[Federal Register Volume 68, Number 13 (Tuesday, January 21, 2003)]
[Notices]
[Pages 2770-2771]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-1176]


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FEDERAL COMMUNICATIONS COMMISSION

[CC Docket Nos. 96-45, 97-21; FCC 02-306]


Application for Review by Lunenburg County Public Schools, 
Victoria, Virginia; Federal-State Joint Board on Universal Service; 
Changes to the Board of Directors of the National Exchange Carrier 
Association, Inc.

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: In this document, the Commission grants the application for 
review seeking review of an Order issued by the Accounting Policy 
Division of the Common Carrier Bureau (Bureau) on delegated authority. 
In the Order, the Bureau upheld the decision of the Schools and 
Libraries Division of the Universal Service Administrative Company, 
which denied Lunenburg County Public Schools' Funding Year 1999 
application for discounts under the schools and libraries universal 
service mechanism. This document also remands to SLD to fund the 
request as set forth.

DATES: Effective November 20, 2002.

FOR FURTHER INFORMATION CONTACT: Narda Jones, Attorney, 
Telecommunications Access Policy Division, Wireline Competition Bureau, 
(202) 418-7400, TTY: (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
in CC Docket Nos. 96-45 and 97-21 released on November 20, 2002. The 
full text of this document is available for public inspection during 
regular business hours in the FCC Reference Center, Room CY-A257, 445 
Twelfth Street, SW., Washington, DC 20554.
    1. Before the Commission is an Application for Review filed by 
Lunenburg County Schools (Lunenburg), Victoria, Virginia, seeking 
review of an Order issued by the Accounting Policy Division of the 
Common Carrier Bureau (Bureau) on delegated authority. In the Order, 
the Bureau upheld the decision of the Schools and Libraries Division 
(Division) of the Universal Service Administrative Company, which 
denied one of Lunenburg's Funding Year 1999 application for discounts 
under the schools and libraries universal service mechanism. For the 
reasons set forth below, we grant the application for review and remand 
to SLD to fund the request as set forth in this Order.
    2. Under the schools and libraries universal service support 
mechanism,

[[Page 2771]]

eligible schools, libraries, and consortia that include eligible 
schools and libraries, may apply for discounts for eligible 
telecommunications services, Internet access, and internal connections. 
The Commission's rules require that the applicant make a bona fide 
request for services by filing with the Administration an FCC form 470, 
which is posted to the Administrator's website for all potential 
competing service providers to review. After the FCC form 470 is 
posted, the applicant must wait at least 28 days before entering into 
an agreement for services and submitting an FCC form 471, which 
requests support for eligible services. SLD reviews the FCC forms 471 
that it receives and issues funding commitment decisions in accordance 
with the Commission's rules.
    3. Applicants may only seek support for eligible services. The 
instructions for the FCC form 471 clearly state: ``You may not seek 
support on this form for ineligible services.'' The instructions 
further clarify that ``[w]hile you may contract with the same service 
provider for both eligible and ineligible services, your contract or 
purchase agreement must clearly break out costs for eligible services 
from those for ineligible services.'' Although SLD reduces a funding 
request to exclude the cost of ineligible services in circumstances 
where the ineligible services represent less than 30 percent of the 
total funding request, SLD will deny a funding request in its entirety 
if ineligible services constitute 30 percent or more of the total. An 
applicant can avoid denial by subtracting out, at the time of its 
initial application, the cost of ineligible services.
    4. At issue is Funding Request Number (FRN) 481380, which sought 
discounted internal connections at a pre-discount cost of $62,850.00. 
Documentation provided with the application indicated that this cost 
included $14,750 for 11 PC Cards, $29,900 for a wireless LAN, and 
$18,200 for installation. During its review process, SLD contacted 
Lunenburg for more information on the PC Cards, and based on this 
information, determined that they were ineligible for discounts. On 
April 27, 2001, SLD issued a funding commitment decision letter denying 
FRN 481380 on the grounds that ``30% or more of this FRN includes a 
request for Aironet 4800 pc cards which is an ineligible product based 
on program rules.'' Lunenburg then filed a request for review with the 
Commission.
    5. In its Request for Review, Lunenburg argued that the purchase 
cost of the PC Cards was $14,750.00 of the total funding request amount 
of $62,850.00, and thus only 23.47%. However, the Bureau noted that, in 
addition to the purchase of equipment, the funding request also sought 
discounts on installation costs. The Bureau found that, in the absence 
of evidence in the record indicating to the contrary, the cost of the 
ineligible components included a proportional amount of the overall 
installation costs associated with the funding request. With a 
proportional amount of the installation costs included, the Bureau 
found that the cost of ineligible services was 33% of the total. Thus, 
the Bureau held that the funding request was properly denied in its 
entirety under SLD's 30% policy.
    6. To support its application for review before the Commission, 
Lunenburg offers three arguments. First, it asserts that wireless 
antennas that are a small component of the PC Cards (which Lunenberg 
now refers to as Network Interface Cards (NI Cards)) are in fact 
eligible for discounts. Lunenburg asserts that when the cost for the 
antenna on each NI Card is subtracted from the overall NI Card cost, 
the total ineligible cost is less than 30% of the funding request. 
Second, Lunenburg asserts that there was no installation cost 
associated with the NI Card, because these components would be 
installed and configured by school staff. Third, it asserts that it has 
a high poverty rate and that funding is critical in order for it to 
bring telecommunications and Internet access to its students.
    7. Lunenburg did not present any of these arguments to the Bureau 
in its request for review. Section 1.115(c) of the Commission's rules 
provides that ``[n]o application for review will be granted if it 
relies on questions of fact or law upon which the designated authority 
has been afforded no opportunity to pass.'' The note to Sec.  1.115(c) 
states that ``new questions of fact or law may be presented to the 
designated authority in a petition for reconsideration.''
    8. In other circumstances, we have held that consideration of newly 
raised arguments in conjunction with an application for review is 
precluded by Sec.  1.115(c) of our rules. We recognize, however, that 
Lunenburg could not reasonably have known, when it submitted its 
request for review, that it needed to address the installation costs, 
because the Funding Commitment decision letter did not indicate that a 
portion of the installation costs were being found ineligible. 
Lunenburg was not apprised of the presumed ineligibility of a portion 
of the installation costs until the release of the Bureau Order. We 
therefore find that there is good cause to waive Sec.  1.115(c) of our 
rules given these circumstances and that the facts are not in dispute. 
In the future, however, we urge applicants to present these types of 
arguments to the Bureau in a petition for reconsideration in the first 
instance. We caution that similar situations may not rise to the level 
of good cause justifying waiver of our rules.
    9. In light of Lunenburg's explanation that the installation costs 
are entirely attributable to the wireless LAN, which is eligible for 
discounts under the program, we find that the ineligible portion of the 
request consisting of the $14,750 cost of the NI Cards is less than 30% 
of the $62,850 cost of the request. Because the ineligible portion is 
less than 30% of the request, under SLD's procedure, the eligible 
portion should be funded. Therefore, we grant the application for 
review and remand this application to SLD to fund the eligible portion 
of the request.
    10. It is ordered, pursuant to section 5(c)(5) of the 
Communications Act of 1934, as amended, that the application for review 
filed by Lunenburg County Public Schools, Victoria, Virginia, on April 
3, 2002 is granted, and this application is remanded to SLD for further 
action consistent with this Order.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 03-1176 Filed 1-17-03; 8:45 am]
BILLING CODE 6712-01-P