ALAWON: American Library Association Washington Office Newsline
Volume 10, Number 52
July 3, 2001

In this issue: FCC DECLINES CHANGES TO E-RATE PRIORITY FUNDING RULES

On Friday, June 29, 2001, the FCC released their decisions to maintain 
the current priority funding rules for Year 4 and to permanently change 
the deadline for non-recurring services. 

Concerning the internal connections question, the FCC agreed with the 
positions set forth by ALA and others in their Comments on the proposed 
rules and declined to change the current priority funding rules during 
Year Four.  The current rules require that if funding is not adequate to 
fully provide discounts for Priority Two services, then the funds are to 
be prorated among the highest (90%) discount band.  Therefore, during 
Year Four, each funded applicant at the 90% level will receive a portion 
of the amount they requested.  (According to  Schools and Libraries 
Division (SLD), that portion may be around 73% of their approved funding 
request. See SLD's Web site, www.universalservice.org.)

While declining to make a change in Year Four, the Commission mentioned
that they will continue to consider priority rule changes for the 
future.  The FCC expects that shortfalls in funding will continue in 
light of the $2.25 billion cap and demand in Year Four that exceeded 
$5.2 billion.  The Commission, therefore, sees continual funding 
shortfalls as a indicator of the need to change the rules to ensure that 
the neediest libraries and schools receive E-rate discounts.

The FCC decided to permanently change the E-rate program deadline by 
which non-recurring services must be implemented from June 30th to 
September 30th.  This change was needed in order to adjust the program 
to reflect the FCC practice of issuing waivers to extend the deadline 
each year since the beginning of the program.  The Order also adopts 
four criteria which must be met to extend the deadline beyond  September 
30th for the implementation of non-recurring services.

The criteria the FCC adopted allows extensions beyond the September 30th 
deadline for: 

1. Applicants who received their funding commitment decision letter 
after March 1 of the funding year;
2. Applicants who were authorized to make service provider substitution 
or service substitution on or after March 1 of the funding year;
3. Applicants whose service providers were not able to complete 
implementation for reasons beyond their control; and 
4. Applicants whose funding was delayed due to an investigation for 
program compliance.  

If one of these criteria is met before March 1, the applicant would have 
until September 30 of that year to complete implementation.  If one of 
the criteria is satisfied after March 1, the applicant would have until 
September of the following year to complete implementation.

The FCC's Order also allows contracts for non-recurring services to be 
voluntarily extended to coincide with the change in the deadline for 
implementation without applying the competitive bidding requirements.  
However, contracts may not be extended beyond September 30th without 
complying with the competitive bidding requirements.

 

To review the FCC Report and Order, see 
http://hraunfoss.fcc.gov:8835/edocs_public/attachmatch/FCC-01-195A1.pdf.


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