Federal Communications Commission DA 01-587
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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Request for Review of the
Decision ofthe
Universal Service Administrator by
Springfield Public Schools
Springfield, Massachusetts
Federal-State Joint Board on
Universal Service
Changes to the Board of Directors ofthe
National Exchange Carrier Association, Inc.
Adopted: March 5,2001
By the Common Carrier Bureau:
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ORDER
ZOOi NAR I S A II: 5q
D
File No. SLD-148247
CC Docket No. 96-45~
CC Docket No. 97-21
Released: March 6, 2001
1, In this Order, we grant a Request for Review filed by Springfield Public Schools
(Springfield), Springfield, Massachusetts on May 15,2000,1 seeking review of a funding
commitment decision issued by the Schools and Libraries Division (SLD) ofthe Universal
Sen'ice Administrative Company (Administrator) pursuant to a funding request for internal
connections,C For the reasons discussed below, we direct the Administrator to reconsider
Springfield's funding request, and, if warranted, issue a revised Funding Commitment Decision
Letter consistent with this decision.
2, Under the schools and libraries universal service support mechanism, eligible
schools, libraries, and consortia that include eligible schools and libraries, may apply for
discounts for eligible telecommunications services, Internet access, and internal connections.
3
In
1 Letter from Peter J. Negroni. Springfield Public Schools, to Federal Communications Commission, filed May 15.
20UO (Request lor ReView)
C SCi' Letter from Schools and Libraries Division. Universal Service Administrative Company, to Robert G,
HameL Springfield Public Schools. issued September 8. 1999 (Funding Commitment Decision Letter); Letter
from Schools and Libraries Dinsion. L'l1lversal Service Administrative Company, to Robert G. Hamel,
Sprmgfield Public Schools. issued !'vlay 3. 2000 (Admmistrator's Decision on Appeal),
-1'7 C.FR~~5·-+502. 54,503,
Federal Communications Commission DA 01-587
order to receive discounts on eligible services, the Commission's rules require that the applicant
submit to the Administrator a completed FCC Form 470, in which the applicant sets forth its
technological needs and the services for which it seeks discounts.
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Once the applicant has
complied with the Commission's competitive bidding requirements and entered into an
agreement for eligible services, it must file an FCC Form 471 to notify the Administrator ofthe
services that have been ordered, the carrier with whom the applicant has entered into an
agreement, and an estimate of funds needed to cover the discounts to be given for eligible
services. j In the Year 2 application, this information generally is provided in Block 5 ofFCC
Form 471. Among other information, Block 5 requires the applicant to indicate services
requested, the name ofthe service provider, the type of service or product for which support is
sought, the contract award and expiration dates, and the estimated total annual pre-discount cost.
Using infom1ation provided by the applicant in its FCC Form 471, the Administrator determines
the amount ofdiscounts for which the applicant is eligible. Approval ofthe application is
contingent upon the filing ofFCC Form 471, and funding commitment decisions are based on
information provided by the school or library in this form.
3. In its Year 2 FCC Form 471, filed on April 6, 1999, Springfield sought support
for internal connections, which it valued at $1,096,180.28 and which were to be provided by
LAN Tamers, Inc. SLD denied Springfield's Year 2 application for discounted internal
connections (shared), Funding Request Number (FRN) 263421, on the grounds that a significant
portion ofSpringfield's funding request included products ineligible for discounts.
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In particular,
SLD stated that on-site engineering support, a contingency fund, computer head-end equipment,
video head-end equipment, and shared head-end equipment were ineligible for discounts.
4. Springfield filed an appeal with SLD on October 4, 1999.
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SLD denied
Springfield's appeal on May 3,2000, stating that a significant portion ofSpringfield's funding
request included products ineligible for discounts.
s
Springfield filed the instant appeal with the
Commission on May 15,2000.
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In this appeal, Springfield states that, under the Commission's
rules, on-site engineering support, a contingency fund, computer head-end equipment, and shared
head-end equipment should be eligible for discounts.
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In particular, Springfield argues that on
site engineering support, which "supplies on-going labor for maintenance ofthis system," is
"critical to support the proper operation of [the] system," and, therefore, should be eligible for
4 47 C.F.R. § 54.504 (b)( 1). (b)(3).
j 47 C.F.R. § 54.504(c).
t, See Funding Commitment Decision Letter at 5.
Letter from Peter J Negroni. Springfield Public Schools, to Schools and Libraries Division. Universal Service
Adnllnistrative Company, filed October 4. 1999 (SLD Letter of Appeal).
S See AdmiIllstrator's Decision on Appeal at I.
'J See Request for ReVIew.
IU Id at 2
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Federal Communications Commission DA 01-587
discounts. II Springfield notes that SLD's list ofeligible services states that "labor charge[s]
incurred for the installation and contractual maintenance ofeligible Telecommunications
Services, Internal Connections and Internet Access are eligible for discount.,,12 With regard to
the contingency fund, and the computer head-end and shared head-end equipment, Springfield
argues "all of the other items associated with this installation were approved, so these items must
also be grouped into the approved category.,,13 Springfield notes that SLD previously funded
such services. 14 Springfield also asserts that the SLD did not take into account revised
infonnation submitted in support of Springfield's request for discounts. 15
5. We agree with Springfield that SLD should not have designated on-site
engineering support as ineligible for discounts. In the Universal Service Order, the Commission
concluded "support should be available to fund discounts on basic installation and maintenance
services necessary to the operation ofthe internal connections network."lb As discussed above,
SLD's eligibility list clearly states that "labor charges incurred for the installation and contractual
maintenance ofeligible ... Internal Connections ... are eligible for discount.,,17 SLD's
eligibility list also states that the "Service Category used for labor should reflect the same service
category ofthe product, or service being installed or maintained."18 In accordance with this
requirement, the description ofon-site engineering included in Springfield's FCC Fonn 471
included the parenthetical "Data services items.,,19 SLD designated as eligible for discounts all of
II Sl'C iii. at 2.
12 Iii. at 2-3 (quoting Schools and Libraries Eligibility List (reI. Dec. 2, 1999), located on the SLD web site,
<http:\\ww.sl.unl\t:rsalservice.org>. at 34 (Schools and Libraries Eligibility List for 1999».
I,
Mat 3.
14 Set' id. at 2.
15 Sl'l'id at 2, 4. \Ve note that revised information in support of Springfield's request for discounts was not
submitted to SLD until September 28, 1999. 20 days after the Funding Commitment Decision Letter was issued.
SLD. therefore. was not able to incorporate Springfield's revised information into its review of Springfield's
fundwg request until after its appeal was filed with SLD on October 4, 1999.
16 See Universal Service Order, 12 FCC Rcd at 9021, para. 460.
1- Sl'l' Schools and Libraries Eligibility List (reI Nov. 16. 2000), located on the SLD web site,
<http:www.sl.uniwrsa!service.org>.at 43. See also Federal-State Joillt Board on Universal Service, CC Docket
l'\o. 96-45. Report and Order, 12 FCC Rcd 8776, 9021, paras. 459, 460 (1997) (Universal Service Order), as
corrected by Federal-State Joillt Board Oil Ulliversal Service, CC Docket No. 96-45, Errata, FCC 97-157 (reI. June 4,
1997), afJirmed ill part, Texas Office ofPublic Utility COl/llsel I'. FCC, 183 F.3d 393 (5th Cir. 1999) (affirming
Ullllersal Service Order in part and reversing and remanding on unrelated grounds), cat. dellied. Celpage. /IIC. I'.
FCC 120 S. Ct. 2212 (May 30,2000). Cl!rt. dellied. AT&TCorp. I'. Cincinnati Bell Tel Co., 120 S. C1. 2237 (June
5.2000), cen dismissed. GTE Service Corp. v. FCC, 121 S. Ct. 423 (l'\ovember 2,2000).
1', Sl'e' SprIngfield Public Schools FCC FOl1l1471. at 10 (filed April 6. 1999).
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Federal Communications Commission DA 01-587
the data services described in Springfield's FCC Fonn 471.
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Therefore, labor charges incurred
for the installation and maintenance ofthe data services described in Springfield's FCC Fonn
471 should be eligible for discount. Under these circumstances, we conclude that the record does
not support SLD's finding that on-site engineering should be ineligible for discounts.
Accordingly, we direct SLD to designate as eligible Springfield's request for discounts for on
site engineering support.
6. Based on the evidence presented, we are unable to detennine whether contingency
fund, computer head-end equipment, shared head-end equipment, and video head-end equipment
included in Springfield's funding request are eligible for discounts. Springfield's "revised
infonnation," which included spreadsheets with more detailed line-items, contradicts infonnation
included in Springfield's original funding request, and, therefore, cannot without further
investigation be relied upon in detennining which services should be eligible for discount.
Moreover, neither the Funding Commitment Decision Letter nor the Administrator's Decision on
Appeal indicate the basis for SLD's detennination that these components ofSpringfield's
funding request were ineligible. For example, it is unclear whether the computer head-end
equipment for which Springfield was denied funding was eligible equipment used to transmit
data to the classroom or ineligible end-user equipment.
21
In other instances where SLD has failed
to provide an explanation for its detennination of ineligibility, the Bureau has remanded the
application to SLD for further consideration.
22
We believe that such action is also appropriate
here and shall remand Springfield's application to SLD for further consideration under applicable
program rules and policies."3
2lJ See Funding Commitment Decision Letter at 5.
21 See Schools and Libraries Eligibility List for 2000 at 27. Computers used in the routing of information to
individual classrooms are eligible for discounts.
22 See. eg.. Request for Reviell' b\· Terral School District 3, Federal-State Joint Board on Universal Service,
Challges to the Board ojDll"Ixwrs o/the National Exchange Carrier Association. Inc., File No. SLD-118223, CC
Dockets No. 96-45 and 97-21, Order, 15 FCC Rcd 17969 (Com. Car. Bur. 2000).
23 As in Term! Schoo! District 3. \ve do not suggest that the circumstances require a decision in Springfield's
favor. but find only that under the circumstances SLD's failure to explain the basis for its decision requires
remand.
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Federal Communications Commission DA 01-587
8. ACCORDINGLY, IT IS ORDERED, pursuant to authority delegated under
sections 0.91, 0.291, and 54.722(a) ofthe Commission's rules, 47 C.F.R. §§ 0.91,0.291, and
54.722(a), that the Letter of Appeal filed on May 18,2000 by Springfield Public Schools,
Springfield, Massachusetts, IS GRANTED to the extent provided herein. We direct the Schools
and Libraries Division to review Springfield's funding application and, ifwarranted, issue a
revised Funding Commitment Decision Letter in accordance with the above-stated decision.
FEDERAL COMMUNICATIONS COMMISSION
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Carol E. Mattey, Deputy Chief
Common Carrier Bureau
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