Minutes from the Wednesday Service Provider Conference Call
March 13, 2002

UPDATES

Year 5
The demand estimate for Year 5 is $5.73 billion. SLD is confident it will meet the Priority One demand, which is approximately $1.8 billion. Currently the rough estimate for Priority Two (Internal Connections) demand just at the 90% level is $2.6 billion. From those numbers it appears that the Priority Two requests at 90% will have to be prorated. To be sure we know just what is being asked for, SLD will be asking applicants to "true up" their requests and make reductions if possible. There will be more on this in coming weeks.

SLD wants to get commitments out as soon as possible, and on a regular schedule (such as the every-other-week schedule used for funding Waves for Year 4). In order to be sure that we have the best information about demand for Priority Two at the 90% level, SLD will probably limit commitments in the first Wave just to those applications that had FRNs for Priority One services.

Year 4 - Wave 15
Wave 15 will be made public on March 18. There will be some additional activity after this Wave.

PASSING LINE ITEMS ON BEARS

Service Provider Invoice Forms (SPIs) are processed on a line item basis; each FRN is considered a separate line and each line passes or fails or requires review separately. Currently, BEARs are processed as a whole form; if one item does not get approved, it holds up the processing of the entire BEAR. On the plus side, the Service Provider receives payment for the entire BEAR amount, and the Service Provider and Applicant know that the BEAR is paid.

SLD is considering a move to passing line items on BEARs. This would result in faster response in BEAR processing and cut down on problem resolution. However, checks would only be issued for those line items passed. This would mean more BEAR approval letters and potentially multiple checks relating back to a single BEAR.

SLD is looking for feedback from the Service Provider community on the pros and cons of adopting a line item approach. Please send emails to the serviceprovider address.

FORM 471 ITEM 21 ATTACHMENTS

SLD now accepts Item 21 attachments by email and fax. Please see Guidelines for Submitting Form 471 Line 21 Attachments by Email or Fax, found under SLD's What's New on the website.

NEW FACES

Mick Kraft is the new Manager for Invoicing Issues. Mick will oversee invoicing operations and be SLD's liaison on invoicing issues.

Ed Falkowitz will be moving to DC and will become the Manager for Audit Responses.

Karen Haith will be the new Invoice Manager at NECA and will be the day-to-day manager of invoice operations. NECA is USAC's contractor responsible for invoice processing.

QUESTIONS AND ANSWERS

Q What is the purpose of the "filler" SPIN? I thought it was when a Service Provider hadn't received their SPIN yet and could use this "filler" SPIN temporarily. A customer recently mentioned that they hadn't selected their vendor and would be using a "fake" SPIN until FCDLs came out and could then develop a competitive RFP if funding was granted. Is this legal?
A This is NOT legal. SLD looks very carefully at Applicants using interim SPINs and if there is no legally binding arrangement the Applicant could be subject to FCC action.

There are two "interim" SPINs: If an Applicant has a legally binding contract with a Service Provider, but the Service Provider does not have a SPIN yet, the applicant who filed electronically was allowed to use 143666666 as the SPIN in order to complete the application on line. (Paper filers could just put in the name of the Service Provider and leave the SPIN line blank.) Where a state master contract is due to expire during a funding year or prior to the start of the funding year, the applicant can use 143999999 as a "place holder" for the eventual Service Provider who is awarded the replacement contract.

Q Are true IP handsets with Internet capability "eligible" in any way?
A They are NOT eligible. USAC does not pay for end user equipment, regardless of their functionaltiy; therefore, the handsets are not eligible for discount.

Q Can a definitive date be given for when appeals for Year 2 and 3 will be released?
A At this point there is no information available for the next run of appeals commitments.

Q Will unspent Year 3 funds become available for Year 5?
A This will take FCC action and that action will be informed by the comments the FCC receives on the NPRM.

Q How would Year 5 Priority Two funds be prorated?
A For Priority Two at 90%, the funds that are committed are a percentage of the funds requested, based on how much funding remains available. For example, if there is only $250,000 available, and the total requests are for $1,000,000, SLD will commit 25% of the request. That means the request is multiplied by 25%; if the Applicant requested $40,000, they would receive $10,000 as a commitment.

Q What happens to Applicants that are not in Wave 15?
A If an Applicant has yet to be funded, that Applicant will receive a letter from SLD saying that they have not been forgotten and that their application is still being processed.

Q Is there a database to check the status of a current FRN?
A Not yet, but SLD is working toward this goal.

Q Does the presence of a grant become a factor in evaluating whether there's a fair competition?
A Applicants must have the resources necessary, and if access to a grant is seen as an inducement for the Applicant to choose a particular vendor, there could be a problem in the competitive process.

Q A customer has filed their Form 471. Can the customer do a SPIN change if the Service Provider is the same but the SPIN is incorrect?
A This would be a SPIN correction, and may be filed any time during the funding year.

Q Are Service Certifications sent to each Service Provider, or are they randomly sent?
A While not sent to everyone, Service Certifications are used as an audit mechanism in reviewing invoices.

Q Should one person only be designated to sign off on a BEAR?
A This would depend on the practices of the Service Provider company; SLD has no specific requirements on this.