[Federal Register Volume 69, Number 12 (Tuesday, January 20, 2004)]
[Notices]
[Pages 2715-2716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1124]


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FEDERAL COMMUNICATIONS COMMISSION

[CC Docket Numbers 96-45 and 97-21; FCC 03-314]


Request for Review of the Decision of the Universal Service 
Administrator by Winston-Salem/Forsyth County School District and IBM

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: In this document, the Commission grants the Requests for 
Review by Winston-Salem/Forsyth County School District, Winston-Salem, 
North Carolina and International Business Machines, Inc., and remands 
the Requests for Review to SLD for consideration.

DATES: The Commission's decisions on the Requests for Review addressed 
in this order were effective December 8, 2003.

FOR FURTHER INFORMATION CONTACT: Andy Firth, 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 December 8, 2003. 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.

I. Introduction

    1. In this Order, before the Commission are Requests for Review by 
Winston-Salem/Forsyth County School District, Winston-Salem, North 
Carolina (Winston-Salem), and International Business Machines, Inc. 
(IBM). This school and IBM seek review of decisions of the Schools and 
Libraries Division (SLD) of the Universal Service Administrative 
Company (Administrator) that denied Winston-Salem $16.7 million in 
discounts for internal connections from the universal service support 
mechanisms for schools and libraries for Funding Year 2002. For the 
reasons set forth below, we grant these Requests for Review, and remand 
to SLD for consideration in accordance with this Order.
    2. The Commission also releases the Ysleta Order, December 8, 2003, 
which addresses request for review by other applicants that also 
selected IBM as their service provider. In the Ysleta Order, the 
Commission finds that a number of schools in Funding Year 2002 engaged 
in various practices that violated one or more of our rules regarding 
competitive bidding, the weighting of price in selecting among bidders, 
and the submission of bona fide requests for services under this 
support mechanism. The Commission also concluded, however, that the 
circumstances of those applicants justified a waiver of our rules 
governing the Funding Year 2002 filing window, and allowed those 
applicants to re-bid for their requested services. As set forth below, 
we conclude that the facts presented in this case, unlike the cases 
that the Commission addresses in the Ysleta Order, do not support a 
denial of Winston-Salem's request for discounts under the program.

II. Discussion

    3. We conclude, based on the record before us that SLD erred in 
denying the discounts requested by Winston-Salem. The grounds upon 
which we found rule violations in the Ysleta case are not present here.
    4. First, we cannot conclude that Winston-Salem violated our 
competitive bidding rules. Unlike the Ysleta Order, Winston-Salem did 
not issue any sort of RFP for a systems integrator prior to filing its 
FCC Form 471. It merely posted a request for bids for eligible services 
on FCC Form 470. While we are troubled that it utilized an overly broad 
FCC Form 470, that is not, in itself, a basis for denying its requests 
for discounts. In the Ysleta Order, we clarified that the requirement 
for a bona fide request for services means that applicants must submit 
a list of specified services for which they anticipate they are likely 
to seek discounts, consistent with their technology plans; they may not 
list every service and product eligible for discounts under the schools 
and libraries support mechanism. At the same time, we recognized that 
past practices arguably could be construed as permitting broad FCC Form 
470, and therefore clarified this requirement prospectively.
    5. Second, we cannot conclude that Winston-Salem failed to properly 
consider price when selecting its service provider because only one 
party responded to its posted FCC Form 470. Its decision to enter into 
a contract with the one bidder is no different than the thousands of 
other applicants who receive either no bids, or only one bid, in 
response to a FCC Form 470 posting. Our rules require applicants to 
seek competitive bids; they do not require an applicant to have 
competing bidders where none appear. While we find it unusual, given 
the size of Winston-Salem's proposed project, that no other entity 
submitted a bid, this alone, without more, cannot be the basis for 
denying Winston-Salem's request for review. We note, however, that this 
case demonstrates how an overly broad FCC Form 470 posting may well 
stifle competition among service providers. In the Ysleta Order, we 
clarify that prospectively such a broad FCC Form 470 is not consistent 
with our rules.
    6. Finally, we note that in its Request for Review, Winston-Salem 
describes in detail the process it employed to select a Systems 
Integrator, to demonstrate that Winston-Salem is committed to utilizing 
a fully competitive selection process for the award of its contracts. 
We find that Winston-Salem's

[[Page 2716]]

procedures for selecting Eperitus as a Systems Integrator are not 
relevant to our decision here, because it did not seek discounts on any 
services provided by Eperitus, and the services provided by Eperitus 
were outside the scope of the E-rate program.
    7. Therefore, we grant the above-captioned Requests for Review and 
remand the Winston-Salem application to SLD. In doing so, we emphasize 
that we make no determination as to whether the applicant is ultimately 
entitled to any funding, as SLD must scrutinize all applications for 
ineligible services and compliance with all program rules, including 
all prospective clarifications enunciated in the Ysleta Order.

III. Ordering Clause

    8. Pursuant to Sec.  54.722(a) of the Commission's rules, that the 
above-captioned Requests for Review are granted to the extent provided 
herein and remanded to SLD for further processing in accordance with 
this Order.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 04-1124 Filed 1-16-04; 8:45 am]
BILLING CODE 6712-01-P