Letter from SLD President, Kate L. Moore

January 22, 1999

Dear School, Library and Telecommunications Leaders:

As we begin a new year, it is time again to thank you for your support through the many, many challenges of 1998. All of us at the Schools and Libraries Division (formerly the Schools and Libraries Corporation) of the Universal Service Administrative Company are grateful for your patience and wisdom. Now I’d like to bring you up to date on recent developments and also indicate what’s coming up.

FUNDING COMMITMENT NEWSFLASH

We have just issued the largest wave of funding commitment decisions letters yet. With two more waves of letters to be produced in January, the vast majority of applicants who filed within the 1998 application window will have received a funding commitment decision letter.

Now, in order to get you as much information as soon as possible, we are reforming our letter process: for those who have received no funding commitment letters to date, you will be notified of any funding action taken on your application, even if the status of your internal connections discount request is unknown. This means you may receive more than one letter from us regarding your application, most likely one letter regarding Priority One services (telecommunications services and Internet access), and a later letter regarding internal connections. Service providers will continue to receive corresponding letters whenever line-item funding requests featuring their SPINs are approved.

UPDATE AND SCHEDULE FOR UPCOMING WAVES

Here are key details about the waves of commitment letters so far and those forthcoming soon:

• Since the first funding commitment letters were mailed on November 23, 1998, we have sent out nearly 13,000 letters committing more than $427 million of the $1.9 billion available.

• Wave Five, which hit the mail on January 21, consists of more than 4,500 letters committing over $211 million dollars—our largest wave to date. This wave also marked the beginning of a new discount level for funding internal connections: 80% and above. There is sufficient funding to provide for all approved "Priority One" requests defined by the Federal Communications Commission (FCC) as telecommunications services and Internet access, and for all requests for internal connections at the discount level of 80% and above. Further processing of applications over the coming days may allow us to make additional adjustments to our internal connections funding thresholds for future waves. This will mean more commitments sooner, and more information for Year 2 planning.

• We will produce Wave Six on January 26 and mail it shortly thereafter. Wave Seven will be produced on January 31, and will be mailed shortly after that.

• We aim to begin our new "multiple letter" process with Wave Six. Some applicants will be notified of commitments for Priority One services, with their internal connections requests noted with "AS YET UNFUNDED."

• With Wave Seven, the vast majority of in-the-window applicants will have received funding commitment decision letters. Those that remain will, admittedly, be more complex applications and those on the borderline of the discount level we ultimately reach for internal connections. Recognizing the importance of providing applicants with the information they need to apply for the second year of the program, we are using every measure at our disposal to minimize the number of applicants to be notified after Wave Seven.

APPLY NOW FOR YEAR 2

As you may know, for applications successfully filed during the window, the funding priorities set last spring—with Priority One being telecommunications services and Internet access for all eligible applicants, followed by internal connections in order of need—remain in place for 1999-2000. This presents a major opportunity to build on the hard work you’ve devoted to the E-rate over the past year.

Many of you have begun applying for E-Rate 1999-2000. Since the application window opened on December 1, 1998, we have received more than 10,000 Form 470 applications. And, with the arrival of December 29—the earliest date for filing Form 471—these forms have begun to flow in as well, both on paper and online. We anticipate that when more of you receive decisions about your requests for the 1998 program year, the number of applications requesting discounts for the second year will rise dramatically. But we don’t want you to delay your application unnecessarily.

Even if you have not yet heard about your 1998 discount requests, we urge you to begin the 1999-2000 application process NOW by filing Form 470.

Here are some facts to consider:

• Form 470 does not commit you to purchase anything, but rather provides an essential marker for us that you intend to pursue E-rate discounts, and lets vendors know you may be in the market for their services. We encourage you to file a Form 470 now for all of the services you will need from July 1, 1999-June 30, 2000, including items which depend on a 1998 funding commitment to implement. (Please see our forthcoming Web site guidance, "Quick Tips for Filing Your Form 470 – Even If You Don’t Have a 1998 Funding Letter Yet," for advice on how to handle these services.) After 28 days, when the time comes for you to file Form 471, you should have all the information you need from the 1998 program year to complete Form 471 appropriately.

• While we cannot yet predict overall demand for internal connections funding for applications received within the window, or how far into the discount matrix we’ll be able to go for internal connections in 1999-2000, one thing is for certain: if you don’t apply for internal connections discounts—or for Priority One services, for that matter—you won’t be funded for them.

• In order to assure that collections from the telecommunications industry to fund this program are based on documented need, the FCC considers the number and scope of E-rate applications to set its collections level. Your application counts in documenting this need.

To help you with your application for 1999-2000, we have updated and improved much of the guidance material available on our Web Site (www.sl.universalservice.org) and via fax-on-demand (800/959-0733). We will continue to add useful tips and fact sheets throughout the application window.

As a reminder, the 100-day window closes at 11:59 p.m. ET on March 11, 1999. To be considered as applying "in the window," you must submit your Form 470, wait 28 days from its posting, and then file Form 471, being certain that all application materials, including paper attachments and certifications, have been received by the Schools and Libraries Division by March 11.

We urge you to complete your Form 470 by Friday, February 5. If you file a paper form, SLD will need two to three business days to enter and post it; if there are any problems with the form, it will require additional time before posting. We certainly do not recommend waiting until February 10, which is the last possible day for posting Form 470 with the intention of completing your application within the window. To complete successfully the process beginning on February 10, you would need to file online, flawlessly and without traffic delays, and have each of your next steps to filing the Form 471 (such as competitive bidding and contract negotiations) proceed like clockwork. Remember Murphy’s Law—and file Form 470 as early as you can.

SLC BECOMES SLD IN MERGER WITH USAC

Before closing, I want to make sure you know that the Schools and Libraries Corporation is now the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC). This action is a result of the Order issued by the FCC which directed the universal service support mechanisms to merge into a single entity as of January 1, 1999. Members of the Schools and Libraries Corporation Board of Directors, who represented your interests so effectively during our start-up year, will continue to oversee our work and provide their counsel.

What does this merger mean for you? While our new name and acronym may take a little getting used to, in practical terms, there will be few changes. Our staff remains the same, with the exception of losing Tom Carroll, our Director of Technology Planning, who has taken an exciting new position with the U.S. Department of Education. The rest of us will continue to serve you to the very best of our abilities, recommitting ourselves to our founding principles:

• To conduct open and regular communications with all those interested in the universal service program;
• To take the extra steps necessary to ensure all schools and libraries, regardless of financial resources or geographic location, have the opportunity to participate in the program; and
• To provide for the integrity of the program through careful planning and sound controls to protect this investment in schools and libraries for the long term.

Our goal is, as always, to deliver the E-rate in a manner that provides for the most effective use of technology in our schools and libraries. The dedicated team that has worked with you over the past year will continue to answer your questions and provide you with as much guidance as possible in the second year of the program.

As SLD, our New Year’s resolution is to build on the lessons we’ve all learned during 1998 to make 1999 smoother, easier, and more fruitful for all concerned.

I urge you to continue to use our Web Site and fax-on-demand service as your key information sources; upcoming additions include new tips on filing Form 470, a status report on invoicing, and special materials for libraries. Your use of this information will be one step in making our New Year's resolution a reality.

We thank you for your perseverance during our start-up year, and trust that you will hold us to our resolve for the year ahead.

Sincerely,

Kate L. Moore,
President, Schools and Libraries Division
USAC

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