Disposition of 37 separate appeals of USAC decisions from participants seeking to corect ministerial or clerical errors associated with the invoicing process. Found the denial of funding due to such errors inflicts undue hardship on the E-Rate participants and rigid compliance with the invoice filing deadline and invoice filing deadline extension rules does not further the purposes of section 254(h) or serve the public interest. Directed USAC to review appeals ministerial and clerical errors and not to direct these petitioners to file waiver requests with the Commission.
Waiver of the 2-in-5 Rule. Concluded that USAC had given contradictory explanations in explaining how the rule worked in trainings and had directed applicants to the inaccurate tool, thus a waiver was appropriate in the limited circumstances presented in Petitioners' requests for review.
Clarification that E-Rate eligible entities may share self-provisioned networks supported by the E-Rate program with ineligible entities so long as the ineligible entities pay their fair share of the undiscounted costs associated with constructing and/or operating the network and that E-Rate eligible entities that elect to share their self-provisioned network with an ineligible entity bear the burden of demonstrating that the cost allocation method used to determine the ineligible entity’s fair share is reasonable.
4/20/2020
Academy of Detroit West Operational SPIN Change Order
Disposition of 12 separate operational SPIN changes. When a new provider is delayed in starting to provide service, the applicant may remain with a previous provider during the transition period, even if that incumbent provider was not the second highest bidder. Change of service provider due to unsatisfactory quality of service is allowed. If there are two different services and other bidders can only provide one of the two services, applicant can seek new bids and award a single contract for both services to the winning bidder. If operational SPIN change is necessary due to quality of service issues and the second highest scoring bidder also has quality of service issues, applicant can seek bid from another vendor that can meet quality of service requirements. Dissatisfaction with vendor's customer service rather than quality of service is not legitimate reason to switch vendors. An applicant that overestimates its demand in one FRN cannot allocate its unneeded funding to a different FRN. Operational SPIN change rules do not grant applicants the right to remain with incumbent providers, rather than the newly-selected service provider, when technical problems do not prevent that transition. Applicant cannot wait to switch vendors until after receiving FCDL even if applicant cannot afford new vendor's higher priced service in the absence of E-Rate funding approval.
Topics: Service Implementation Deadline Waiver Request
Request for Waiver filed by Grand Canyon SD of special construction service implementation deadline approved. Although the 24 month timeline for special construction was planned, USAC's denial of extension due to fact that the extension was foreseeable and not unexpected was overruled by FCC because (1) the applicant was unable to complete implementation for reasons beyond the service provider’s control, and (2) the petitioner made good faith efforts to comply with Commission rules and procedures.
Appeal denied of applicant's request for additional funding that could not be justified, based on applicant's estimated additional costs that could not be substantiated by contract. Applicants cannot request anticipatory price increase for a later contract period due to delays in obtaining funding approval. Applicants must not seek funding for higher than the contract price.
COMAD appeal approved where consortium discount was computed based on simple average of all members' discounts and not based on the discounts of only those entities receiving specific services.
Waiver of document retention requirements in several different unique situations. Appeals approved of adverse decisions that arose due to the failure of the applicant or service provider to retain all required documents for the required amount of time from the last day of service. One appeal denied where the FCC rejected the claim that lack of documentation prevented the filing of a timely appeal.
Approval of invoice deadline waiver due to extraordinary circumstances arising due to death of a service provider's employee, even though requested extension was after the original invoice deadline.
Reconsideration and approval of invoice deadline waiver due to extraordinary circumstances arising from vendor's billing system integration that caused a failure to bill customer, even though extension was requested after original invoice deadline.
FBI investigation uncovered a litany of E-Rate violations such as allowing applicants to not pay the non-discounted share; donating money to a non-profit affiliated with an applicant; providing services that were different from approved services; failing to provide approved services; failure to provide services during funding year, etc. Appeals were all denied.
USAC properly rescinded the district’s E-Rate funding on the basis that the underlying applications violated the Commission’s competitive bidding rules by failing to consider the price of eligible services as the primary factor.
Due to problems with EPC applicant's request for relief was approved. Applicant did not realize their application was filed outside the window and they needed to request a waiver from the FCC.
Topics: Ineligible Location; Time Period for RIDF; Estoppel
Funding denials for ineligible locations upheld on appeal; no statue of limitations for recovery of improperly disbursed funds; later determination that the location would now qualify for funding (dormitories of boarding schools) has no bearing on the matter; and USAC is not estopped from seeking repayment because an employee provided inaccurate information to the applicant and stated that the location was eligible for funding.
Topics: COMAD; RIFD; Recovery Against Responsible Party
COMAD and RIFD against applicant was upheld due to applicant's technology director certification stating that the equipment/service was received. Technology director and service provider's representative were later imprisoned for this fraud.
Appeals approved of late filed 486s and absent extraordinary circumstances, FCC will only grant relief for late-filed FCC Forms 486 that were filed no later than 120 days after the last day to receive service for the funding request at issue and where the applicants have demonstrated good cause for the late filing.
Topics: Aircards and Data Plans - Cost-Effectiveness
USAC denials were upheld for individual data plan and air card services for funding year 2015 because the petitioners failed to show that it was more cost-effective to purchase access to the Internet through the use of individual data plans or air cards than to use a wireless local area network (WLAN) connected to the Internet.
Applicant that used trade-in credit based on original cost, and not based on fair market value, as part of payment of non-discounted cost was found to be in compliance with rules. During period in question there was no clear guidance on how to value equipment being traded in. Since then SLD has stated that trade in credits must be based on fair market value of equipment.
Appeal denied of applicant's adverse audit finding due to transfer of equipment purchased with E-Rate support from schools that were not closing within three years of purchase
Appeal to FCC was dismissed because applicant must first file appeal with USAC. Appeal of late submitted Form 486 must first be filed with USAC because 486 deadline is procedural and not set by regulation.
Denial of requests for waiver of invoice deadline extensions. The requests sought to file invoices that were more than 12 months late at the time the petitioners first sought invoice deadline extensions.
471 filed 18 days after window deadline was denied on appeal to be considered timely filed; excuse of new business manager was not accepted as a reason for approving late submission.
Appeal denied of FCDL denial due to applicant's failure to post for internal connections on Form 470 but to apply for internal connections in Form 471.
Topics: COMAD - Services Paid by E-Rate but Not Received
Computer operating as servers were approved for funding but applicant suspended order after receiving 30 of the 128 components. Vendor invoiced USAC for the 98 units that the District refused to receive delivery of.
Topics: COMAD - Services Paid by E-Rate but Not Received
COMAD of funding for wireless switches and access points for a wireless network upheld because the network was not installed and funding was used instead for switches and access points for two servers and fiber optic cabling that connected its elementary and secondary schools. Violation was found because reimbursement was obtained for services that were not purchased.
Topics: Duplicate Service; Service Substitution; Ineligible Services
Ineligible services appeal denied, USAC not required to allow Service Substitution to replace eligible equipment for ineligible equipment; backup units are ineligible.
COMAD reversed on appeal. COMAD against service provider was due to competitive bidding violation because applicant stated it intended to continue its existing multi-year service contract with a specific service provider. COMAD against vendor was rescinded. Recovery will be sought from the applicant. Late appeal by applicant was rejected.
Funding denials due to applicant failure to respond to its request for additional information within the USAC-specified time frame were reversed and remanded, as the FCC found good cause to waive the requirement and for USAC to provide additional time to allow applicants to respond to questions.
Clarification that the Commission’s competitive bidding rules prohibit applicants from including a particular manufacturer’s name, brand, product or service in an FCC Form 470 or RFPs unless they also use the words “or equivalent” in such a description.
Rules that applicants may use a multi-tiered vendor selection process when evaluating bids, but ultimately, price must be the primary factor in selecting a qualified vendor. Specifically, applicants may use the first tier of a multi-tiered evaluation process to assess whether a proposal satisfies minimum technical capabilities, such as the scope of or quality of service, to ensure that the proposal is responsive to the RFP. This tier may be evaluated on a pass-fail basis or it may be scored numerically, where a minimum score is required to advance to the next phase of the evaluation process. Applicants may use the second tier of the evaluation process to examine price and other criteria. Consistent with state and local procurement requirements, any applicant using a multi-tiered process would provide notice - in either its FCC Form 470 or its RFP - to all potential bidders as to the specific criteria to be evaluated in each tier, how those criteria will be scored, which criteria will be used as disqualification criteria, and the circumstances under which bidders will be disqualified from further consideration. Price must be weighted the highest among each of the evaluation criteria in a multi-tiered vendor selection process, consistent with the Commission's rules.
Competitive bidding appeals denied and granted, waiver of appeal deadline, contracts signed a few days before ACD, mistaken 470 listed in 471, 470 in effect did not require noting interest in voluntary extensions and contracts signed for extensions could still rely on these Form 470s.
FCC appeal decisions and precedents announcing new requirements or clarifying existing regulations shall be applied prospectively (particularly when the new standard may be more stringent than the existing standard).
In reviewing competitive bid compliance, USAC should have applied the standard the FCC articulated in the 1999 Tennessee Order, rather than the standard USAC applied from the newer Ysleta Order issued after the year in which the applications were filed and reviewed. USAC should have considered whether price was considered as a factor for vendor selection (as required by Tennessee) and whether the most cost-effective services were selected, and not whether price was weighted the highest during bid evaluations (as now required by Ysleta).
SLD cannot deny funding based on a "pattern analysis" that detects similar wording on Form 470s and conclude competitive bidding violations without examining specific facts of each application.
Grants instant Requests for Review for applications where USAC denied the requests for funding without sufficiently determining that the service providers improperly participated in the applicants’ bidding processes.
Grants appeals of SLD decisions denying funding due to certain clerical or ministerial errors in the application, i.e., a failure to timely file an FCC Form 471, a failure to timely file a certification related to an FCC Form 470, or a failure to comply with minimum processing standards.
Directs USAC to provide all future and pending applicants with a 15-day opportunity to cure any ministerial or clerical errors on their FCC Form 470, FCC Form 471, or associated certifications and to develop targeted outreach procedures designed to better inform applicants of application procedures.
Extends the filing window for Funding Year 2006 (FY2006) until September 30, 2006, and waives the two-in-five rule for FY2006 for schools and libraries in Louisiana, Mississippi, and Alabama that were directly affected by Hurricane Katrina.
Denial of funding upheld where applicants chose the a provider without seeking bids on any of the prices of the specific E-Rate funded services sought. Most of the applicants also submitted FCC Forms 470 expressing interest in purchasing a catalogue of virtually every eligible service, rather than developing a list of services actually desired, based on their technology plans, with sufficient specificity to enable bidders to submit realistic bids with prices for specified services. Some applicants also stated on their FCC Forms 470 that they did not have an RFP relating to the E-Rate eligible services, and then subsequently released such an RFP just a few days later; FCC states these practices are contrary to FCC rules and policies and create conditions for considerable waste of funds.
Commission finds that in limited situations, the infrastructure costs incurred by a telecommunications provider in preparation for the commencement of telecommunications service should be deemed to be recoverable beginning in the first year of the contract (even though incurred prior to the start of the funding year).
Topic:Signed Contracts; Competitive Bidding - Form 470
Applicants who may have already signed a contract without first having posted a Form 470 may then later post a Form 470 and consider the existing contract as one of the bid responses. If the bid evaluation results conclude that the existing contract is the most cost effective option, the applicant is not required to sign a new contract but should memorialize their decision to continue the service and enter the date of this memorialization as the contract award date on their Form 471 application.
Allows members of rural remote communities in Alaska, where there is no local or toll-free dial-up Internet access, to use excess service for the community during non-school hours subject to certain conditions.
Affected applicants that were innocently affected by wrongdoing committed by a service provider were permitted to re-file their 470 and 471 applications for the requested services with the applicable deadlines being waived.
SLD should grant service change requests for a substitute service or product where (1) that service or product has the same functionality; (2) the substitution does not result in an increase in price; (3) the substitution does not violate any contract provisions or state or local procurement laws; and (4) the substitution does not result in an increase in the percentage of ineligible services or functions; requires the applicant's request for a service change to include a certification that the requested change in service is consistent with the controlling Form 470 and Request For Proposal (RFP) for the original services.
Concludes that having a service provider employee listed as the contact person on the FCC Form 470 that initiated a competitive bidding process in which that provider participated makes the Form 470 defective and violates competitive bidding requirements
Establishes the principle of end-to-end leased Internet service and on-premise Priority 1 equipment. Clarifies that applicants should have the flexibility to select different levels of service, to the extent such flexibility is consistent with that school's technology plan and ability to pay for such services, but, when selecting among comparable services, a school should be guided by price in its selection. Even among bids for comparable services, however, this does not mean that the lowest bid must be selected. Price, however, should be carefully considered at this point to ensure that any considerations between price and technical excellence (or other factors) are reasonable.
