**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | SLD-119643                   |
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| Request for Review of Decisions  | ) | CC Docket No. 96-45          |
| of the                           | * |                              |
|                                  | * | CC Docket No. 97-21          |
| Universal Service Administrator  |   |                              |
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| Bethlehem Temple Christian       | ) |                              |
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| Duquesne, Pennsylvania           |   |                              |
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| Federal-State Joint Board        | * |                              |
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| on Universal Service             | * |                              |
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**ORDER**

**Adopted: April 5, 2001 Released: April 6, 2001**

By the Common Carrier Bureau:

1.  The Common Carrier Bureau (Bureau) has before it a Request for
    Review filed by Bethlehem Temple Christian School (BTCS), requesting
    review of a decision of the Schools and Libraries Division (SLD) of
    the Universal Service Administrative Company (Administrator).[^1] As
    further described below, the Bureau denies the instant Request for
    Review because BTCS failed to demonstrate in its application that it
    possessed the necessary resources to make effective use of the
    services for which it requested support. By denying this Request for
    Review, the Bureau advances the Commission's goal to prevent waste
    of universal service funds in the schools and libraries program.

2.  Under the schools and libraries universal service support mechanism,
    eligible schools, libraries, and consortia that include eligible
    schools and libraries, may apply for discounts on eligible
    telecommunications services, Internet access, and internal
    connections.[^2] Administration of the schools and libraries support
    mechanism is the responsibility of SLD, under the oversight of the
    Schools and Libraries Committee of USAC.[^3] The Commission\'s rules
    require that an applicant submit to the Administrator a completed
    FCC Form 470, in which the applicant sets forth the applicant's
    technological needs and the services for which it seeks
    discounts.[^4] Once the applicant has signed a contract for eligible
    services, it must file an FCC Form 471 application to notify the
    Administrator of the services that have been ordered, the carrier
    with whom the applicant has signed a contract, and an estimate of
    the funds needed to cover the discounted portion of the price of the
    eligible services.[^5]

3.  On the Form 470, applicants must attest that any support they
    receive is conditional upon their "securing access to all of the
    resources, including computers, training, software, maintenance, and
    electrical connections necessary to use the services purchased
    effectively."[^6] Similarly, on the Form 471, applicants must
    certify that they have secured access "to all of the resources,
    including computers, training, software, maintenance, and electrical
    connections necessary to make effective use of the services
    purchased as well as to pay the discounted charges for eligible
    services."[^7] These certifications are consistent with the
    requirements set forth in the Commission's May 8, 1997, *Universal
    Service Order* and the Commission's rules.[^8] In that order, the
    Commission stated that applicants for discounts under the schools
    and libraries universal service support mechanism would be required
    to certify in their requests for services that "all of the necessary
    funding in the current funding year has been budgeted and will have
    been approved to pay for the 'non-discount' portion of requested
    connections and services as well as any necessary hardware,
    software, and to undertake the necessary staff training required in
    time to use the services effectively . . . . "[^9] The Commission
    approved, in *United Talmudical Academy*, SLD's practice of
    reviewing the accuracy of applicants' certifications regarding
    necessary resources, concluding that, by so doing, SLD ensures
    compliance with statutory requirements and Commission rules and
    curbs waste, fraud, and abuse in the schools and libraries universal
    service mechanism.[^10]

4.  On April 5, 1999, an employee of Total Communications USA, a
    consulting firm, filed a Form 471 on BTCS's behalf requesting
    support for discounted telecommunications services, Internet access,
    and internal connections. BTCS's Form 471 indicated that fifty
    students attended school at its eleven-room building.[^11] The
    prediscount cost of the services requested by BTCS in that
    application totaled approximately \$268,000.[^12] BTCS requested
    support for the installation of ninety-six ports to network BTCS's
    computers, despite having only seventeen computers.[^13]

5.  SLD contacted BTCS to request further information regarding the
    services requested by BTCS in its application.[^14] The director of
    BTCS told SLD that she did not know why BTCS's consultant had
    requested support for the specific services listed on the Form
    471.[^15] BTCS subsequently provided to SLD a copy of a letter from
    Total Communications USA to BTCS indicating its understanding that
    BTCS could not afford the nondiscounted portion of the services
    requested.[^16] In the letter, Total Communications USA assured BTCS
    that it would secure grants to pay for BTCS's share of the costs,
    but BTCS never submitted any evidence to SLD that such grants had
    been obtained.[^17] A subsequent attempt by SLD to contact BTCS by
    telephone was unsuccessful.[^18] On November 9, 1999, SLD issued a
    funding commitment decision letter denying every funding request
    because "\[a\]pplicant has not provided sufficient documentation to
    determine the eligibility of this item."[^19] The instant letter of
    appeal was filed on December 8, 1999.

6.  As a threshold matter, we believe that BTCS's application raises
    serious concerns that BTCS inappropriately abdicated control over
    the application process to Total Communications USA. BTCS's
    application and its surrounding circumstances---including the
    ninety-six ports for BTCS's seventeen computers---also raise serious
    concerns that BTCS or Total Communications USA may have attempted to
    defraud the universal service fund or misrepresented facts to the
    Commission.[^20] Accordingly, we intend to investigate this matter
    further and take additional action as warranted.

7.  On the narrow issue before us on appeal, we conclude that BTCS did
    not demonstrate to SLD that it possessed the necessary resources to
    make effective use of the services for which it requested support.
    The record reflects that BTCS provided to SLD a letter from Total
    Communications USA indicating that BTCS had not secured the
    requisite financial resources to pay the nondiscounted cost of the
    services requested.[^21] Although Total Communications USA's letter
    indicates that Total Communications USA intended to secure grants on
    behalf of BTCS to pay those costs, BTCS did not provide to SLD any
    evidence that such grants had been secured.[^22] Moreover, nothing
    in the record before us indicates that BTCS had the necessary
    resources to make effective use of certain services requested, even
    if BTCS had been able to pay its nondiscounted share of the costs.
    For example, BTCS requested support for 96 ports for connecting
    computers to a network.[^23] The FCC Form 471 requires that the
    applicant certify that it possess the necessary resources,
    "including computers," to make effective use of the services
    requested.[^24] BTCS's request would, however, provide BTCS with
    more than five times as many computer ports as available
    computers.[^25] We find that neither BTCS nor Total Communications
    USA demonstrated to SLD that BTCS possessed the necessary resources
    to make effective use of the services for which it requested
    support. We, therefore, deny BTCS's request for review.

8.  ACCORDINGLY, IT IS ORDERED, pursuant to authority delegated under
    sections 0.91, 0.291, and 54.722(a) of the Commission\'s rules, 47
    C.F.R. §§ 0.91, 0.291, and 54.722(a), that the Request for Review
    filed by Bethlehem Temple Christian School, Duquesne, Pennsylvania,
    IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Carol E. Mattey

Deputy Chief, Common Carrier Bureau

[^1]: Letter from Benjamin J. Aron, Schwaninger & Associates, to Federal
    Communications Commission, filed December 8, 1999 (Request for
    Review).

[^2]: 47 C.F.R. §§ 54.502, 54.503.

[^3]: *See* 47 C.F.R. § 54.705(a)(1) (setting forth the functions of the
    Schools and Libraries Committee) *and* 47 C.F.R. § 54.701(g)(i)
    (directing the Administrator to establish the Schools and Libraries
    Division, and setting forth its functions); *see also* *Changes to
    the Board of Directors of the National Exchange Carrier Association,
    Inc. and 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).

[^4]: 47 C.F.R. § 54.504(b)(1), (b)(3). In submitting its FCC Form 470,
    an applicant is required to provide general information about the
    services for which it seeks discounts, *e.g*., number of phones that
    require service, number of dial-up connections necessary, as well as
    an assessment of the applicant\'s existing technology that may be
    necessary for the effective use of eligible services. *See* Schools
    and Libraries Universal Service, Description of Services Requested
    and Certification Form, OMB 3060-0806 (Form 470).

[^5]: 47 C.F.R. § 54.504(c); *see also* Schools and Libraries Universal
    Service, Services Ordered and Certification Form, OMB 3060-0806
    (Form 471).

[^6]: *See* Form 470 at Item 25.

[^7]: *See* Form 471 at Item 22.

[^8]: *Federal-State Joint Board on Universal Service,* CC Docket No.
    96-45, Report and Order, 12 FCC Rcd 8776, 9079, para. 577 (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 in Texas Office of Public
    Utility Counsel v. FCC*, 183 F.3d 393 (5^th^ Cir. 1999), *motion for
    stay granted in part* (Sept. 28, 1999), *petitions for rehearing and
    rehearing en banc denied* (Sept. 28, 1999) (affirming *Universal
    Service Order* in part and reversing and remanding on unrelated
    grounds), *cert. denied in Celpage, Inc. v*. *FCC*, 120 S.Ct. 2212
    (May 30, 2000), *cert. granted in GTE Service Corp. v. FCC*, 120
    S.Ct. 2214 (June 5, 2000), *cert. denied in 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). *See
    also* 47 C.F.R. § 54.504(b)(1) (requiring applicants to provide
    information about equipment, services, training and other facilities
    in place to make use of the services requested) *and* 47 C.F.R. §
    54.504(b)(2) (requiring that each applicant's FCC Form 470 certify
    that "all of the necessary funding in the current funding year has
    been budgeted and approved to pay for the 'non-discount' portion of
    requested connections and services as well as any necessary hardware
    or software, and to undertake the necessary staff training required
    to use the services effectively . . . "). These requirements are
    referred to collectively hereinafter as the "necessary resources
    certifications."

[^9]: *Universal Service Order*, 12 FCC Rcd at 9079, para. 577.

[^10]: *Request for Review of the Decision of the Universal Service
    Administrator by United Talmudical Academy*, *Federal-State Joint
    Board on Universal Service, Changes to the Board of Directors of the
    National Exchange Carrier Association, Inc.,* CC Docket Nos. 96-45,
    97-21, Order, 15 FCC Rcd 423 (2000) (*United Talmudical Academy)*.

[^11]: Form 471, Bethlehem Temple Christian School, filed April 5, 1999
    (BTCS Form 471).

[^12]: BTCS Form 471.

[^13]: BTCS Form 471.

[^14]: Letter from D. Scott Barash, Universal Service Administrative
    Company, to Federal Communications Commission, filed July 10, 2000
    (USAC Letter) at 1.

[^15]: USAC Letter at 1.

[^16]: Letter from Martin Schwarts, Total Communications USA, to Gloria
    McAlester, dated July 12, 1999 (Schwarts letter).

[^17]: Schwarts letter; USAC Letter at 1-2.

[^18]: USAC Letter at 2.

[^19]: Letter from Schools and Libraries Division, Universal Service
    Administrative Company, to Mosses Freedman, Bethlehem Temple
    Christian School, issued November 9, 1999 (Funding Commitment
    Decision Letter).

[^20]: FCC Form 471 and its instructions clearly state that the person
    signing the form is subject to sections 502 and 503(b) of Title 47
    of the United States Code, which provide penalties for willful
    violations of the Commission's rules. Form 471; Instructions for
    Completing the Schools and Libraries Universal Service Services
    Ordered and Certification Form (FCC Form 471) (December 1998). *See
    also* 47 C.F.R. § 1.17 (requiring truthfulness in statements and
    documents filed before the Commission).

[^21]: *See* Schwarts Letter.

[^22]: USAC Letter at 2.

[^23]: BTCS Form 471.

[^24]: FCC Form 471 at Item 22.

[^25]: *See* BTCS Form 471; Form 470 from Bethlehem Temple Christian
    School to Schools and Libraries Division, Universal Service
    Administrative Company.