May 2003 Announcements

Please click on the topic below to view the most recent announcements:

The FCC has provided additional guidance on evaluating the "exclusive use" requirement for on-premise Priority 1 equipment.  (On-premise Priority 1 equipment is defined as service provider equipment located at the applicant site as a part of a Priority 1 service - Telecommunications or Internet Access - and requires compliance with a narrow set of conditions to be eligible for E-rate discounts.)

Previously, the SLD has evaluated whether the contract or lease stipulates that the applicant would have exclusive use of the facilities.  Following the additional guidance, the SLD will request information based on a broader set of exclusive use possibilities beyond merely a contractual guarantee.  The SLD will now seek to determine if there is any "contractual, technical, or other limitation that would prevent the service provider from using the on-premise data communications equipment in part for other customers."

In addition, the SLD has clarified and expanded the descriptions of the conditions which on-premise equipment must meet to be considered for funding as Priority 1 services.

For more information, please refer to Section 2 of On-premise Priority 1 Equipment posted in the Reference Area of this web site.  For an example of the certifications required, please refer to the second page of the Item 21 Attachment example featuring on-premise Priority 1 equipment [PDF Format, 32kb] in the Item 21 Attachments for Form 471 posted in the Reference Area of this web site.

The SLD’s information request process calls for a timely response from applicants to our requests for additional or clarifying information and/or documentation about their forms. This process is described in the document Deadline for Information Requests posted in the Reference Area of this web site.

We know that most schools and some libraries close or reduce service hours during the summer months. Therefore, during the summer period from Friday, May 23, 2003 through Friday, September 5, 2003, we will enforce deadlines for receipt of information only after we make a successful two-way contact with the applicant’s contact person or other person designated by the contact person. We will attempt to make this two-way contact both by the preferred mode of contact and by telephone. If we are unable to make a successful two-way contact during this period – or if appropriate staff who can provide the necessary information are unavailable – we will send a fax to the contact person notifying them that the affected form(s) cannot be processed, and a Funding Commitment Decision Letter cannot be issued, until the additional information is received.

After September 5, the SLD will again attempt to contact applicants who were not successfully contacted during the summer period, using the applicant’s preferred mode of contact. The SLD will then complete the information request process described in the Deadline for Information Requests.

The FCC has provided additional guidance on evaluating the eligibility of Wide Area Networks (WANs).

Current guidance states that program funds cannot be used for the purchase of WANs by applicants, or for arrangements that reach essentially the same result. The additional guidance provides that agreements that include an option for the applicant to purchase WAN facilities will not be funded. In addition, initial construction costs for WAN facilities built for the exclusive use of applicants are not eligible for discounts, except in those rural areas where it can be established that no acceptable alternative exists.

For more information, please refer to Section 5 of the Wide Area Network (WAN) Fact Sheet posted in the Reference Area of this web site.

The SLD selects some applicants for a Selective Review to ensure that they are following certain FCC rules. These rules require applicants to have secured access to all the resources, including computers, training, software, maintenance, and electrical connections necessary to make effective use of the services purchased as well as to pay the discounted charges for eligible services. They also ensure that applicants have complied with the FCC’s competitive bidding requirements. Applicants who are chosen for Selective Reviews are sent the E-Rate Selective Review Information Request.

As part of this request, applicants are asked to answer certain questions and provide documentation regarding their competitive bidding and vendor selection process. Applicants are also asked to provide documentation of their ability to pay their share of the cost of the E-Rate eligible products and services, and to estimate the costs of hardware, software, professional development, retrofitting, and maintenance investments that might not be E-Rate eligible, but are necessary to make effective use of the discounts.

The person authorized by the applicant to sign on the applicant’s behalf, or the entity’s authorized representative, is required to certify that the authorized signer prepared the responses to the Selective Review Information Request on behalf of the entity.

The SLD has become aware that, in some cases, service providers have provided the answers to the Selective Review Information Request. The SLD allows service providers to serve as the contact person on FCC Forms 471 because the service provider is often in the best position to answer the SLD’s questions regarding the services for which funding has been sought on the Form 471. However, it is not appropriate for service providers to provide the answers to the Selective Review Information request. In particular, the service provider selected by the applicant must not answer questions regarding the competitive bidding process, vendor selection, and the applicants’ ability to pay their share of the cost. The applicant or its authorized consultant (which cannot be the applicant’s service provider) is responsible for answering these questions. To emphasize this responsibility, the SLD requires applicants to certify that they have provided the answers to the Selective Review Information Request.

The SLD has denied and will continue to deny funding requests where there is evidence that the service provider, rather than the applicant or its authorized representative, provided the answers to these questions.

The Task Force on the Prevention of Waste, Fraud and Abuse held its first meeting on May 1–2, 2003, in Washington, D.C. A new navigation button has been created on the right-hand side of this page to provide access to information on the work of the Task Force. The list of Task Force members, with an e-mail link from each member’s name, can also be accessed by clicking on this button.

Updates on the Task Force will not be announced in separate What’s New messages, but any new information posted will be linked to this new Task Force page.

Beginning with Wave 1 of Funding Year 2003, Funding Commitment Decision Letters (FCDLs) will have two new features to assist applicants and service providers.

First , these FCDLs now feature a cover page of Important Reminders and Deadlines. This single page lists the important concepts to keep in mind through the remainder of the application process. This page also includes the e-mail, phone and fax contact information for the Client Service Bureau.

Second, the first page of the FCDL now contains a summary of all Funding Requests represented in the Funding Commitment Report. This summary lists the total dollars “Approved,” “As Yet Unfunded,” “Denied” and “Under Review” that are represented by all the Funding Requests featured in the FCDL.

You can access the FY2003 Applicant FCDL from the “Letters (Sample)” listing in the Reference Area of this web site.

Following is a list of the documents or pages that have changed on this web site since the last posting on updates:

A new data point for “Invoicing Mode” has been added to the Data Retrieval Tool and the data point selection screen has been slightly modified. This new data point will feature the type of invoice — Form 472 (BEAR) or Form 474 (SPI) — that will be accepted by the SLD for each FRN. The possible entries for this data point are “BEAR, “SPI” and “NOT SET.” Remember that the first type of invoice — BEAR or SPI — for which payment is approved will set the invoice mode for that FRN.

The data point selection screen has been modified to accommodate this change. Invoicing information now appears in a new section designated “G. Invoicing Data.”