**DA 03-1731**

**WIRELINE COMPETITION BUREAU SEEKS COMMENT ON A PETITION BY PUERTO RICO
DEPARTMENT OF EDUCATION TO RELEASE FUNDS ASSOCIATED WITH SCHOOLS AND
LIBRARIES UNIVERSAL SERVICE SUPPORT MECHANISM FOR FUNDING YEARS 2001 AND
2002**

**PLEADING CYCLE ESTABLISHED**

**CC Docket No. 02-6**

**Release Date: May 16, 2003**

**Comment Date: May 28, 2003 Reply Comment Date: June 4, 2003**

The Wireline Competition Bureau (Bureau) seeks comment on the Request
for Relief of Puerto Rico Department of Education (PRDOE) to authorize
commitment and disbursement of funds for funding years 2001 and
2002.[^1]

In the fall of 2000, the Universal Service Administrative Company (USAC)
determined from a beneficiary audit that there were irregularities with
PRDOE's E-rate funding commitments for funding year 1998.[^2] Subsequent
investigations revealed problems with funding years 1999-2000.[^3] Since
that determination, USAC has made no further disbursements on funding
years 1998, 1999, and 2000.[^4] Pending completion of the
investigations, USAC has held PRDOE's applications for funding year 2001
and funding year 2002 without action.

In the fall of 2000, general elections resulted in a change of
administration for the Commonwealth of Puerto Rico. The new
administration instituted an independent review of the status of PRDOE's
E-rate projects.[^5] PRDOE asserts that it received a preliminary report
in September 2001 and a final report in March 2002 from its independent
consultant regarding the status of its E-rate program, and has
undertaken corrective measures. A number of vendors provided service to
PRDOE during funding years 2001-2002, but have not received payment.

Meanwhile, in December 2001, USAC requested additional information from
PRDOE. In January 2002, PRDOE responded to the request. PRDOE made
additional presentations to USAC in April 2002 and October 2002.
Subsequently, PRDOE formally requested that the Commission authorize
USAC to release funding for funding years 2001 and 2002.[^6]

In its Request for Relief, PRDOE pledges to continue to cooperate with
investigations of funding years 1998-2000.[^7] It indicates that since
so much time has elapsed since submitting its request for funding years
2001 and 2002, it may need to request service substitutions if those
funds are released and that it will review those requests to ensure
compliance with program rules. It commits to periodically retain an
external independent professional firm to evaluate the operational
aspects of its E-rate projects and future use of E-rate funds.[^8] PRDOE
also states that it is committed to complying with all applicable local
and federal laws.[^9]

In the spring of 2003, the Commission was notified that a losing bidder
challenged PRDOE's award of its funding year 2003 contract in Puerto
Rico.[^10] Specifically, the losing bidder alleged that an employee of a
company associated with the winning bid was involved in PRDOE's
selection process.[^11] SLD is currently investigating these allegations
to determine if any program rules were violated.

We seek comment on PRDOE's Request for Relief and whether, in light of
ongoing investigations for funding years 1998, 1999, 2000, and 2003,
issuing such an order authorizing USAC to commit and disburse funds for
funding years 2001 and 2002 would be consistent with the public
interest. We seek comment on what actions, if any, the Commission should
take to ensure that funds are awarded and spent appropriately.

Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47
C.F.R. §§ 1.415, 1.419, interested parties may file comments on or
before May 28, 2003, and reply comments on or before June 4, 2003.
Comments may be filed using the Commission's Electronic Comment Filing
System (ECFS) or by filing paper copies.[^12]

Comments filed through the ECFS can be sent as an electronic file via
the Internet to \<http://www.fcc.gov/e-file/ecfs.html\>. Generally, only
one copy of an electronic submission must be filed. If multiple docket
or rulemaking numbers appear in the caption of this proceeding, however,
commenters must transmit one electronic copy of the comments to each
docket or rulemaking number referenced in the caption. In completing the
transmittal screen, commenters should include their full name, U.S.
Postal Service mailing address, and the applicable docket or rulemaking
number. Parties may also submit an electronic comment by Internet
e-mail. To get fling instructions for e-mail comments, commenters should
send an e-mail to \<ecfs@fcc.gov\>, and should include the following
words in the body of the message, "get form \<your e-mail address\>." A
sample form and directions will be sent in reply.

Parties who choose to file by paper must file an original and four
copies of each filing. If more than one docket or rulemaking number
appears in the caption of this proceeding, commenters must submit two
additional copies for each additional docket or rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail (although we continue to experience delays in receiving U.S. Postal
Service mail). The Commission's contractor, Vistronix, Inc., will
receive hand-delivered or messenger-delivered paper filings for the
Commission's Secretary at 236 Massachusetts Avenue, N.E., Suite 110,
Washington, D.C. 20002. The filing hours at this location are 8:00 a.m.
to 7:00 p.m. All hand deliveries must be held together with rubber bands
or fasteners. Any envelopes must be disposed of before entering the
building. Commercial overnight mail (other then U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive,
Capitol Heights, MD 20743. U.S. Postal Service first-class mail, Express
Mail, and Priority Mail should be addressed to 445 12^th^ Street, SW,
Washington, D.C. 20554. All filings must be addressed to the
Commission's Secretary, Marlene H. Dortch, Office of the Secretary,
Federal Communications Commission.

Parties also must send three paper copies of their filing to Sheryl
Todd, Telecommunications Access Policy Division, Wireline Competition
Bureau, Federal Communications Commission, 445 12^th^ Street, S.W., Room
5-B540, Washington, D.C. 20554. In addition, commenters must send
diskette copies to the Commission's copy contractor, Qualex
International, Portals II, 445 12^th^ Street, S.W., Room CY-B402,
Washington, D.C. 20054.

Pursuant to section 1.1206 of the Commission's rules, 47 C.F.R. §
1.1206, this proceeding will be conducted as a permit-but-disclose
proceeding in which *ex parte* communications are permitted subject to
disclosure.

For further information, contact Greg Lipscomb, Telecommunications
Access Policy Division, Wireline Competition Bureau at (202) 418-7400,
TTY (202) 418-0484.

[^1]: Letter from Dr. Cesar Rey Hernandez, Secretary, Puerto Rico
    Department of Education to Jane Mago, General Counsel, Federal
    Communications Commission, dated January 30, 2003 (*Request for
    Relief*).

[^2]: *Request for Relief* at 4 & Exhibit I (Appendix B of Arthur
    Andersen Audit Report, dated October 17, 2001).

[^3]: Subsequent investigations, including analysis by PRDOE, have
    revealed additional problems with PRDOE's applications and/or E-rate
    projects for funding years 1998, 1999, and 2000, including
    competitive bidding violations, unaccounted for or missing
    equipment, Internet service to schools with no computers, and
    payments for service that was not provided or only partially
    provided. *See, e.g., Request for Relief* at Exhibit 3, Attachment
    at 4.

[^4]: *Request for Relief at Exhibit II* (Letter from George McDonald,
    USAC to PRDOE, dated December 5, 2001).

[^5]: *See PRDOE Request for Relief* at 2.

[^6]: *See Request for Relief*.

[^7]: *See* *id.* at 5-6.

[^8]: *Id*. at 6.

[^9]: *Id.* at 6.

[^10]: *Puerto Rico Telephone Company, Inc. v. Junta de Subastas
    Central-Departamento de Educacion*, No. \_\_\_\_\_\_, Solicitud de
    Reconsideración de Adjudicion de Subasta (Junta de Revision
    Administrativa Deparamento de Educación , filed February 14, 2003).

[^11]: *Id*. at 17-19

[^12]: *See Electronic Filing of Documents in Rulemaking Proceedings*,
    63 Fed. Reg. 24121 (1998).