[Erate] E-Rate Central News for the Week of September 12, 2005

Mon Sep 12 09:04:06 PDT 2005

E-Rate Central News for the Week of September 12, 2005

*	Wave 12 Funding for FY 2005
*	Katrina: FY 2005 - FY 2006 E-rate Implications

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 12 Funding for FY 2005

Wave 12 for FY 2005 is scheduled to be released on Wednesday, September
14, 2005.  Funding in this wave is estimated to be about $20 million for
over 350 applicants.  This brings total funding for FY 2005 to $610
million.

Internal Connections for FY 2005 are still not being funded.  Several
weeks ago, prior to Katrina, the SLD had requested FCC permission to
begin funding Internal Connections at discount levels of 87% or above.
In the aftermath of Katrina, we expect Priority 2 funding for FY 2005 to
be delayed (see discussion below).

Funding this week will also include Wave 33 for FY 2004 which will
provide $1.2 million, much of which is for libraries in Puerto Rico.

Katrina: FY 2005 - FY 2006 E-rate Implications

As the scope of the Katrina disaster becomes clearer, so too does the
realization that extraordinary relief efforts will be required and that
there will be a ripple effect nationwide.

In last week's newsletter, we discussed various E-rate waivers and
extensions that might be provided to help cope with post-Katrina
problems.  There is now a growing sense that such measures might not be
enough, and that serious consideration needs to be given to opening a
second special application window for FY 2005 and/or setting aside
special funds for FY 2006 -- perhaps with special discount rates.

Although it is too early to predict exactly what steps the FCC and SLD
may take, and what all the implications may be, applicants and service
providers might want to factor the following scenarios and/or
possibilities into their plans:

1.	Until relief plans are finalized, and the financial impact is
estimated, the start of Internal Connections funding for FY 2005 is
probably going to be delayed.  Those hoping for Priority 2 funding to
begin in the next wave or two are likely to be disappointed.  Those
hoping that Priority 2 funding for FY 2005 would get to 80% or below may
also be disappointed, or at least may be in for a longer wait.

2.	A delay in Internal Connections funding could have an even more
severe impact if it lasts beyond the end of the current year.  E-rate's
temporary exemption from the federal Anti-Deficiency Act ("ADA") - the
same Act that had led to a four month E-rate funding freeze last fall -
expires December 31st.  Legislation has been introduced for a permanent
ADA exemption, but it does not yet appear to be a Congressional
priority.  This might change if a case can be made that an ADA exemption
- even another temporary one - is needed to help ease Katrina
reconstruction problems.

3.	A special funding window for FY 2005 might delay the normal
filing window for FY 2006.

4.	Unless new E-rate funds are provided, special set-aside funding
for Katrina-damaged schools and libraries would reduce funding available
to other applicants.  One possibility for obtaining additional E-rate
funds would be to tap previously unused funds.  According to the latest
USAC filing on program demand, there is approximately $365 million in
funds that could be rolled over into FY 2005 or FY 2006.

5.	The entire Katrina E-rate situation may be further complicated
if other affected applicants (e.g., other schools absorbing displaced
Gulf state students) also ask for, and receive, special E-rate
considerations.

Whatever the scenario(s), it is safe to assume that Katrina will mean
something other than E-rate business as usual, at least through FY 2006.

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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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