**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  | CC Docket No. 96-45          |
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| Federal-State Joint Board on     | ** |                              |
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| Children's Internet Protection   | *) |                              |
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**ORDER**

**Adopted: June 28, 2002 Released: June 28, 2002**

By the Commission:

1.  In this Order, we adopt interim measures to ensure that our
    implementation of the Children's Internet Protection Act (CIPA)
    complies with the recent decision issued by a three-judge panel in
    the United States District Court for the Eastern District of
    Pennsylvania (hereinafter, the court).[^1] In its decision, the
    court held, *inter alia*, that section 1721(b) of the CIPA,[^2] a
    provision imposing specific conditions on libraries seeking
    discounts under the schools and libraries universal service support
    mechanism, was facially unconstitutional.[^3] The court specifically
    enjoined the Commission from withholding federal funds from any
    public library for failure to comply with the requirements of the
    provision.[^4]

2.  In keeping with the court's injunction, we suspend enforcement of
    those portions of section 54.520 of our rules implementing section
    254(h)(6),[^5] pending final judicial action.[^6] We adopt certain
    specific measures to ensure that libraries that have applied for
    discounted telecommunications, Internet access, or internal
    connections services under the support mechanism are not denied such
    discounts because of lack of compliance with the CIPA requirements
    that have been declared unconstitutional and suspend enforcement of
    our rules pending action by the Supreme Court. We direct the
    Universal Service Administrative Company (Administrator) in
    consultation with the Wireline Competition Bureau (Bureau) to
    implement the necessary procedural changes, including changes to the
    current CIPA-related certifications required of applicants. We take
    these steps to respond promptly to the court's mandate and to ensure
    that the schools and libraries universal service support mechanism
    continues to operate in accordance with federal law.

# BACKGROUND

## The Schools and Libraries Universal Service Mechanism

3.  Pursuant to section 254 of the Act, the Commission established the
    schools and libraries universal service support mechanism.[^7] Under
    that mechanism, eligible schools and libraries and consortia that
    include eligible schools and libraries (collectively, recipients)
    may receive eligible telecommunications, Internet access, and
    internal connections services at discounted rates.[^8] Eligible
    entities must apply to receive such discounts on an annual basis,
    with the funding year extending from July 1 to June 30.[^9]

4.  The Schools and Libraries Division (SLD) of the Universal Service
    Administrative Company (Administrator) administers the schools and
    libraries support mechanism under the direction of the
    Commission.[^10] After an applicant for discounted services under
    the schools and libraries support mechanism has entered into
    agreements for eligible services with one or more service providers,
    it must file with SLD an FCC Form 471 application.[^11] The FCC Form
    471 notifies SLD of the services that have been ordered and supplies
    an estimate of funds needed to cover the discounts to be given for
    eligible services.[^12] SLD then issues a funding commitment
    decision letter indicating the discounts, if any, to which the
    applicant is entitled. After the funding year begins and the
    discounted service commences, the approved recipient of discounted
    services submits to SLD an FCC Form 486, which indicates that the
    service has begun and specifies the service start date.[^13] After
    receiving the FCC Form 486, SLD will accept invoices from the
    service provider and issue disbursements to the provider in
    cumulative amounts up to the amount of the discount awarded.[^14]

5.  Beginning in Funding Year 2001,[^15] which extended from July 1,
    2001 to June 30, 2002, applicants have been required to mail their
    FCC Forms 486 within 120 days of the start of their service or the
    date of the funding commitment decision letter, whichever is later,
    in order to receive retroactive funding of discounts going back to
    the service start date.[^16] Where FCC Forms 486 are postmarked
    after the relevant 120 day period, the service start date for
    funding purposes is treated as the date 120 days before the postmark
    date rather than the actual start date.[^17] The 120 day rule
    encourages applicants to take the necessary actions to commence the
    billing process, which, in turn, allows the program to maximize the
    efficient use of the allotted funds.

## CIPA

6.  With the passage of CIPA, Congress amended section 254 of the Act,
    imposing new conditions on schools and libraries that "hav\[e\]
    computers with Internet access" and request discounted services
    under the schools and libraries universal service support
    mechanism.[^18] Under section 254(h)(6), no library may receive
    universal service discounts unless the authority with responsibility
    for administration of the library makes certain certifications, and
    ensures the use of such computers in accordance with the
    certifications.[^19]

7.  Congress established the conditions on the use of computers with
    Internet access in two separate acts, CIPA, which added sections
    254(h)(5) and (h)(6), and the Neighborhood Children's Internet
    Protection Act (NCIPA), which added section 254(l).[^20] Under
    section 254(h)(6), which governs libraries, applicants are required
    to certify that they are enforcing a policy of Internet safety as
    defined in NCIPA, and that their policy of Internet safety also
    includes the use of a "technology protection measure," colloquially
    referred to as a software filter, that is in accordance with
    requirements specified in the CIPA provisions.[^21] Under NCIPA,
    codified at 254(h)(l), libraries are required to adopt and implement
    an Internet safety policy that addresses (1) access by minors to
    inappropriate material on the Internet, (2) the safety and security
    of minors when using electronic communications, (3) unauthorized
    access, (4) unauthorized disclosure, use, and dissemination of
    personal identification information regarding minors; and (5)
    measures designed to restrict minors' access to material harmful to
    minors.[^22]

8.  To implement these new provisions, the Commission issued the *CIPA
    Order*, which, *inter alia*, added new certifications for CIPA and
    NCIPA to the FCC Form 486 beginning in Funding Year 2001.[^23] In
    cases of consortium applicants, the Commission put the
    certifications on a new FCC Form 479, which must be completed by
    each of the consortium members and then collected and retained by
    the consortium leader.[^24] The Commission also amended its rules,
    adding the CIPA requirements at section 54.520.[^25]

9.  In accordance with CIPA's requirement that applicants in Funding
    Year 2001 make their certifications within 120 days of the start of
    the funding year, the Commission added an additional deadline to the
    normal 120 day rule for FCC Forms 486. Under CIPA, Funding Year 2001
    applicants were required to file their FCC Forms 486 by no later
    than October 28, 2001 unless their service began after that date or
    a funding commitment decision letter issued after that date.[^26] A
    Funding Year 2001 applicant with a funding commitment decision
    letter who failed to meet the October 28, 2001 deadline could obtain
    discounts only for services received on or after the date that its
    FCC Form 486 was postmarked.[^27]

10. In *American Library Association*, the court held that requiring
    public libraries to use filtering technology violated the First
    Amendment of the United States Constitution.[^28] It therefore
    issued an order on May 31, 2002 holding section 254(h)(6), the
    section of CIPA requiring libraries to use such filtering, facially
    unconstitutional and permanently enjoining the Commission from
    withholding federal funds from any public library for failure to
    comply with the provision.[^29]

# DISCUSSION

11. The court has determined that section 254(h)(6), which requires
    libraries to use Internet software filters, is facially
    unconstitutional.[^30] The court has enjoined the Commission from
    withholding funds from any public library for failure to comply with
    section 254(h)(6).[^31] We recognize the importance of providing
    certainty and stability to applicants, both for Year 2001 funds and
    Year 2002 funds, pending final action by the Supreme Court in the
    *American Library Association* case. In particular, we recognize
    that both program recipients and the Administrator need fixed and
    predictable standards for determining eligibility for support under
    this universal service support mechanism.[^32] Thus, in order to
    comply with the court's order and with our mandate that universal
    service be specific and predictable, we take the following actions.

12. Pending Supreme Court action in the *American Libraries Association*
    case, we suspend enforcement of those sections of 54.520 of our
    rules which were adopted to implement section 254(h)(6).
    Specifically, we suspend enforcement of §§ 54.520(c)(2)(i) and
    (iii), 54.520(c)(3), and 54.520(d) as they apply to all libraries,
    to the extent that these provisions require any library to filter or
    certify to such filtering under 47 U.S.C. § 254(h)(6). We further
    suspend enforcement of § 54.520(g)(1) as it applies to all
    libraries. Suspension of these provisions is to comply with the
    court's mandate.

13. We suspend enforcement of section 254(h)(6) as against all library
    applicants. In its ordering clause, the court only enjoined the
    Commission from enforcing the requirements of section 254(h)(6)
    against public libraries.[^33] In the same ordering clause, however,
    the court held that section 254(h)(6) was facially
    unconstitutional.[^34] Section 254(h)(6) does not distinguish
    between different types of libraries, requiring all libraries to
    filter Internet access.[^35] Moreover, the court did not provide a
    clear distinction between public and private libraries. The court's
    decision is currently being appealed to the United States Supreme
    Court. Pending further Court action, as an interim approach, we will
    implement the court's order without distinguishing between public
    and private libraries.

14. In particular, we direct the Administrator, in consultation with the
    Bureau, to adopt measures to ensure that Funding Year 2001 library
    applicants will not be penalized for non-compliance with section
    254(h)(6).[^36] Such retroactive remedies are consistent with
    Supreme Court precedent for those Funding Year 2001 applicants that
    successfully challenged the CIPA law in court.[^37] However, we
    provide such relief more broadly in light of the large number of
    litigants in the *American Library Association* case (including all
    the members of the ALA and other organizations that participated in
    the litigation) and the resulting administrative difficulty in
    limiting relief to litigants only.[^38] Therefore, we direct the
    Administrator to take the following specific actions, and any other
    actions necessary to effectuate the principle that library
    applicants not be penalized for non-compliance with section
    254(h)(6).

15. First, some Funding Year 2001 library applicants did not file an FCC
    Form 486 at all, in part due to the pendency of the litigation and
    the uncertainty over the resolution of that case. SLD shall accept
    without penalty all FCC Forms 486 for a period lasting 120 days from
    the release date of this Order or the release date of a funding
    commitment decision letter, whichever is later. If a library
    applicant files an FCC Form 486 after that period, the normal 120
    day rule shall be applied to the applicant's service requests,
    limiting funding to services received on or after the date 120 days
    prior to the postmark of the FCC Form 486.

16. Second, for those Funding Year 2001 library applicants that filed an
    FCC Form 486 after the October 28, 2001 deadline, SLD shall not
    apply any penalty for having missed the October 28, 2001 deadline,
    but such FCC Forms 486 shall still be subject to the normal 120 day
    rule.

17. Third, for those Funding Year 2001 library applicants that filed an
    FCC Form 486 by October 28, 2001 without completing the CIPA
    certifications, SLD shall accept these forms and process them
    without penalty for the lack of certification.[^39]

18. Fourth, SLD shall determine if there are consortia applicants that
    include library members and that either filed their FCC Forms 486
    late or reduced the shared discount rate requested by eliminating
    the library members through an FCC Form 500.[^40] In the former
    case, SLD shall deal with these consortia in a manner consistent
    with the measures specified above. In the latter case, the consortia
    shall be given an opportunity, within 120 days of the release date
    of this Order, to request funded discounts at the original rate
    requested.

19. The Funding Year 2001 measures specified above shall be taken only
    for library applicants. The court's decision does not address the
    constitutionality of the CIPA requirements as they apply to schools.
    Therefore, all of the CIPA requirements as codified at sections
    254(h)(5) and 254(l) and implemented in the *CIPA Order* remain in
    effect for schools. This includes schools that are members of
    consortia, including consortia comprised of both schools and
    libraries.

20. In addition, because the court's decision holds invalid only the
    filtering requirements set forth in section 254(h)(6) and does not
    address the validity of section 254(l), section 254(l) remains in
    effect with respect to libraries. In the *CIPA Order*, we determined
    that libraries that only receive telecommunications service
    discounts are excluded from all of the requirements of section
    254(l).[^41] Nothing in the court's order affects this
    determination. Therefore, libraries receiving only discounts on
    telecommunications services are not required to certify under
    section 254(l) concerning an Internet safety policy. However, those
    libraries that receive discounts on Internet access or internal
    connections must still certify to compliance with section 254(l).
    Because the current FCC Form 486 and FCC Form 479 do not permit
    library applicants to certify to compliance only with section 254(l)
    without also certifying to compliance with section 254(h)(6), a
    change in these forms will be necessary so that libraries may
    certify to compliance with section 254(l) only. We therefore direct
    the Administrator, in consultation with the Bureau, to make any
    changes necessary to the procedures and to FCC Form 486 and FCC Form
    479 consistent with this Order and the court's decision.

21. Accordingly, IT IS ORDERED that, pursuant to the authority of
    sections 1-5 and 254 of the Communications Act of 1934, as amended,
    47 U.S.C. §§ 151-155, and 254, and the Children's Internet
    Protection Act, Pub. L. 106-554 §§ 1701 *et seq.* as codified at 47
    U.S.C. § 254(h) and (l), this Order is ADOPTED. The modifications to
    a collection of information contained within this Report and Order
    is contingent upon approval by the Office of Management and Budget.

22. IT IS FURTHER ORDERED that enforcement of sections 54.520(c)(2)(i)
    and (iii), 54.520(c)(3), 54.520(d), and 54.520(g)(1) of the
    Commission's rules, 47 C.F.R. § 54.520, as they apply to all
    libraries and to the extent that they require any library to filter
    or certify to such filtering under 47 U.S.C. § 254(h)(6), is
    SUSPENDED consistent with the terms of this Order.

23. IT IS FURTHER ORDERED that AUTHORITY IS DELEGATED to the CHIEF OF
    THE WIRELINE COMPETITION BUREAU pursuant to section 5(c) of the
    Communications Act of 1934, 47 U.S.C. § 155(c), to modify any forms
    that are necessary to implement the decisions adopted in this Order.

24. IT IS FURTHER ORDERED that THIS ORDER IS EFFECTIVE UPON PUBLICATION
    IN THE FEDERAL REGISTER. Good cause exists to make this effective
    immediately upon publication in the Federal Register. The actions we
    take in this Order are intended to bring implementation of the CIPA
    into compliance with the judgment of the federal court. It is
    necessary that this Order take effect as soon as possible in order
    to best fulfill this purpose.

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

    Secretary

[^1]: *American Library Association, Inc. v. United States*, Nos. CIV.A.
    01-1303, CIV.A. 01-1322, 2002 WL 1126046 (E.D. Penn. May 31, 2002)
    (*American Library Association*).

[^2]: Pub. L. No. 106-554, § 1721(b), codified at 47 U.S.C. § 254(h)(6).

[^3]: *American Library Association*, 2002 WL 1126046, \*7.

[^4]: *American Library Association*, 2002 WL 1126046, \*85. Section
    254(h)(5), which imposes filtering requirements on schools, has not
    been challenged, and remains in effect.

[^5]: We find good cause to issue this Order without notice and comment
    rulemaking. The actions we take in this Order are intended to bring
    implementation of the CIPA into compliance with the judgment of the
    federal court. Because the court declared section 254(h)(6)
    unconstitutional and because of the need to implement the court's
    judgment quickly, we find notice and comment unnecessary and
    impractical. Because Funding Year 2002 begins July 1, 2002, quick
    action is necessary to inform libraries of their obligations and
    implement such changes.

[^6]: We note that section 1741 of CIPA provides for review of a
    decision finding any provision of CIPA unconstitutional "as a matter
    of right by direct appeal to the Supreme Court." Appeal is now
    pending before the Supreme Court.

[^7]: *Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Report and Order, 12 FCC Rcd 8776 (1997) (*Universal Service
    Order*), as corrected by *Federal‑State Joint Board on Universal
    Service*, CC Docket No. 96‑45, Errata, FCC 97‑157 (rel. June 4,
    1997), *affirmed in part*, *Texas Office of Public Utility Counsel
    v. FCC*, 183 F.3d 393 (5th Cir. 1999) (affirming *Universal Service
    Order* in part and reversing and remanding on unrelated grounds),
    *cert. denied, Celpage, Inc. v. FCC*, 120 S. Ct. 2212 (May 30,
    2000), *cert. denied,* *AT&T Corp. v. Cincinnati Bell Tel. Co*., 120
    S. Ct. 2237 (June 5, 2000*), cert. dismissed,* *GTE Service Corp. v.
    FCC*, 121 S. Ct. 423 (November 2, 2000).

[^8]: 47 C.F.R. §§ 54.502, 54.503.

[^9]: *Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Fifth Order on Reconsideration and Fourth Report and Order in
    CC Docket No. 96-45, 13 FCC Rcd 14915 (1998).

[^10]: *Changes to the Board of Directors of the National Exchange
    Carrier Association, Inc., Federal-State Joint Board on Universal
    Service*, CC Docket Nos. 97-21 and 96-45, Third Report and Order in
    CC Docket No. 97-21 and Fourth Order on Reconsideration in CC Docket
    No. 97-21 and Eighth Order on Reconsideration in CC Docket No.
    96-45, 13 FCC Rcd 25058 (1998)*.*

[^11]: *See* Schools and Libraries Universal Service, Services Ordered
    and Certification Form, OMB 3060-0806 (October 2000) (FCC Form 471).

[^12]: 47 C.F.R. § 54.504(c).

[^13]: Schools and Libraries Universal Service, Receipt of Service
    Confirmation Form, OMB 3060-0853 (July 2001) (FCC Form 486);
    Instructions for Completing the Schools and Libraries Universal
    Service, Receipt of Service Confirmation Form (FCC Form 486), OMB
    3060-0853 (July 2001) (Form 486 Instructions). In addition, an early
    filing option exists for Funding Year 2001 applicants whose services
    begin on or before October 28, 2001 and for applicants in subsequent
    funding years whose services begin on or before July 1of the funding
    year. *See* FCC form 486.

[^14]: *See* FCC Form 486; Form 486 Instructions.

[^15]: In prior years, this funding period was referred to as Funding
    Year 4. Funding periods are now described by the year in which the
    funding period starts. Thus the funding period which begins on July
    1, 2001 and ends on June 30, 2002, previously known as Funding Year
    4, is now called Funding Year 2001. The funding period which begins
    on July 1, 2002 and ends on June 30, 2003 is now known as Funding
    Year 2002, and so on.

[^16]: Form 486 Instructions at 7.

[^17]: *Id.* at 9, 10, 12. SLD has two procedures for disbursement of
    funds upon receiving an invoice, depending on whether the applicant
    has paid the discounted price or the full price. If the applicant
    has paid the discounted price for the service, SLD simply reimburses
    the provider in the amount of the discount. If the applicant has
    paid the full price of the service, SLD disburses the discounted
    share to the provider with the requirement that the provider then
    remit the amount to the applicant. *See* Form 486 Instructions at 4;
    SLD web site, Form 472 BEAR Filing Guidance (April 27, 2001)
    \<<http://www.sl.universalservice.org/reference/8bear.asp>\>;
    Schools and Libraries Universal Service, Billed Entity Applicant
    Reimbursement Form, OMB 3060-0856 (October 1998) (FCC Form 472). In
    both cases, however, SLD will not provide payment for invoices until
    it receives an FCC Form 486 from the applicant indicating that the
    service has started. Form 486 Instructions at 3.

[^18]: 47 U.S.C. § 254(h)(5)(A), (6)(A). As explained below at paragraph
    19, section 254(h)(5)(A), the codified provision relating to
    schools, has not been challenged as unconstitutional and thus
    remains in effect for all participating schools.

[^19]: Hereinafter we will refer collectively to all of the persons
    specified in the statute as responsible for making these
    certifications on behalf of participating schools and libraries as
    "entities." In the case of a library, certifying entities include a
    "library, library board, or other authority with responsibility for
    administration of a library." *See, e.g.,* 47 U.S.C. §
    254(h)(6)(A)(i).

[^20]: *See* Neighborhood Children's Internet Protection Act (NCIPA),
    Pub. L. 106-554 §§ 1731 *et seq.*

[^21]: 47 U.S.C. §§ 254(h)(5), 254(h)(6). These software filters are
    designed to block access to Internet sites containing sexually
    explicit or otherwise objectionable material. *See* *American
    Library Association*, 2002 WL 1126046, \*23-26.

[^22]: *See* NCIPA, Pub. L. 106-554 § 1732, codified at 47 U.S.C. §
    254(l).

[^23]: *See* *Federal-State Joint Board on Universal Service, Children's
    Internet Protection Act*, CC Docket No. 96-45, Report and Order, 16
    FCC Rcd 8182 (2001) (*CIPA Order*); 47 C.F.R. § 54.520.

[^24]: *CIPA Order*, 16 FCC Rcd at 8194, para. 25.

[^25]: 47 C.F.R. § 54.520.

[^26]: 47 U.S.C. §§ 254(h)(5)(E), 254(h)(6)(E); *CIPA Order*, 16 FCC Rcd
    at 8188-89, 8191, paras. 10, 18.

[^27]: *See* Form 486 Instructions at 9.

[^28]: *American Library Association*, 2002 WL 1126046, \*1.

[^29]: *Id.*, 2002 WL 1126046, \*85.

[^30]: *American Library Association*, 2002 WL 1126046, \*7 ("For these
    reasons, we will enter an Order declaring . . . 47 U.S.C. §
    254(h)(6) . . . to be facially invalid under the First Amendment and
    permanently enjoining the defendants from enforcing those
    provisions.").

[^31]: *American Library Association*, 2002 WL 1126046, \*85.

[^32]: *See* *Bennett v. New Jersey*, 470 U.S. 632, 638 (1985)
    ("practical considerations related to the administration of federal
    grant programs imply that obligations generally should be determined
    by reference to the law in effect when the grants were made.").

[^33]: *See* *American Library Association*, 2002 WL 1126046, \*85.

[^34]: *Id.*

[^35]: 47 U.S.C. § 254(h)(6)(A).

[^36]: We note that administration of Funding Year 2001 is ongoing.
    While applicants file applications prior to the commencement of the
    actual funding year, the process of reviewing applications, issuing
    funding commitments, authorizing disbursement of funds, and
    returning unused funds typically extends beyond a particular funding
    year.

[^37]: *See* *Reynolds Casket Co. v. Hyde*, 514 U.S. 749, 752 (1995).

[^38]: *Cf.* *Petition for Refund of Fees*, Memorandum Opinion and
    Order*,* 50 FCC 2d 730 (1975) (Robinson, concurring) (noting that,
    following successful challenge to cable fees by National Cable
    Television Association (NCTA), refund of cable fees was granted to
    non-litigants, those cable companies that were not members of NCTA,
    as well as litigants, because "distinguishing these two classes of
    cable operators is not practicable . . . .").

[^39]: In Funding Year 2001, upon receiving an FCC Form 486 that had no
    certification block completed, SLD rejected the form as incomplete
    and returned it to the applicant. In certain cases, applicants
    completed the form, checking a certification. Some of these
    applicants, however, returned the completed FCC Form 486 after the
    October 28, 2001 deadline. SLD shall not apply any penalty for
    having missed the October 28, 2001 deadline but such forms shall
    still be subject to the normal 120 day rule.

[^40]: *See* Schools and Libraries Universal Service, Adjustment to
    Funding Commitment and Modification to Receipt of Service
    Confirmation Form, OMB 3060- 0853 (April 2000) (FCC Form 500).
    Applicants that seek to reduce or eliminate a funding request after
    they have received a funding commitment from SLD must file an FCC
    Form 500.

[^41]: *See* *CIPA Order*, 16 FCC Rcd at 8196, para. 28.