A.

Funding Commitments
FY 2006 – Priority 1 commitments only

Wave 009 06/20/2006 $27.3 million
Wave 010 06/27/2006 $40.3 million
Wave 011 07/06/2006 $24.9 million
Wave 012 07/11/2006 $13.1 million

FY 2005
Wave 051 06/28/2006 $64 thousand
Wave 052 07/12/2006 $37.6 million

Beginning with FY2005 Wave 52, Priority 2 funding commitments are being issued at 84% and above.

B.

Update on Bishop Perry Order
Guidance on this order has been posted on the USAC website and also mailed to FY2006 applicants. USAC plans to issue additional guidance for pending applications and pending appeals at a later date.

C.

ABCs of E-rate Training Update
We expect to be able to offer a seventh training session. Please continue to watch the website for details.

D.

Summer Contact Procedures in Effect Through September 8
Reminder: If a PIA reviewer is unable to make a successful two-way contact with an applicant during the summer, the application review will be put on hold until after Labor Day.

If the status of a Form 471 is “Held for Contact Person” in the Form 471 Application Status tool, an applicant that is available to answer questions about the application can click on that link and provide contact information to PIA via email so that review of the application can proceed.

E.

Invoicing Update
Payments for the month of June totaled $141,156,528.36 against requests for $178.5M. In total, 6,737 invoices were processed for 1,389 service providers. This represented 30,329 lines in June with 98% being completed within 30 days. Only 0.14% of the lines paid — that is, 41 lines out of 30,329 — were in process over 90 days.

At the end of June, there were only 15 in-process lines over 30 days. With only 531 lines in process, those over 30 days comprise only 3% of the total.

SPAC reminder
All service providers participating in the Schools and Libraries program must file the Service Provider Annual Certification (SPAC) Form 473 each year. Because invoices have begun to arrive for Funding Year 2006, you should verify that you have filed this form for FY2006 by reviewing your entry in the SPIN Contact Search Tool. Remember that invoices for a funding year will not be paid unless USAC has a SPAC Form on file for that funding year.

Form 500
In general, applicants have until September 30 following the close of the funding year for delivery and installation of non-recurring services. In some cases, additional extensions of time are automatic or can be granted. However, applicants must be sure that both the length of the contract and the last date to receive service correlate with any possible service delivery extension.

To correct a Contract Expiration Date, applicants must file a Form 500. The correction may be necessary because of a data entry error, or the applicant may need to extend the contract if the service delivery deadline has been extended. The Contract Expiration Date on file with USAC will be used to verify invoice payments. For example, USAC may reject an invoice if the Contract Expiration Date on file is June 30th of the funding year but the service delivery occurred after that date but before a September 30th deadline. Please note that the applicant and the service provider must agree on any contract extension, and the extension must be allowed under the terms of the contract.

Note that service delivery extension requests are a separate issue and must follow the guidance on the website. Requesting a change of Contract Expiration Date on a Form 500 does not also extend the deadline for delivery and receipt of non-recurring services.

BEAR Update
Several service providers have volunteered to help with testing of the online BEAR in late August. We’re still looking for a few internal connections service providers to volunteer as well. If you would like to participate, please notify USAC by email.

Once the online BEAR becomes available, service providers must have an active E-Cert status to properly review and certify BEARs online. Please review the E-File User Guide on this website for more information on E-Cert status.

All notifications about the current status of a particular online BEAR will be done by email, so having a valid email address is vital. Currently only 25% of the service providers who sign BEARs have email addresses recorded on their Form 498. Please review the information on your Form 498 and update it as appropriate.

Other
No items.

General Questions Received by E-mail

1. There seems to be confusion with PIA reviewers, applicants, and consultants on the difference between Telecom and Internet Access, both under Priority One. Internet Access is supposed to be for access TO the Internet only, not data or voice between school buildings, right? Your web site discusses that IA is for basic conduit to the Internet and Telecom is for everything else. could you clarify this on the call? Could you reinforce this with your reviewers? I've had two tell me that there is no difference between these two categories and that's not true. Thanks.

Funding in the Internet Access category of service is limited to “basic conduit access” to the Internet. It does not include advanced functions such as direct exchange of data or video between applicant sites or the transport of point-to-point connectivity of data, video, or voice applications that are to be provided only by eligible telecommunications carriers.
For more information, please see the July 21, 2006 News Brief or the Latest News posting SLD Provides Clarification for Eligibility of Priority 1 Services (5/15/05).

2. On-Prem Equipment rules--the missing link between 470, 471, and REALLY getting paid for the service. Some of our customers choose a router, network, and maintenance as a Telecom service. They mention this in their 470 and Item 21 and are often approved. When it comes to paying us as the Service Provider (usually with 474 but sometimes with BEAR), the USAC reviewers don't seem to understand the TN Decision or that On-Prem is eligible. Should the applicant attach the "8 questions" to the Item 21? If so, can these be attached in the new on-line Item 21? What else can the applicant (or the Service Provider) do to make this more seamless?

The Item 21 Attachment should have all the information required so that a prompt funding decision can be made. USAC’s Item 21 Attachment guidance has a specific example of an Item 21 Attachment for an on-premise Priority 1 funding request. The guidance also indicates what information applicants should provide.

It is possible to use the online Item 21 Attachment to provide most or all of the information needed for an on-premise Priority 1 request, although the system is better suited to basic requests. Network diagrams — which in some cases will be required by USAC reviewers — cannot be attached to an online Item 21 Attachment and must be provided separately.

For assistance with invoice payments undergoing service checks, we recommend that applicants or service providers provide helpful information that matches the original commitment. As an example, you could say, “This funding request for telecommunications services includes on-premise Priority 1 equipment that was approved by USAC as submitted.”

3. In the Third Order, paragraphs 44-48, the FCC clarified/modified the TN Decision equipment that could be offered under Telecom. It's my understanding that it can only be a single leased router/server and maintenance with the network to be considered Priority One. Recently several vendors are offering voice equipment (key, PBX, video equipment) as a lease with Priority One AND they are bragging that they are getting funded. Could you review the rules and where to find this information on the SLD web site for applicants who are being "led astray" by consultants? Also, what should the Item 21 look like if you have a legitimate TN Decision on-prem solution. thanks.

The FCC made these determinations in the Third Order (FCC 03-323):

• USAC may use the factors in the Tennessee decision as a processing standard for evaluating on-premise Priority 1 equipment.
• PBX’s cannot be supported under this approach because they route calls within the school or library. This would also apply to key systems and other components that route calls within a school or library.
• “Basic termination equipment” can be supported as part of Priority 1 without having to necessarily meet all parts of the “Tennessee Test.” Examples of basic termination equipment are cable modems, CSU/DSUs, and fiber-to-copper converters — not routers, etc.
• USAC interprets the FCC’s provision for basic termination equipment to constitute a single component per site. Multiple components at a site are conceivable, but only if they meet all the requirements of the “Tennessee Test.”

See the Eligible Services List (searchable interface) and the On-Premise Priority 1 Equipment website guidance for more detailed information.

If there are instances where a party is misrepresenting FCC rules or USAC guidelines — or if you believe USAC funded a request contrary to program rules — you can report this to the Whistleblower Hotline and provide enough detail for USAC to investigate. Remember, however, that USAC does not report back to the original caller on the results of its investigation.

See Question 2 above for more information about preparing Item 21 Attachments.

4. 1) Can you provide a status update on the Eligible Services List for 2006-2007?
    2) The FCC recently struck down the "two signature/two dates" rule. Will the SLD now allow all contracts which are valid under state law?
    Thank you.

USAC sent the draft Eligible Services List to the FCC in May. We expect it to be released for public comment shortly.

The FCC did not strike down the “two signature/two dates” requirement. USAC is reviewing the Richmond Order (DA 06-1265) but for now has not made any changes to its review procedures on contracts.

Remember that if you disagree with a USAC decision, you can appeal that decision. In general, appeals that are still pending when new guidance comes out can take advantage of relief offered in that guidance.

5. Both Telecom and Internet Access are priority one BUT they are NOT the same service, right? Telecom should be voice, video, data between buildings, access and connectivity. Internet Access should be ONLY TO THE CLOUD for TRUE Internet Access. Where can applicants learn about that? Also if I "want to be" a Telecom provider, what does it require?

The first part of this question is answered under Questions 1 and 2 above. For questions about becoming a telecommunications carrier, please refer to the Form 499 Instructions or call USAC toll-free at 1-888-641-8722.

6. If the telecommunications box is checked on the Form 470 and the customer forgets to list DSL services – can they still request discounts on the item 21 for DSL services since DSL services are listed in the 2006 Eligibility list as a telecommunication service? Or are they tied down to only the detailed information that they listed on the Form 470? Some times the person filling out the Form 470 is not aware of all the services they currently have and as a result they do not list every telecommunication service on the Form 470 or unaware that the service is eligible for discounts.

In general, an applicant can receive DSL services even if those services were not specifically listed as part of the telecommunications services being sought under the Telecommunications Services category of service (Item 8 of the Form 470). The Form 470 must have enough information for interested service providers to contact applicants about their general and specific requirements. However, service providers may respond to the information on the Form 470 in different ways, and the most cost effective solution chosen by the applicant is not expected to match in exact detail the Form 470 information.

7. Can an applicant use County Contracts as available buying vehicles, in the same fashion as a State Master Contracts are used? (ie - use the county contract as one of their bids for the 470 - competitive bidding process?)

Yes, a county contract can be considered as a bid response to a Form 470 posting. However, the guidance on State Replacement Contracts posted on the USAC website is only applicable to State Master Contracts.