E-Rate News for the Week of 11/25/02 – 11/29/02
•
Wave 17 Funding for FY 2002: Congratulations to Holy Rosary School in
Jacksonville, FL
•
Canceling FRNs for Questionable Vendors
The E-Rate News for the Week, prepared by E-Rate Central, is sponsored by the
Council of Chief State School Officers ("CCSSO") and made possible by a grant
from the AT&T Foundation. Official SLD news is in the "What’s New!" section of
the SLD’s Web site (http://www.sl.universalservice.org). Additional information is
on the State Education Telecommunications Alliance’s ("SETA") Web site
(http://www.e-ratecentral.com).
•
Wave 17 Funding for FY 2002
Wave 17 of Funding Year 2002 will be released on Tuesday, December 3.
Total funding in this Wave is approximately $96 million for 211 school and
library applicants. The cumulative total for FY 2002 is now $1.55 billion for
over 27,834z applications.
Internal Connection funding is being provided only for applicants at the
90% discount rate. No Internal Connection funding is available below
80%. The availability of Internal Connection funding for discounts in the
80-89% range cannot yet be projected, but requests for funding in this
range are currently being reviewed by the SLD.
•
Canceling FRNs for Questionable Vendors
(Note from Claude: If you
decide to follow the advice below, PLEASE call me first so that I
might be able to advise you upon the impact with your FRN or entire
application)
In the E-Rate News for the Week of October 7
th
(see the weekly news
archive in the E-Rate Central Web site http://www.e-
ratecentral.com), they again discussed questionable supplier practices
and indicated that a number of applications, including some from FY 2001,
were being held by the SLD pending ongoing investigations.
Since many of the pending applications include funding requests ("FRNs")
for services from multiple vendors, E-Rate Central has begun receiving
inquiries from applicants wishing to voluntarily cancel FRNs associated
with questionable vendors in hopes of obtaining approval for the other,
less controversial, FRNs. While this may be a viable strategy, there are
several issues involved.
(1) There is no clear way to identify vendors that are under investigation or
FRNs that may be delaying application approval. One way to check on
"questionable" vendors is to use the Data Request Tool on the SLD
Web site, as discussed in our October 7
th
newsletter, to see if an
unusually high percentage of FRNs associated with a given vendor are
being denied or delayed.
(2) If the services in question have not been used, because E-rate
discounts have not yet been awarded, there is little risk to canceling
questionable FRNs. If the services are still needed, they can be
applied for again – with a new vendor – for FY 2003. If the services
have been used, canceling the FRNs is more risky because it
eliminates any possibility of E-rate discount reimbursements if the
FRNs are ultimately approved.
(3) Canceling FRNs – or entire Form 471 applications – provides clear
benefits to the E-rate program as a whole because it frees up funding
that is being held in reserve pending the completion of vendor
investigations. The SLD may be able use these additional funds to
bring Internal Connection funding down to lower discount rates.
(4) There is no assurance that canceling problematic FRNs on a pending
application will mean that any other FRNs will then be funded. The
SLD may believe that interactions between a questionable vendor and
an applicant have tainted the entire competitive bidding process. Thus,
even otherwise uncontroversial FRNs for services from traditional
telecommunications and Internet access providers may be
compromised.
(5) Before canceling any FRN, make sure that the action does not result in
a breach of contract with the service provider. Unexpired contracts,
particularly those that are contingent upon E-rate funding, should be
reviewed with special care.
There are several ways to cancel one or more pending FRNs. If the
application is currently in active review by the SLD, a request can be
made to the PIA reviewer and confirmed in writing. If the application is not
being reviewed, an applicant can cross out the relevant FRNs on the Form
471 Receipt Acknowledgment Letter ("RAL"), marking each with the word
"CANCEL," and mail or fax a copy back to the SLD as per the instructions
on page two of the RAL. Alternatively, a separate FRN cancellation
request can be sent to the SLD by mail (FRN Cancellation, Box 125 –
Correspondence Unit, 80 South Jefferson Road, Whippany, NJ 07981) or
fax (973-599-6542).
If there are FRNs on the Form 471 in question that are not being
canceled, we strongly recommend that any correspondence with the SLD
include a certification – if true – that the vendor(s) associated with the
canceled FRNs played no role in the selection of the remaining service
providers. This may help alleviate the 4
th
issue discussed above.
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Disclaimer: This newsletter may contain unofficial information on prospective E-rate developments and/or may reflect E-
Rate Central’s own interpretations of E-rate practices and regulations. Such information is provided for planning and
guidance purposes only. It is not meant, in any way, to supplant official announcements and instructions provided by either
the SLD or the FCC.