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Saturday, May 20, 2006

Astonishing FCC decisions

The FCC released two surprising decisions on Friday.

First, the Academy of Careers and Technology et al. decision sent 134 denied funding requests back to USAC because the applications were denied only because the SLD found suspicious similarities among the applications. E-Rate insiders have been aware of the SLD's use of "pattern analysis" to weed out shady service providers, but the FCC said that pattern analysis could be used to identify applications needing further review, but was not sufficient to warrant dismissal.

I agree that USAC should be doing a better investigation, and I'm sure some of the applications involved were on the up and up, but I know that at least one of the companies involved was, in fact, handling the entire E-Rate process for districts, giving itself fat contracts, then subbing out the actual work. I hope this forces USAC to really investigate and debar that service provider.

I think I see 134 Selective Reviews on the way.

The second decision was more significant moving forward. In the Bishop Perry et al. decision, the FCC granted 196 waivers on applications that had been filed late or with minor errors. A new high-water mark in the recent string of applicant-friendly waivers.

But the real news was a set of rule changes. From now on, the SLD has to warn applicants of clerical errors and how to fix them, and notify applicants when they have missed a deadline. Applicants then have 15 days to correct the problem. Wow.

I've been pushing for more proactive communication from the SLD on looming deadlines, but the idea of telling applicants they missed a deadline and giving them 15 days to submit goes beyond what I had asked for.

The first thing that occurred to me: the FCC just pushed the filing deadlines back at least 15 days. "USAC should also notify applicants that have filed an FCC Form 470, but have failed to file an FCC Form 471 ... the close of the filing window." (paragraph 24) Let's say the filing window for the 471 closes February 16. Well, on February 17 or so, the SLD has to send you notification that you have failed to file a Form 471. Then you have another 15 days to file.

The requirement that "USAC shall inform applicants promptly in writing of any and all ministerial or clerical errors that are detected in their applications, along with a clear and specific explanation of how the applicant can remedy those errors" (paragraph 23) opens up a large can of worms for the SLD.

For example, there has been some controversy over the SLD's new policy of denying FRNs if the wrong 470 was cited. The old practice had been for PIA to ask for confirmation of the 470 number (without actually saying that anything was wrong), giving applicants one more chance to fix it. After an uproar, the SLD backpedaled to last year's practice. Now with this new directive, it looks like PIA will have to notify you that the 470 number is wrong, and tell you how you can fix the error.

The big unanswered question for me: how will USAC or the FCC determine which errors are "ministerial or clerical"?

Once again, I'm glad I don't work for USAC.

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