TR Daily 2016 E-Rate Applicants Hurt by EPC Rollout May Seek Relief
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Wednesday, August 8, 2018

2016 E-Rate Applicants Hurt by EPC Rollout May Seek Relief

The FCC today unanimously approved relief for an “isolated” school district in Alaska whose application for 2016 E-rate funding was rejected because of “failures” of the Universal Service Administrative Co.’s E-Rate Productivity Center (EPC), which was rolled out for that funding year and which for the first time communicated USAC decisions using a news feed.

It also directed the Wireline Competition Bureau to “initiate a process by which other funding year 2016 applicants would have 60 days to demonstrate that they experienced the same special circumstances as Pribilof [School District on St. Paul Island, Alaska] and that a waiver would be in the public interest for their respective funding year 2016 E-Rate applications.”

“The area served by Pribilof is approximately 300 miles from the west coast of Alaska, 250 miles north of the Aleutian Island chain, and 800 miles from Anchorage. Nearly 100 percent of Pribilof’s students are Alaska Native, and 68 percent of the students live in poverty,” the FCC said in a footnote to the order. “The district consists of two K-12 schools and two public libraries that are located within the schools and used by the general public after school hours,” it added.

Pribilof attempted to apply as a consortium in 2016 but experienced “numerous problems” in trying to file its application through EPC. After seeking assistance from USAC, it eventually filed through EPC its application for more than $300,000 in satellite Internet services for its two schools on July 25, four days after the deadline for libraries and consortia. EPC immediately generated a message saying the application would be considered after timely filed applications and any late-filed applications filed earlier than Pribilof’s application, according to the FCC order.

The next day, EPC’s news feed sent Pribilof a message saying that because its application was late, it would not be considered for funding, and noting that Pribilof could seek a waiver of the filing deadline. Pribilof did not see the message in the news feed, and did not realize until November 2016, when it had not received a notice of funding, that its application had been rejected for untimely filing. It then sought a waiver of the deadline, but FCC rules require requests for waivers of USAC decisions to be filed within 60 days of the decision.

“We find, as an initial matter, that Pribilof reasonably believed that its funding year 2016 application would be considered for funding by USAC despite being filed outside of the filing window, based on the response generated by USAC through the EPC system,” the FCC said.

It noted that “applicants should not rely on informal guidance from USAC that contradicts Commission rules or policy,” such as the initial communication for EPC that the application would be considered after timely filed and earlier late-filed applications. However, “given the unusual facts present here (including the novelty of a second filing window, complications arising from the rollout of EPC, and uncertainty regarding the relevance of the EPC news feed), we cannot fault Pribilof for relying on what appeared to be a formal acceptance notification it received through EPC from USAC regarding its specific funding application. Pribilof understandably treated the notification as legitimate,” the FCC said.

“Funding year 2016 was the first time that information about specific applications was delivered via EPC news feeds,” the FCC noted.

In a separate statement, Commissioner Mike O’Rielly said, “For the past year, I have expressed support for granting relief to Pribilof, an economically disadvantaged school district serving 65 students on remote islands in the Bering Sea.”

“The EPC system’s technical problems are well-documented, and I understand that the Chairman and staff are working with USAC to address them, so I will not belabor them here. Rather, my specific concern has been the misguided position that information provided by USAC on the EPC news feed constitutes notice to an applicant of a funding decision and sets the deadline to appeal the decision,” Commissioner O’Rielly added.

“Under past precedent and practice, USAC provides notice of a funding decision directly to an applicant in a funding commitment decision letter (FCDL) mailed or emailed to the applicant’s designated contact(s). In contrast, the EPC news feed essentially broadcasts to all users any action taken in the system. Notice by news feed is lazy, inadequate, and wrongly shifts responsibility for some of the failings of the EPC system on to the shoulders of unsuspecting applicants. Given the number of users and actions within the program, the content posted on EPC has been described as voluminous, cluttered, and almost always irrelevant to specific schools or libraries. It is unreasonable to expect applicants — often school and library staff with a primary educational mission to accomplish — to devote resources to continuously monitor a general-purpose news feed in lieu of receiving an FCDL directly from USAC, especially when they were never told they needed to check it,” he said.

“I thank the Chairman for circulating this order to provide much needed relief and for further addressing my concerns. Specifically, the order has been revised to clarify that items posted on the EPC news feed are merely informational in nature,” Commissioner O’Rielly added.

“Additionally, I recommend that the Commission take the next available opportunity to codify a rule that any funding decision be communicated by letter and distributed directly to the applicant’s designated contact(s), preferably by electronic means. Moreover, such decisions should contain a clear statement of each basis for the decision, including citations to any relevant statutory provision or Commission rule, order, or policy. These simple steps could provide even greater clarity and certainty for participants and would improve transparency and accountability for the programs overall. Applicants and the American people deserve no less,” he concluded.

Commissioner Jessica Rosenworcel said, “The E-Rate program is a cherished part of our universal service system. For more than two decades, this program has helped ensure that internet access is available in schools across the country, including, as here, rural Alaskan islands. But great programs do not thrive without regular attention and care. In the case before us, the Pribilof School District of St. Paul Island sought support from the E-Rate program and received an erroneous confirmation that suggested its application was successfully filed. In order to remedy the confusion that followed, due in part to the roll-out of the new portal for applications at the Universal Service Administrative Company, the agency waives its rules concerning appeals and submission deadlines. This is the right call in this case and this decision has my full support.” —Lynn Stanton, [email protected]

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