[Erate] E Rate Central News for the Week of September 5, 2005

Tue Sep 6 10:08:28 PDT 2005

E-Rate Central News for the Week of September 5, 2005

*	Wave 11 Funding for FY 2005
*	E-Rate and Katrina
*	Congressional  E-Rate Issues

The E-Rate Central News for the Week is prepared by E-Rate Central.
E-Rate Central specializes in providing consulting, compliance, and
forms processing services to E-rate applicants and service providers.
To learn more about our services, please contact us by phone
(516-832-2880) or by e-mail <mailto:services at e-ratecentral.com>
(services at e-ratecentral.com).  Additional E-rate information is located
on the E-Rate Central Web site <http://www.e-ratecentral.com>
(http://www.e-ratecentral.com).

Wave 11 Funding for FY 2005

Wave 11 for FY 2005 is scheduled to be released on Thursday, September
8, 2005.  Funding in this wave is estimated to be under $12 million
which will bring total funding for FY 2005 to $590 million.  Internal
Connections for FY 2005 are still not being funded.

Funding this week will also include Wave 32 for FY 2005 which will
provide $1.4 million for six applicants.

E-Rate and Katrina

In response to the devastation experienced in the Gulf states, the FCC
has already announced several initiatives to provide relief for
FCC-regulated entities affected by hurricane Katrina (see recent FCC
announcement headlines at http://www.fcc.gov/).

The FCC and SLD are currently discussing E-rate actions that can be
initiated to help schools and libraries cope with network infrastructure
and E-rate processing problems.  The problems are significant.
Mississippi, alone, currently estimates that 44 districts, 271 schools,
and 160,000 students have been impacted by damages inflicted by Katrina.
Although some form of E-rate relief is expected to be announced within
the week, there are clearly a number of possibilities.

One thing the FCC could do, which would have the most immediate benefit,
would be to approve FY 2005 Internal Connections funding, beginning in
Wave 12, at least for 90% discount applicants.  This would free up both
installation and maintenance dollars for the poorest schools and
libraries.

Six other procedural actions that could be taken might include: (1)
waivers of the October deadlines for Form 486s and invoices; (2)
extension of the September 30, 2005, service delivery deadline for
non-recurring services; (3) waiver of the "2 in 5" limitation on
Internal Connections for FY 2005; (4) relaxation of service substitution
requirements to allow funding for new projects to be used to replace
older damaged equipment; (5) flexibility in allowing applicants to
transfer equipment to and from temporary locations (that might not meet
the strict definition of an eligible location); and (6) waiver of
recordkeeping requirements for lost or damaged records.  Even if general
waivers and extensions such as these are not granted, we would expect
substantial flexibility of individual applicant requests on a
case-by-case basis.

The recordkeeping issue is particularly important, not just because
there is an E-rate requirement to maintain all related records for five
years, but because such records are critical to processing ongoing
E-rate applications and invoices.  For applicants with lost or
irreparably damaged records, we offer the following suggestions:

1.	For potential audit purposes, which may not arise for 3-5 years,
we recommend that record destruction be documented in a memorandum
describing the extent of the damage.  Photographs may be useful.
2.	For ongoing E-rate processing purposes, every attempt should be
made to reconstruct the most important records.  Funding histories and
copies of basic Form 470s and Form 471s can be obtained from the SLD Web
site.  Copies of invoices, contracts, and installation and/or
maintenance records may be available from service providers.

Congressional E-Rate Issues

The Congressional recess was scheduled to end this Tuesday, but both the
Senate and House returned early to pass emergency appropriations
legislation to address the aftermath of Hurricane Katrina.  Hot topics
as Congress gets back to business will be confirmation hearings for John
Roberts in the Senate and budget reconciliation legislation in both
houses.

There are some important E-rate items as well.  The Oversight and
Investigations Subcommittee of the House Energy and Commerce Committee
held four E-rate hearings from June 2004 through March 2005, but has not
yet issued its report.  That report is expected to be released very soon
and will reportedly be hard on schools, service providers, USAC, and the
FCC for instances of waste, fraud, and abuse on which the hearings
focused.  We expect that release of the report will trigger new,
negative press reports about the E-rate program.  Program participants
may want to be ready with E-rate success stories - especially as the
press turns to school stories with the end of the summer vacation.

An important issue for E-rate is the expiration of the legislation that
suspended application of the Anti-deficiency Act ("ADA") with respect to
the Universal Service Fund through the end of 2005.  Last year, the FCC
determined that the ADA applied to E-rate, and USAC suspended issuance
of Funding Commitment Decision Letters until it could accumulate cash to
cover new commitments.  The problem was solved temporarily with
legislation that exempted the Fund from ADA for 2005.  Without some
further resolution, E-rate funding problems are due to re-emerge in
2006.

Bills have been introduced in the House and Senate to provide a
permanent exemption from the ADA for the Universal Service Fund (H.R.
2533 and S. 241).  Support for ADA relief is stronger in the Senate than
in the House, where Energy and Commerce Chairman Joe Barton has
suggested the E-rate program be ended or scaled back.  While there are
Democratic and Republican co-sponsors of H.R. 2533, Democrats count for
2/3 of the co-sponsors.  One problem is that, unlike last year with the
suspension of letters, there has not been a spotlight on the issue.  To
raise the visibility, to make this more of a bipartisan effort, and to
help persuade Chairman Barton to provide some relief, program
stakeholders are being urged to send letters to their Congressional
representatives - especially Republicans on the House Energy and
Commerce Committee.  You can see the list of Committee members at:
http://energycommerce.house.gov/108/members/members.htm.

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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, MEd, PMP
Project Manager and State E-rate Coordinator
Department of Administrative Services
Information Resources Management Division
955 Center Street NE, Room 470
Salem, OR 97301-2556
Telephone:  503.373.1365
Fax:  503.378.5200
pat.middelburg at das.state.or.us

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