**Before the**

**Federal Communications Commission**

**Washington, DC 20554**

In the Matter of )

)

Requests for Review of the )

Decisions of the )

Universal Service Administrator by )

)

Academia Discipulos de Cristo ) File Nos. SLD-358081, 358083, *et al*.

Bayamon, Puerto Rico, *et al.* )

)

Schools and Libraries Universal Service ) CC Docket No. 02-6

Support Mechanism )

**order**

**Adopted: August 15, 2006 Released: August 15, 2006**

By the Chief, Wireline Competition Bureau:

**I. INTRODUCTION**

1.  In this Order, we address 30 appeals of decisions by the Universal
    Service Administrative Company (USAC) denying 159 requests for
    funding from 30 participants in the schools and libraries universal
    service support mechanism.[^1] All of the decisions at issue involve
    the denial of funding on the ground that the underlying applications
    violated the Commission's competitive bidding requirements by
    failing to use price as the primary factor in the vendor selection
    process.[^2] As discussed below, in 29 instances, we find that the
    Petitioners complied with the Commission's competitive bidding
    requirements in place at the time of their applications. We
    therefore grant those appeals and remand the underlying applications
    to USAC for further action consistent with this Order. To ensure
    that the underlying applications are resolved expeditiously, we
    direct USAC to complete its review of each application listed in
    Appendices A and B and issue an award or a denial based on a
    complete review and analysis no later than 90 days from release of
    this Order. We also deny one appeal because the Petitioner failed to
    demonstrate that price was a primary factor in its vendor selection
    process.

## II. BACKGROUND

2.  [Competitive Bidding Requirements]{.underline}. Under the schools
    and libraries universal service support mechanism, commonly referred
    to as the E-rate program, eligible schools, libraries, and consortia
    that include eligible schools and libraries may apply for discounts
    for eligible telecommunications services, Internet access, and
    internal connections.[^3] After an applicant has entered into
    agreements for eligible services with one or more service providers,
    it must file an FCC Form 471 with USAC.[^4] The FCC Form 471
    notifies USAC of the services that have been ordered and supplies an
    estimate of funds requested for eligible services.[^5] USAC then
    issues a funding commitment decision letter indicating the funding,
    if any, that the applicant may receive.

3.  Applicants may purchase eligible services from "master contracts"
    negotiated by a third party such as a governmental entity.[^6] The
    third party initiating the master contract must comply with the
    Commission's competitive bidding requirements and state procurement
    laws. [^7] The applicant is not required to satisfy the competitive
    bidding requirements if it takes service from a master contract that
    either has been competitively bid or qualifies for the existing
    contract exemption.[^8] If a third party has negotiated a master
    contract without complying with the competitive bidding
    requirements, then the applicant must comply with the competitive
    bidding requirements before it may receive discounts or reduced
    rates for services purchased from that master contract.[^9]

4.  The Commission generally relies on state or local procurement
    regulations that include competitive bidding requirements as a means
    to ensure compliance with the Commission's competitive bidding
    requirements because such rules will likely consider price to be a
    primary factor, resulting in selection of the most cost-effective
    proposal.[^10] Absent evidence to the contrary in a particular case,
    we believe that compliance with state or local rules is generally
    sufficient to support a conclusion that a school has selected the
    most cost-effective bid for the requested services.[^11]

5.  Prior to Funding Year 2004, the Commission released only one order
    addressing an appeal of the requirement that price be a primary
    factor in selecting the winning bid.[^12] Specifically, in the
    *Tennessee Order*, released in 1999, the Commission determined that
    a competitive bidding process complies with program rules if price
    is taken into account during bid selection and the contract is
    awarded to the most cost-effective bidder.[^13] The Commission
    further concluded that other factors, such as prior experience,
    personnel qualifications, and management capability, also may form a
    reasonable basis on which to evaluate whether an offering is
    cost-effective.[^14]

6.  Four years later, after the conclusion of the Funding Year 2003
    competitive bidding process, the Commission released the *Ysleta
    Order* in which it revised the policies established in the
    *Tennessee Order*.[^15] In the *Ysleta Order*, the Commission
    concluded that price must be the primary factor in selecting a
    winning bid.[^16] This policy differs from the direction given in
    the *Tennessee Order* in that schools are now required to have a
    separate "cost category" when evaluating bids and that category must
    be given more weight than any other category.[^17] The Commission
    stated that if, for example, a school assigns 10 points to
    reputation and 10 points to past experience, the school would be
    required to assign at least 11 points to price.[^18] Because the
    *Ysleta Order* was released after the completion of Petitioners'
    competitive bidding processes, however, it is not applicable for the
    appeals addressed herein. We therefore look to the *Tennessee Order*
    for guidance.

7.  [Requests for Review]{.underline}. The Petitioners identified herein
    submitted FCC Form 470 applications to USAC to initiate the
    competitive bidding process for E-rate eligible services.[^19]
    Subsequently, Petitioners entered into contracts with their
    respective service providers and filed their FCC Form 471
    applications for Funding Year 2000, 2001, 2002, and 2003.[^20] USAC
    denied the Petitioners' applications on the ground that the
    documentation provided by Petitioners during the selective review
    process demonstrated that price was not the primary factor in
    selecting their respective service providers.[^21] USAC later
    affirmed these decisions on appeal.[^22] Petitioners then filed the
    instant Requests for Review.

    **III. DISCUSSION**

8.  For the reasons explained below, we grant 29 appeals of decisions
    denying requests for funding from the E-rate program and remand the
    underlying applications associated with these appeals to USAC for
    further action consistent with this Order. We also deny one appeal
    because the Petitioner failed to demonstrate that price was a
    primary factor in its vendor selection process.

9.  Based upon our review of the facts and circumstances of these
    specific cases, we find that USAC improperly denied Petitioners'
    funding requests because it erroneously required Petitioners to give
    more weight to price in the competitive bidding process than to any
    other factor.[^23] These Petitioners filed their applications and
    initiated their competitive bidding process before Funding
    Year 2004. As such, USAC should have applied the standard the
    Commission articulated in the *Tennessee Order,* rather than the
    standard from the *Ysleta Order* that it actually applied.[^24]
    Specifically, USAC should have considered whether price was
    considered as a primary factor for vendor selection and whether the
    most cost-effective services were selected, not whether price was
    weighted the highest during bid evaluations.

10. The record shows that all Petitioners listed in Appendix A (except
    for the St. Jude School) conducted a competitive bidding process
    that adhered to relevant state and local procurement laws.[^25] Each
    applicant submitted documentation to USAC detailing the competitive
    bidding process, including bid requests, bid proposals, and cost
    evaluation criteria.[^26] Each applicant also evaluated the
    responsive bidders, using price as a primary consideration, and
    selected the vendor that offered the most cost-effective
    offering.[^27] Furthermore, the Petitioners listed in Appendix B
    selected vendors from state master contracts.[^28] As noted above,
    the Commission generally relies on such contracts to ensure
    compliance with program rules.[^29] Indeed, the method for procuring
    supplies, materials, equipment and services in Arizona,
    Massachusetts, Mississippi, and West Virginia is by competitive
    sealed bidding.[^30] According to procurement regulations in these
    states, awards are given to the lowest responsive and responsible
    bidder.[^31] Based on these factors, we find that the Petitioners'
    competitive bidding processes, with the exception noted below, did
    not violate program rules. In addition, at this time, there is no
    evidence of waste, fraud or abuse, or misuse of funds, or a failure
    to adhere to core program requirements. We note that the actions
    taken in this Order should have minimal effect on the overall
    federal Universal Service Fund because the monies needed to fund
    these appeals have already been collected and held in reserve.[^32]
    We therefore grant and remand the underlying applications to USAC
    for further consideration in accordance with the terms of this
    Order.

11. We find, however, that the Commission's rules regarding competitive
    bidding were violated when the St. Jude School failed to consider
    price as a primary factor during the vendor selection process and
    failed to select the most cost-effective services.[^33] Here, the
    St. Jude School gave primary consideration to factors other than
    price. Specifically, during selective review, the applicant stated
    that the vendor was selected based upon the school's previous
    experience with the vendor.[^34] The St. Jude School also failed to
    select more cost-effective bid offerings.[^35] We find that even
    under the standard established in the *Tennessee Order*, St. Jude
    School did not comply with the Commission's competitive bidding
    requirements, and we therefore deny St. Jude School's Request for
    Review.

12. In conclusion, we stress that the Commission is committed to
    guarding against waste, fraud, and abuse, and to ensuring that funds
    disbursed through the E-rate universal service mechanism are used
    for appropriate purposes.[^36] Although we grant 30 of the appeals
    addressed here, we make no findings as to the ultimate eligibility
    of the requested services.[^37] Furthermore, this action in no way
    affects the authority of the Commission or USAC to conduct audits or
    investigations to determine compliance with E-rate program rules and
    requirements. Because audits or investigations may provide
    information showing that a beneficiary or service provider failed to
    comply with the statute or the Commission's rules, such proceedings
    can reveal instances in which universal service funds were
    improperly disbursed or in a manner inconsistent with the statute or
    the Commission's rules. To the extent we find that funds were not
    used properly, we will require USAC to recover such funds through
    its normal processes. We emphasize that we retain the discretion to
    evaluate the uses of monies disbursed through the E-rate program and
    to determine on a case-by-case basis whether waste, fraud, or abuse
    of program funds occurred and whether recovery is warranted. We
    remain committed to ensuring the integrity of the program and will
    continue to aggressively pursue instances of waste, fraud, or abuse
    under our own procedures and in cooperation with law enforcement
    agencies.

## IV. ORDERING CLAUSES

13. ACCORDINGLY, IT IS ORDERED that, 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), this Order IS ADOPTED.

14. IT IS FURTHER ORDERED that, pursuant to authority delegated under
    sections 0.91, 0.291, 1.3, and 54.722(a) of the Commission's rules,
    47 C.F.R. §§ 0.91, 0.291, 1.3, and 54.722(a), that section 54.720(b)
    of the Commission's rules, 47 C.F.R. § 54.720(b), is WAIVED with
    regard to Requests for Review filed by Colegio Evangelico Capitan
    Correa, Colegio Jardin, Colegio Kiany, Guamani Private School,
    Southwestern Educational Society, and St. Francis School, Inc.

15. IT IS FURTHER ORDERED that, 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), any and all pending appeals
    before this Commission identified in Appendices A and B of this
    Order, with the exception of St. Jude School, ARE GRANTED and
    REMANDED to USAC for further consideration in accordance with the
    terms of this Order.

16. IT IS FURTHER ORDERED that, 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), the Request for Review filed
    by St. Jude School on March 2, 2004, is DENIED.

17. IT IS FURTHER ORDERED that, pursuant to the authority contained in
    sections 1-4 and 254 of the Communications Act of 1934, as amended,
    47 U.S.C. §§ 151-154 and 254, and pursuant to authority delegated
    under sections 0.91 and 0.291of the Commission's rules, 47 C.F.R. §§
    0.91, 0.291, USAC SHALL COMPLETE its review of each remanded
    application listed in Appendices A-B and ISSUE an award or a denial
    based on a complete review and analysis no later than 90 days from
    release of this Order.

    FEDERAL COMMUNICATIONS COMMISSION

    Thomas J. Navin

    Chief

    Wireline Competition Bureau

APPENDIX A

**Requests for Review- Erroneous Application of *Ysleta Order***

+---------------------------------+-----------------+-----------------+
| **Applicant**                   | **Application   | **Funding       |
|                                 | Number**        | Year**          |
+---------------------------------+-----------------+-----------------+
| Academia Discipulos de Cristo   | 358081, 358083  | 2003            |
| (7-12)                          |                 |                 |
|                                 |                 |                 |
| Bayamon, PR                     |                 |                 |
+---------------------------------+-----------------+-----------------+
| Academia Immaculada Concepcion  | 348142, 348174, | 2003            |
|                                 | 348181          |                 |
| Mayaguez, PR                    |                 |                 |
+---------------------------------+-----------------+-----------------+
| Academia Immaculada Concepcion  | 348144          | 2003            |
| Elementary                      |                 |                 |
|                                 |                 |                 |
| Mayaguez, PR                    |                 |                 |
+---------------------------------+-----------------+-----------------+
| Alamagordo City Public Schools  | 377799          | 2003            |
|                                 |                 |                 |
| Alamagordo, NM                  | 377841          |                 |
+---------------------------------+-----------------+-----------------+
| American Military Academy       | 348405,         | 2003            |
|                                 |                 |                 |
| Guayanabo, PR                   | 348431          |                 |
+---------------------------------+-----------------+-----------------+
| Buffalo Public Schools          | 382734          | 2003            |
|                                 |                 |                 |
| Buffalo, NY                     | 382779          |                 |
+---------------------------------+-----------------+-----------------+
| Cleveland Municipal School      | 321819, 323210, | 2002            |
| District                        | 323152          |                 |
|                                 |                 |                 |
| Cleveland, OH                   |                 |                 |
+---------------------------------+-----------------+-----------------+
| Colegio Evangelico Capitan      | 348452,         | 2003            |
| Correa                          |                 |                 |
|                                 | 348517          |                 |
| Hatilo, PR                      |                 |                 |
+---------------------------------+-----------------+-----------------+
| Colegio Jardin                  | 348532, 348573  | 2003            |
|                                 |                 |                 |
| Bayamon, PR                     |                 |                 |
+---------------------------------+-----------------+-----------------+
| Colegio Kiany                   | 359786, 359870  | 2003            |
|                                 |                 |                 |
| Vista Mar Caguas, PR            |                 |                 |
+---------------------------------+-----------------+-----------------+
| Florida Department of Education | 338600          | 2003            |
|                                 |                 |                 |
| Tallahassee, FL                 | 352390          |                 |
|                                 |                 |                 |
|                                 | 346659          |                 |
+---------------------------------+-----------------+-----------------+
| Guamani Private School          | 348594, 348624  | 2003            |
|                                 |                 |                 |
| Guayama, PR                     |                 |                 |
+---------------------------------+-----------------+-----------------+
| Hayes E-Government Resources,   | 338600          | 2003            |
| Inc.                            |                 |                 |
|                                 | 352390          |                 |
| Tallahassee, Florida            |                 |                 |
|                                 | 346659          |                 |
+---------------------------------+-----------------+-----------------+
| Kalamazoo Public Schools        | 164612          | 2000            |
|                                 |                 |                 |
| Kalamazoo, MS                   |                 |                 |
+---------------------------------+-----------------+-----------------+
| Moreno Valley Unified School    | 296044          | 2002            |
| District                        |                 |                 |
|                                 |                 |                 |
| Moreno Valley, CA               |                 |                 |
+---------------------------------+-----------------+-----------------+
| Pueblo School District 60       | 416616          | 2004            |
|                                 |                 |                 |
| Pueblo, CO                      | 444063          | 2005            |
+---------------------------------+-----------------+-----------------+
| San Diego School District       | 339004          | 2003            |
|                                 |                 |                 |
| San Diego, CA                   |                 |                 |
+---------------------------------+-----------------+-----------------+
| Smoky Hill Education Service    | 365506,         | 2003            |
| Center                          |                 |                 |
|                                 | 358212          |                 |
| Salina, KS                      |                 |                 |
+---------------------------------+-----------------+-----------------+
| Southwestern Educational        | 348696,         | 2003            |
| Society (SECO)                  |                 |                 |
|                                 | 348729          |                 |
| Mayaguez, PR                    |                 |                 |
+---------------------------------+-----------------+-----------------+
| St. Francis School, Inc.        | 358107, 353958  | 2003            |
|                                 |                 |                 |
| Carolina, PR                    |                 |                 |
+---------------------------------+-----------------+-----------------+
| St. Jude School                 | 249418          | 2001            |
|                                 |                 |                 |
| New York, NY                    |                 |                 |
+---------------------------------+-----------------+-----------------+
| Wayne County Public Schools     | 375634          | 2003            |
|                                 |                 |                 |
| Goldsboro, NC                   | 375658          |                 |
|                                 |                 |                 |
|                                 | 375599          |                 |
|                                 |                 |                 |
|                                 | 375448          |                 |
+---------------------------------+-----------------+-----------------+
| Yeshiva Kehilath Yakov          | 364209          | 2003            |
|                                 |                 |                 |
| Brooklyn, NY                    |                 |                 |
+---------------------------------+-----------------+-----------------+
| Yeshiva Bais Mikroh             | 347563          | 2003            |
|                                 |                 |                 |
| Monsey, NY                      |                 |                 |
+---------------------------------+-----------------+-----------------+

**APPENDIX B**

**Requests for Review- Vendors Obtained from State Master Contracts**

+--------------------------------+-------------------+-----------------+
| **Applicant**                  | **Application     | **Funding       |
|                                | Number**          | Year**          |
+--------------------------------+-------------------+-----------------+
| Berkeley County School         | 346450            | 2003            |
| District                       |                   |                 |
|                                |                   |                 |
| Martinsburg, WV                |                   |                 |
+--------------------------------+-------------------+-----------------+
| Boston Public Schools          | 369847            | 2003            |
|                                |                   |                 |
| Boston, MA                     |                   |                 |
+--------------------------------+-------------------+-----------------+
| Somerton School District No.   | 312031            | 2002            |
| 11                             |                   |                 |
|                                |                   |                 |
| Somerton, AZ                   |                   |                 |
+--------------------------------+-------------------+-----------------+
| Sunnyside Unified School       | 300611,           | 2002            |
| District                       |                   |                 |
|                                | 300645            |                 |
| Tuscon, AZ                     |                   |                 |
+--------------------------------+-------------------+-----------------+
| Washington Elementary School   | 307702            | 2002            |
| District                       |                   |                 |
|                                | 300221            |                 |
| Phoenix, AZ                    |                   |                 |
+--------------------------------+-------------------+-----------------+
| Yazoo County School District   | 363676            | 2003            |
|                                |                   |                 |
| Yazoo City, MS                 |                   |                 |
+--------------------------------+-------------------+-----------------+

[^1]: The term "appeals" refers to Requests for Review, Requests for
    Waiver, and Applications for Review. A list of appeals is attached
    in Appendices A and B. Section 54.719(c) of the Commission's rules
    provides that any person aggrieved by an action taken by a division
    of the Universal Service Administrative Company may seek review from
    the Commission. 47 C.F.R. § 54.719(c).

[^2]: *See* Appendices A-B.

[^3]: *See* 47 C.F.R. §§ 54.501-54.503.

[^4]: *See* Schools and Libraries Universal Service, Services Ordered
    and Certification Form, OMB 3060-0806 (December 1997) (Funding Year
    1999 FCC Form 471); Schools and Libraries Universal Service,
    Services Ordered and Certification Form, OMB 3060-0806 (September
    1999) (Funding Year 2000 FCC Form 471); Schools and Libraries
    Universal Service, Services Ordered and Certification Form, OMB
    3060-0806 (October 2000) (Funding Year 2001 FCC Form 471); Schools
    and Libraries Universal Service, Services Ordered and Certification
    Form, OMB 3060-0806 (November 2001) (Funding Year 2002 FCC Form
    471); Schools and Libraries Universal Service, Services Ordered and
    Certification Form, OMB 3060-0806 (October 2003) (Funding Year 2004
    FCC Form 471); Schools and Libraries Universal Service, Services
    Ordered and Certification Form, OMB 3060-0806 (November 2004)
    (Funding Year 2005 FCC Form 471) (collectively, FCC Form 471).

[^5]: 47 C.F.R. § 54.504(c).

[^6]: *See* 47 C.F.R. § 54.500(g) (defining "master contract" as a
    contract negotiated with a service provider by a third party, the
    terms and conditions of which are then made available to an eligible
    school, library, rural health care provider, or consortium that
    purchase directly from the service provider.).

[^7]: *See* *Federal-State Joint Board on Universal Service, Access
    Charge Reform, Price Cap Performance Review for Local Exchange
    Carriers, Transport Rate Structure and Pricing, End User Common Line
    Charge*, CC Docket Nos. 96-45, 96-262, 94-1, 91-213, and 95-72,
    Report and Order and Fourth Order on Reconsideration, 13 FCC Rcd
    5318, 5452-53, para. 233 (1997) (*Fourth Reconsideration Order*).

[^8]: *Fourth Reconsideration Order*, 13 FCC Rcd at 5452-53, para. 233.
    The existing contract exemption applies to contracts signed on or
    before July 10, 1997. A contract signed after July 10, 1997, but
    before the date on which the universal service competitive bid
    system is operational, is exempt from the bidding requirements only
    with respect to services that are provided under such contract
    between January 1, 1998 and December 31, 1998. [47 C.F.R. §
    54.511(c)](http://web2.westlaw.com/find/default.wl?DB=1000547&DocName=47CFRS54.504&FindType=L&AP=&mt=Westlaw&fn=_top&sv=Split&vr=2.0&rs=WLW5.02).

[^9]: *Id.*

[^10]: *See Request for Review by the Department of Education of the
    State of Tennessee of the Decision of the Universal Service
    Administrator*, *Request* *for Review by Integrated Systems and
    Internet Solutions, Inc., of the Decision of the Universal Board of
    Directors of the National Exchange Carrier Association, Inc*., CC
    Docket Nos. 96-45 and 97-21, Order, 14 FCC Rcd 13734 (1999)
    (*Tennessee Order*).

[^11]: *See id.*

[^12]: *Id.* The Commission, however, used two different phrases to
    discuss how price should be taken into account; it said price should
    be "a primary factor," but in discussing prior precedent, the order
    also said price should be "the primary factor." *Id.* at 13739-40,
    paras. 10-11. Subsequently, in the *Ysleta Order*, the Commission
    acknowledged that the "varying phraseology in the same decision
    created some ambiguity on this issue." *See Request for Review by
    Ysleta Independent School District of the Decision of the Universal
    Service Administrator*, CC Docket Nos. 96-45, 97-21, Order, 18 FCC
    Rcd 26406, 26429, para. 50 (2003) (*Ysleta Order*).

[^13]: *See Tennessee Order,* 14 FCC Rcd at 13737-39, paras. 7-9. *See
    also* *Federal-State Joint Board on Universal Service,* CC Docket
    No. 96-45, Report and Order, 12 FCC Rcd 8776, 9029, para. 481 (1997)
    (*Universal Service Order*) (subsequent history omitted) (stating
    that price should be the primary factor in selecting a bid, but
    applicants are given maximum flexibility to take service quality
    into account and may choose the offering that meets their needs most
    effectively and efficiently).

[^14]: *Id.* at 13739-40, para. 10. *See also* 47 C.F.R. §§
    54.504(b)(2)(vii), 54.511(a).

[^15]: *See* *Ysleta Order,* 18 FCC Rcd at 26429, para. 50.

[^16]: *Id*. This rule was originally codified in 2003. *See Schools and
    Libraries Universal Support Mechanism*, CC Docket No. 02-6, Second
    Report and Order and Further Notice of Proposed Rulemaking, 18 FCC
    Rcd 9202 (2004) (codifying 47 C.F.R. § 54.511(a)). *See also School
    and Libraries Universal Support Mechanism*, CC Docket No. 02-6,
    Fifth Report and Order and Order, 19 FCC Rcd 15808 (2004) (codifying
    47 C.F.R. § 54.504(b)(2)(vii) and 47 C.F.R. § 54.504(c)(1)(xi)).

[^17]: *See* *Ysleta Order*, 18 FCC Rcd at 26429, para. 50.

[^18]: *Id*. at n.138.

[^19]: *See* Appendices A-B.

[^20]: *Id*.

[^21]: USAC selects some applications for Selective Review to ensure
    that certain FCC program rules are followed. Applications are
    reviewed to examine compliance with the following: 1) competitive
    bidding process; 2) necessary resources certification; 3) endowment
    qualifications; and 4) consortia qualifications. *See* Schools and
    Libraries website regarding the Selective Review process,
    <http://www.universalservice.org/sl/applicants/step08/>.

[^22]: For purposes of this Order, decisions by both the Schools and
    Libraries Division and USAC will be referred to as decisions issued
    by USAC. Some of the Petitioners appealed USAC's initial funding
    decision directly to the Commission.

[^23]: *See* Appendix A. Several Petitioners filed an untimely appeal
    with the Commission in conjunction with a timely filed appeal. In
    each case, the untimely appeal was filed after Petitioners' appeal
    to USAC was rejected. Petitioners believed that USAC was prematurely
    applying the Commission's ruling in the *Ysleta Order*. After having
    a second application rejected due to the *Ysleta Order* standard,
    Petitioners appealed to the Commission for relief for each of their
    applications. Because the Commission may waive any provision of its
    rules on its own motion and for good cause, we find good cause to
    waive the filing deadline and address these appeals along with the
    timely filed appeals. 47 C.F.R. § 1.3. *See Northeast Cellular
    Telephone Co. v. FCC*, 897 F.2d 1164, 1166 (D.C. Cir. 1990)
    (*Northeast Cellular*).

[^24]: *See Tennessee Order,* 14 FCC Rcd at 13737-13739, paras. 7-9.

[^25]: Request for Review by Academia Discipulos de Cristo; Request for
    Review by Academia Immaculada Concepcion; Request for Review by
    Academia Immaculada Concepcion Elementary; Request for Review by
    Alamagordo City Public Schools; Request for Review by American
    Military Academy; Request for Review by Buffalo Public Schools;
    Request for Review by Cleveland Municipal School District; Request
    for Review by Pueblo School District 60; Request for Review by
    Colegio Evangelico Capitan Correa; Request for Review by Colegio
    Jardin; Request for Review by Colegio Kiany; Request for Review by
    Florida Department of Education; Request for Review by Guamani
    Private School; Request for Review by Hayes E-Government Resources,
    Inc.; Request for Review by Kalamazoo Public Schools; Request for
    Review by Moreno Valley Unified School District; Request for Review
    by San Diego School District; Request for Review by Smoky Hill
    Education Center; Request for Review by Southwestern Educational
    Society; Request for Review by St. Francis School, Inc.; Request for
    Review by St. Jude School; Request for Review by Wayne County Public
    Schools; Request for Review by Yeshiva Kehilath Yakov; Request for
    Review by Yeshiva Bais Mikroh.

[^26]: *Id.*

[^27]: *Id*.

[^28]: Request for Review by Berkeley County School District; Request
    for Review by Boston Public Schools; Request for Review by Somerton
    School District No. 11; Request for Review by Sunnyside Unified
    School District; Request for Review by Washington Elementary School
    District; Request for Review by Yazoo County School District.

[^29]: *Id*. We note that USAC denied Somerton School District's funding
    requests (FRNs 834039, 851198, 851335, 851422, and 867521) stating
    that "excessive pricing on various components associated with
    th\[e\] service provider demonstrates that this service provider is
    not the most cost-effective alternative." *See* Somerton School
    District No. 11 Request for Review at 2. The Commission's rules,
    however, do not expressly establish a bright line test for what is a
    "cost effective service." Although the Commission has requested
    comment on whether it would be beneficial to develop such a test, it
    has not, to date, enunciated bright line standards for determining
    when a particular service is priced so high as to be considered
    excessive or not cost-effective. *See Schools and Libraries
    Universal Support Mechanism*, CC Docket No. 02-6, Third Report and
    Order and Second Further Notice of Proposed Rulemaking, 18 FCC Rcd
    26912 (2003).

[^30]: *See* Code of Massachusetts Regulations, 801 § 21.06(4)(a); Miss.
    Code Ann. § 31-7-13; A.R.S. §§ 41-2533, 41-2553;
    http://www.state.wv.us/admin/purchase/Handbook/hand7.htm.

[^31]: *See, e.g.,* A.R.S. § 41-2533(G).

[^32]: We estimate that the appeals granted in this Order involve
    applications for approximately \$65.5 million in funding for Funding
    Years 2000-2003. We note that USAC has already reserved sufficient
    funds to address outstanding appeals. *See, e.g.,* Universal Service
    Administrative Company, Federal Universal Service Support Mechanisms
    Fund Size Projections for the Third Quarter 2006, dated May 2, 2006.

[^33]: *See* Request for Review by St. Jude School. *See also* 47 C.F.R.
    § 54.511(a).

[^34]: *See* Letter from Schools and Libraries Division of the Universal
    Service Administrative Company to Michael Deegan, St. Jude School,
    filed January 21, 2004.

[^35]: *Id.* The applicant rejected two other bids that offered
    comparable services at a much lower price.

[^36]: *Request for Review of the Decision of the Universal Service
    Administrator by Bishop Perry Middle School, Schools and Libraries
    Universal Service Support Mechanism,* File Nos. SLD-487170, *et
    al.*, CC Docket No. 02-6, Order, 21 FCC Rcd 5316 (rel. May 19,
    2006).

[^37]: The ultimate burden of proving compliance with program rules
    remains with the applicant. *See* 47 C.F.R. § 54.504(c)(1)(C)(x).