Federal Communications Commr}f}f(fIT
Before the
Federal Communications Commission
Washington, DC 20554
COPYOR!GIN~.A01-588
In the Matter of
Request for Review of the
Decision ofthe
Universal Service Administrator by
Western Heights School District
Oklahoma City, Oklahoma
Federal-State loint 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
File No. SLD-150495
CC Docket No. 96-45
CC Docket No. 97-21 v·
Released: March 6,2001
1. The Common Carrier Bureau (Bureau) has under consideration a Request for
Review filed by Western Heights School District (Western Heights), Oklahoma City, Oklahoma,
seeking review of a decision issued by the Schools and Libraries Division (SLD) ofthe
Unive;al Service AdministrativeCo~pany(Administrator). I Western Heights appeals SLD's
refusal to use the "feeder pattern method" to determine 'Western Height's discount percentage
under the schools and libraries universal service support mechanism.
2
Western Heights further
asserts that because this issue raises a novel question ofpolicy, it should be considered by the
full Commission.} For the reasons discussed below, we deny the Request for Review and affirn1
SLD's denial of Western Heights' application.
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
I Request For Review by John D. Harrington. Funds for Learning, on behalf of Western Heights School District. to
Federal Communications Commission. filed July 31. 2000 (Request for Review).
, SectIOn 54. 719(c) of the Commission's rules provides that any person aggrieved by an action taken by a division
of the :\dministrator may seek review from the Commission. 47 C.F.R. § 54.719(c). The Commission's rules
proVide that requests for rene\\' ofdecisions shall be considered and acted upon by the Common Carrier Bureau,
except that requests which raise novel questions of fact, law. or policy shall be considered by the full Commission.
47 C.F.R. § 54.722(a).
Federal Communications Commission DA 01-588
for eligible telecommunications services, Internet access, and internal connections.
4
In
accordance with the Commission's rules, the discount available to a particular school or library is
deternlined by indicators of poverty and high relative cost of service.
5
The level ofpoverty for
schools and school districts is measured by the percentage oftheir student enrollment that is
eligible for a free or reduced-price lunch under the National School Lunch Program (NSLP) or a
federally-approved alternative mechanism.
b
A school's high-cost status is derived from rules
that classify it as urban or rural.! The Commission's rules provide a matrix reflecting both the
school's urban or rural status and the percentage of its students who are eligible for the school
lunch program to establish its discount rate, ranging from 20 percent to 90 percent.
s
A school's
discount rate is then applied to the cost of eligible services requested by the school.
9
3. Western Heights is a school district which includes elementary schools as well as
middle and high schools.
10
A school district calculates its discount by first calculating the
discount applicable to each of its member schools and then calculating the weighted average of
these discounts, based on the number of students in each schoo!. 11
4. In its application for year-two funding, Western Heights calculated the discount
applicable to its elementary schools by an actual head-count of the number of students in those
schools that reported that they were eligible for free or reduced price lunches under NSLP.
12
However. to deternline the number of such students in its middle and high schools, Western
Heights used the "feeder pattern method" rather than an actual head-count. 13 The "feeder pattern
method" estimates the numbers ofmiddle and high school students eligible for NSLP based on
the assumption that these schools will have eligibility rates similar to the elementary schools that
feed I11to them.
14
Thus, \Vestern Heights based its reported middle and high school eligibility
rates on a student-weighted average ofthe eligibility rates of its elementary schools.
15
Using this
4 47 es.c. § 254(h)(I)(B); 47 C.F.R. §§ 54.502,54.503.
, 47 C.F.R. § 54.505(b).
( 47 C.F.R. § 54.505(b)(I).
4- CF.R. §§ 5..L505(b)(3)(i). (Ii)
, 47 C.F.R. § 54505(c).
'i /d.
!(I Request for ReView at 1-2.
II 47 CF.R. § 54.505(b)(4)
Ie Request for Review at 2.
13 Ie!
14 Id
15 /d at 2-3.
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Federal Communications Commission DA 01-588
method, Western Heights calculated that its middle and high schools were entitled to the
maximum 90% discount, and that the district overall was entitled to an 88% discount. 16
5. On August 10, 1999, SLD issued a Funding Commitment Decision Letter,
granting Western Heights' funding requests but assigning an 80% discount rate to the middle
school, a 60% rate to the high school and a 78% shared discount to Western Heights as a
\-vhole.
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' On August 31, 1999, Western Heights appealed the discounts to the Administrator,
submitting documentation that supported \\'estern Heights' calculations and use ofthe "feeder
pattern method."ls On June 29, 2000, the Administrator denied the appeal, stating that "the
shared discount percentage you requested was based on Feeder School method, which is an
unacceptable method for E-rate discounts" and that "SLD modified your discount percentage to
78% in accordance with the actual count of students participating in the National School
Program."1<) Western Heights then timely fi led the instant Request for Review.
6. On review, we find that SLD properly denied Western Heights' request for higher
discounts based ?n the "feede.rp.atte~method." This method is n?t one of.theacc~~table
methods set out m the CommiSSIOns rules and orders for calculatmg the dlscount.- In the
Universal SenJice Order, the Commission held that schools that do not use a count of students
eligible for the national school lunch program could use only the federally-approved alternative
mechanisms contained in Title I ofthe Improving America's Schools Act, and that all ofthese
mechanisms: whileloo~ingto other indices~fpoverty~ucha:,~articipation.in. tuition scholarship
programs, still rely on ' actual counts of low-mcome children. - The pern11sslble methods thus
do not include the "feeder pattern method," which relies on extrapolation rather than actual
counting.
22
Indeed, in the Universal Service Order, the Commission considered a comment
1(, FCC Foml ..+ 71.'0.·estan Heights School Distnct. filed April 2, 1999.
i~Letter fronl Schools and Libraries Divlsion. Universal Service Administrative Co .. to Joe Kitchens, Western
Heights School District 41. dated August 10. 1999 (Funding Commllment Decision Letter).
IS Letter of Appeal. from John D. Harrington, Funds for Learning, on behalfof Western Heights School District, to
Schools and Libraries Division, filed September 3, 1999.
!" Letter from Schools and Libranes DivisIOn. Universal Service Administrative Co.. to Joseph Kitchens, Western
HeIghts School District. dated June 29. 2000, at I (Administrator's Decision on Appeal).
cO Rei/Llest For Review br Merced L'nion High School District, Federal-State Joint Board on Universal Ser....ice.
Changes to the Board ofDirectors ofthe National Exchange Carrier Association, Inc., File Nos. SLD-8404, 9605,
CC Dockets No. 96-45 and 97-21, Order, 15 FCC Red 18803 (Common Carrier Bur. reI. 2000) (Merced); Request
.lor Rene\\' bv Enterprise Cit)' School District, Federal-State Joint Board on Universal Service, Changes to the
Board o(Directors o(tlle National Exchange Carrier Association. Inc., File No. SLD-46073, CC Dockets No. 96-45
and 97-21, Order. 15 FCC Rcd 6990 (Common Carrier Bur. reI. 1999) (Entelprise).
21 Federal-State Joint Board on Universal service, CC Docket No. 96-45, Report and Order, 12 FCC Red 8776,
9044-46.9524-25 (1997) (Universal Service Order), affirmed in part, Texas Office ofPublic Utility Counsel v. FCC,
183 F3d 393 (5
th
Cir. 1999) (affirmmg Universal Service Order in part and reversing and remanding on unrelated
grounds). cerl denied. Celpage. Inc v FCC, 120 S. Ct. 2212 (May 30,2000), cert denied, AT&TCorp. v.
CinClllllati Bell Tel Co., 120 S. Ct. 2237 (June 5, 2000), cert dismissed, GTE Service Corp. v. FCC, 121 S. Ct. 423
(Nov. 2. 2000)
:: Enlerprise at para. 6.
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Federal Communications Commission DA 01-588
speci ficalh suggesting the use of the feeder method to calculate discounts and rejected it. 23
Thus. we fwd that Western Heights' Request for Review seeking to use this method must be
denied. In addition. we reject Western Heights' assertion that this appeal raises a novel issue of
policy which must be considered by the full Commission, because as noted above, the
Commission has already addressed the issue.
7. ACCORDINGL'{, IT IS ORDERED, pursuant to authority delegated under
sections 0.91, 0.291, and 54.722(a) of the Commission's rules, 47 C.F.R. §§ 0.91, 0.291, and
54.722(a), that the Request for Review filed by Western Heights School District, Oklahoma City,
Oklahoma on July 31,2000, IS DENIED.
FEDERAL CO\lMUNICATrONS COMMISSION
i
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Carol E. Mattey
Deputy Chief. Common Carrier Bureau
" Universal SC/Tlce Order at 95':5 (notlOg \\!th approval a conmlent that c.\pJndlOg pennissible proxies beyond
those that ha\'e already been adopted could unnecessarily entangle the FCC In endless review and approval
processes of many less appropriate schemes): sec a!sl) Enterprise at para. 6 (IlOtmg that "the Commission
specIfIcally rejected cOllilllenters' suggestIons that would have permrtted showlOgS. such as the feeder method, that
would merely approximate the percentage of low income chrldren in a partIcular area.") (citing Universa! Service
Order) Western Heights ... :es to the "long standmg practice" of the Department of Education as pennitting the use
of the feeder method to deternlme the number oflow·income students in a school and urges us to defer to the
Department of Education's expertise 10 this area. Request for Review at 2. However, as indicated, the Commission
has already conSIdered such proxy methodologies and rejected them.
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