, an applicant may use the first step of the evaluation process to assess the technical specifications of bid responses and eliminate those proposals that do not meet technological specifications.

On July 27, 2011, the FCC released three appeal decisions, two of which resulted in a waiver of FCC rules for 36 applicants. In granting the waivers, the FCC recognized that the affected applicants did not commit waste, fraud or abuse tied to submitting their Form 471s, but rather made clerical mistakes and generally did their best to be in compliant.

Last week, at the FCC's request, USAC informed the agency that it had been able to identify additional monies from reserve accounts "not already designated for carry-forward" that would be "sufficient to make commitments at the 80% discount level for Priority 2 requests for Funding Year 2010." The fate of those 80% funding requests now rests with the FCC.

On May 4, Funds For Learning stressed the importance of filing the Form 486 in a timely manner, but it is important for applicants and service providers to understand the myriad of dates and deadlines which apply to E-rate projects in order to be successful. One such date is the service delivery deadline, also commonly referred to as an "installation deadline."

Funding Year 2011 will start on July 1, 2011, and many stakeholders need assistance identifying what they should be doing to prepare themselves for the start of the funding year.

USAC’s Schools and Libraries Division hosts monthly conference calls, providing information and guidance for service providers participating in E-rate. The monthly call for June was held on the 1st. Here is a brief synopsis of the call.

On May 26, 2010, USAC released Funding Year 2010 Wave 1, a $429 million funding wave that was the largest in the history of the E-rate program. One year later, applicants are still waiting for the first wave of FY2011. When can applicants expect to see the first wave of FY2011?

The SLD spends much of their annual trainings on the competitive bidding, procurement and application process tied to the Forms 470 and 471, as that is where most of the more serious compliance issues typically occur. However, there is literally tens of millions of committed dollars go unused each year because of missed payment deadlines and a lack of understanding of the process once a Funding Commitment Decision Letter is issued.

This is the time of year when I get asked by many E-rate stakeholders if I can predict where the final Priority Two (Internal Connections and Basic Maintenance) funding threshold may land. But in order to make an accurate prediction, there are a few factors we must consider.

Each year Congress needs to pass a federal budget in order to keep the Government up and running and for all the federal agencies to remain open. While it appears that Congress and the President are working towards another continuing budget resolution, the appetite among many in Congress for passing a continuing resolution may be wearing thin. What would a Government shutdown mean for the E-rate program?

The E-rate Funding Year 2011 filing window closed on March 24, 2011. Funds For Learning has gathered the available stats for this preliminary FY2011 demand estimate. When all the information has been entered accurately into the SLD’s DRT, Funds For Learning will update these numbers with our final analysis on the FY2011 funding picture.

The FY2011 Filing Window will close at 11:59 EDT on Thursday, March 24th. Until that time, Funds For Learning will provide weekly snapshots of Forms 471 filed for Funding Year 2011.

The FY2011 Filing Window opened on January 11th and will close at 11:59 EDT on Thursday, March 24th. During this time, Funds For Learning will be posting tips you can use throughout the filing window. Today’s filing tip discusses cost effectiveness standards.