[Erate] E-Rate News for the Week of 10/6 - 10/10/2003

Mon Oct 13 16:11:53 PDT 2003

E-Rate News for the Week of 10/6 - 10/10/2003 

*	Timely Overview of SPIN Change Procedures
*	New Eligible Services List Available
*	Quarterly E-Rate Payment Authorization Reports
*	
*	The E-Rate News for the Week, prepared by E-Rate Central, is
sponsored by the Council of Chief State School Officers ("CCSSO
<http://www.ccsso.org>") and made possible by a grant from the AT&T
Foundation <http://www.att.com/foundation/>.  Official SLD news is
highlighted on homepage of the 'SLDs Web site
<http://www.sl.universalservice.org> (http://www.sl.universalservice.org).
Additional information is on the State E-Rate Coordinators' Alliance ("SECA
<http://www.e-ratecentral.com>") Web site (<http://www.e-ratecentral.com/>).
*	
*	Timely Overview of SPIN Change Procedures
*	
*	The deadline for submitting SPIN change requests coincides with the
deadline for submitting applicant BEAR or vendor SPI invoices.  For most FY
2002 recurring service FRNs, this deadline is October 28, 2003.   It is
critical, therefore, to focus immediately on FRNs that will require SPIN
changes, particularly those that require preliminary BEAR filings.
*	
*	Here are several examples of problems you may need to address to
fully utilize FY 2002 funding:
*	
	*	Example #1 - You were awarded $10,000 in discounts for
telephone service from Carrier A, but switched service to Carrier B in
February 2003.  If Carrier A did not discount its bills, you will first need
to file a BEAR to be reimbursed for all Carrier A service discounts (say,
$6,000).  Once this BEAR has been approved, (which normally takes at least
20 days) you must file an operational SPIN change to switch the remaining
$4,000 in funding to Carrier B.  Once the SPIN change is approved, you will
have an additional 120 days to file a BEAR covering the remaining service
charges for carrier B.
	*	
	*	Note that if you wait too long to file the BEAR for Carrier
A, you will miss the deadline for requesting a SPIN change.  The only way to
recover from this situation is to file an invoice extension request; wait
for extension approval; file a SPIN change request; wait for change
approval; then file a BEAR for Carrier B services.
	*	
	*	SPIN change and invoice extension guidance is available on
the SLD Web site at:
<http://www.sl.universalservice.org/reference/SpinChange.asp> and
	*
<http://www.sl.universalservice.org/reference/InvoicingDeadlines.asp>. 
	*	
	*	Example #2 - You were awarded $10,000 in discounts for
telephone service from Carrier A, but actually used an additional provider
(that had not been on your application) throughout the year.  Assuming you
were using $6,000 in service discounts from Carrier A and $3,500 in service
discounts from Carrier B, you have two options.
	*	
	*	If you had recognized the dual usage pattern earlier in the
year, the best course of action would be to request a FRN Split.  This
process, which is initiated just like a SPIN change request, results in the
creation of a new FRN associated with Carrier B, with funding split between
the original and new FRNs.  It requires an estimate of the proportion of
funding to be assigned to each vendor's FRN.  (In this case, for example,
you might request that the $6,250 in funding remain with the original FRN
and $3,750 be assigned to the new FRN.)  While the FRN split request is
pending, a BEAR can be filed for Carrier A.  Once the split is approved, you
will receive a new Funding Commitment Decision Letter with the new FRN
identifier.  You will then have to file a Form 486 for the new FRN before
filing a BEAR for Carrier B.
	*	
	*	At this stage in of the year for FY 2002 FRNs, a better
approach may be to treat this situation just like Example #1 (i.e., file a
BEAR for Carrier A, then file a SPIN change request; and then file a BEAR
for Carrier B).
	*	
	*	Example #3 - An underlying assumption in the two previous
examples is that the two carriers were providing equivalent services.  If
the services were different, a service substitution request may be required.
Suppose, for example, that the original funding request contemplated
maintenance service from Vendor A on Dell servers, but that maintenance was
also provided by Vendor B on Cisco routers.  Assuming that the FRN funding
was not fully utilized by Vendor A, the SLD might agree that the router
service provided by Vendor B was an equivalent Internal Connections
maintenance function.  In this case, a service substitution request can be
combined with either Example #2 option (i.e., a SPIN change or a FRN split).
	*	
	*	Service substitution requests, in combination with SPIN
change requests, are discussed in subsection #4 for the SLD's guidance on
Operational SPIN Changes at
<http://www.sl.universalservice.org/reference/OperationalSpin.asp>. 
	*	
*	New Eligible Services List Available
*	
	*	A revised Eligible Services List ("ESL"), dated October 10,
2003, is now available online at
<http://www.sl.universalservice.org/data/pdf/EligibleServicesList101003.pdf>
. As discussed two weeks ago, the new ESL reflects the following major
changes: 
	*	
	*	(1)	Newly Eligible - Alarm lines, cellular and paging
service for virtually all personnel, firewall service or servers, and Web
hosting (but not Web creation) are now eligible.  Note, however, that this
new eligibility is subject to the important disclaimer "Effective for Fund
Year 2004 and later years."
	*	
	*	(2)	Newly Ineligible - Two services that had been funded
in the past will be treated as ineligible, again beginning in FY 2004.  The
most important one is dark fiber - defined as "fiber optic cable for which
the service provider has not provided modulating electronics."  Funding for
dark fiber services in FY 2003 and earlier years will be honored, but
subsequent year funding - presumably even on multi-year contracts - will not
be awarded unless the systems can be restructured into fully eligible WANs.
The other newly ineligible service is voice/video over IP ("VoIP").
	*	
	*	(3)	Tightened Eligibility and/or Clarifications - The
language on "Maintenance and Technical Support" has been changed to stress
that only "[b]asic maintenance services are eligible."  Clarifications have
also been made on the eligibility of UPS, storage, and file server products.

	*	
	*	The revised ESL contains a new section entitled "Special
Eligibility Conditions" (pp. 33-36) that should be reviewed by all
applicants.  It contains additional discussions of such topics as cost
allocation, eligible users and locations, WAN leases, network servers,
software, and storage, and technical services.
	*	
*	Quarterly E-Rate Payment Authorization Reports

	On September 30, as is done at the end of every quarter, the SLD
mailed Quarterly  E-Rate Payment Authorization Reports to every applicant
for which actual payments had been authorized during the period July 1 -
September 30, 2003.  Reports for this quarter and the next are normally the
most critical to review because they reflect most of the invoicing activity
for the preceding funding year (ending June 30, 2003).

	In reviewing these reports, please note the following:

	(1)	Unlike most other SLD correspondence, the Quarterly E-Rate
Payment Authorization Reports are addressed to the person who signed the
associated Form 471 application, not to the person listed as the E-rate
contact.   

	(2)	The "Disbursement Authorization Date" shown is not the
actual payment date.  It is the date on which the invoice was approved by
the SLD.  In the case of a BEAR reimbursement, the invoice payment to the
vendor is usually made about 20 days after the authorization date, and the
vendor is then supposed to pass the payment on to the applicant within 10
days of receiving the payment.  Thus, the applicant should start looking for
a BEAR reimbursement payment from the vendor about one month after the
Disbursement Authorization Date.

	(3)	If the report shows a SPI authorization, it means that the
supplier has submitted an invoice for that FRN and is presumably discounting
the applicant's service charges.  The applicant should check that its bills
are actually being discounted.

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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.

Patricia K. Middelburg
Project Manager and State E-rate Coordinator
Department of Administrative Services
Information Resources Management Division
1225 Ferry Street SE, 1st Floor
Salem, OR 97301-2556
Telephone:  503.373.1365
Fax:  503.378.3795
pat.middelburg at das.state.or.us