**Before the**

**Federal Communications Commission**

**Washington, DC 20554**

In the Matter of )

)

Request for Review of the )

Decision of the )

Universal Service Administrator by )

)

White Sulphur Springs School District ) File No. SLD-82064

White Sulphur Springs, Montana )

)

Federal-State Joint Board on ) CC Docket No. 96-45

Universal Service )

)

Changes to the Board of Directors of the ) CC Docket No. 97-21

National Exchange Carrier Association, Inc. )

**order**

**Adopted: November 16, 1999 Released: November 16, 1999**

By the Common Carrier Bureau:

1.  The Common Carrier Bureau has under consideration an appeal, filed
    on April 22, 1999, by the White Sulphur Springs School District of
    White Sulphur Springs, Montana (White Sulphur Springs), seeking
    review of a decision issued by the Schools and Libraries Division
    (SLD) of the Universal Service Administrative Company
    (Administrator). White Sulphur Springs seeks review of SLD's denial
    of its request for funding of internal connection services, which
    included a particular type of router.[^1] For the reasons set forth
    below, we grant White Sulphur Springs' appeal to the extent provided
    herein, and remand White Sulphur Springs' funding application to the
    SLD for further determination in accordance with this order.

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 for eligible
    telecommunications services, Internet access, and internal
    connections.[^2]

3.  By letter dated February 18, 1999, SLD denied White Sulphur Springs'
    request for a discount on the cost of implementing certain internal
    connection services.[^3] Specifically, SLD denied funding for
    funding request number (FRN) 89418 of White Sulphur Springs'
    application for discount funding.[^4] In its February 18, 1999
    letter, SLD explained that White Sulphur Springs' funding request
    had been denied because it included a request for a discount on a
    Kentrox Pacesetter T1 Access Router, which included integrated
    DSU/CSU[^5] and ISDN HS WAN[^6] and was ineligible for discount
    funding.[^7]

4.  In a letter filed with SLD on March 18, 1999, White Sulphur Springs
    appealed SLD's denial of this funding request.[^8] White Sulphur
    Springs explained that the particular brand of router at issue was
    required by its service provider for receiving 56k Internet access.
    White Sulphur Springs further explained that the router was capable
    of providing up to T1 speeds, enabling White Sulphur Springs to
    avoid purchasing a new router each time it wanted to increase
    bandwidth. Citing SLD's Eligible Service List, White Sulphur Springs
    asserted that both routers and CSU/DSU equipment are eligible for
    funding. White Sulphur Springs further maintained that, although the
    router is capable of being used in a WAN environment, White Sulphur
    Springs is not making such use of the router. White Sulphur Springs
    added that the router was advertised as providing "cost effective
    Internet access for small LANs," the same purpose for which White
    Sulphur Springs is using the router. By letter dated March 26, 1999,
    SLD denied White Sulphur Springs' appeal.[^9] SLD determined that
    the router at issue was a remote access router and, therefore, was
    ineligible for funding.[^10]

5.  In a letter filed with the Commission on April 22, 1999, White
    Sulphur Springs appealed SLD's denial of its request for funding of
    FRN 89418.[^11] In its appeal to the Commission, White Sulphur
    Springs asserts that the router is being used neither for WAN
    purposes generally nor specifically for remote access. White Sulphur
    Springs further points out that its contract with its service
    provider explicitly prohibits White Sulphur Springs from attaching
    modems to the router in order to access the router's Internet
    connection remotely. In its appeal to the Commission, White Sulphur
    Springs further asserts that both routers and CSU/DSUs are eligible
    for funding. White Sulphur Springs requests that the Commission
    reverse SLD's decisions denying White Sulphur Spring's request for
    discounts on internal connections in FRN 89418, and that the
    Commission direct SLD to approve this request.[^12]

6.  Under section 54.500 of the Commission's rules, a wide area network
    is defined as "a voice or data network that provides connections
    from one or more computers within an eligible school . . . to one or
    more computers or networks that are external to such eligible
    school."[^13] Section 54.518 of the Commission's rules states that
    "\[t\]o the extent that states \[or\] schools . . . build or
    purchase a wide area network to provide telecommunications services,
    the cost of such wide area networks shall not be eligible for
    universal service discounts."[^14]

7.  As the Commission stated in its *Tennessee* decision, "we can, where
    appropriate, look behind transactions underlying requests for
    discounts to ensure that they comply with \[the Commission's\]
    rules."[^15] Under the facts presented here, we conclude that the
    router in dispute here is not part of an ineligible wide area
    network. Although the router is capable of supporting WAN
    connections, White Sulphur Springs is not using the router to
    connect to any facilities other than to its Internet service
    provider in order to receive Internet access. In addition, White
    Sulphur Springs' contract with its service provider explicitly
    forbids White Sulphur Springs from connecting modems to the router
    in order to access the router's Internet connection remotely. Given
    that the router at issue is marketed primarily to be used for what
    is an eligible service, namely to provide Internet access for small
    LANs, and given that this use is the only use White Sulphur Springs
    is making of the router, we conclude that the presence of
    additional, peripheral WAN functionality in the router, which is not
    being used, does not render the router ineligible for funding as a
    part of wide area network facilities. As such, we conclude that
    White Sulphur Springs is entitled to discounts for this service.

8.  To the extent necessary to effectuate the decision above, we grant a
    waiver of section 54.507(b)(2) of the Commission's rules.[^16] This
    rule provides that schools and libraries may receive discounts on
    nonrecurring services only through September 30, 1999.

9.  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 appeal filed by White
    Sulphur Springs School District on April 22, 1999, IS GRANTED to the
    extent provided herein. We direct the Administrator to review White
    Sulphur Springs' funding application and to issue a revised Funding
    Commitment Decision Letter consistent with the decision above.

10. IT IS FURTHER ORDERED, pursuant to sections 0.91 and 0.291 of the
    Commission's rules, 47 C.F.R. §§ 0.91 and 0.291, that section
    54.507(b)(2) of the Commission's rules, 47 C.F.R. § 54.507(b)(2), is
    WAIVED for a period of up to 180 days following the date of the
    issuance of a Funding Commitment Letter by the Administrator
    pursuant to this order.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Yog R. Varma
>
> Deputy Chief, Common Carrier Bureau

[^1]: Section 54.719(c) of the Commission\'s rules provides that any
    person aggrieved by an action taken by a division of the
    Administrator may seek review from the Commission. 47 C.F.R. §
    54.719(c).

[^2]: 47 C.F.R. §§ 54.502, 54.503.

[^3]: *See* Letter of the Schools and Libraries Division, Universal
    Service Administrative Company, to Roger Armstrong, White Sulphur
    Springs School District, dated February 18, 1999 (*Funding
    Commitment Letter*).

[^4]: *See id.* at 4 (stating that FRN 89418 had been denied).

[^5]: DSU/CSU stands for data service unit/channel service unit. CSU
    equipment interfaces between carriers and customer end user
    equipment, managing and monitoring digital transmissions between
    carriers and customers for signal quality and transmission problems.
    DSU equipment interfaces between CSU and end user computer
    equipment, converting end user binary data into the format required
    for T1 or FT1 transmission.

[^6]: ISDN HS WAN stands for integrated services digital network, high
    speed wide area network.

[^7]: *See Funding Commitment Letter* at 4.

[^8]: *See* Letter of James Palmer, White Sulphur Springs School
    District, to Schools and Libraries Division, Universal Service
    Administrative Company, date unknown (received March 18, 1999)
    (*USAC Appeal Letter*).

[^9]: *See* Letter of Schools and Libraries Division, Universal Service
    Administrative Company, to Roger Armstrong, White Sulphur Springs
    School District, dated March 26, 1999 (*Administrator's Decision on
    Appeal*).

[^10]: *See id.*

[^11]: *See* Letter of Roger Armstrong, White Sulphur Springs School
    District, to Office of the Secretary, FCC, date unknown (received on
    April 22, 1999).

[^12]: *See id.*

[^13]: 47 C.F.R. § 54.500(l).

[^14]: 47 C.F.R. § 54.518. *See also Request for Review by the
    Department of Education of the State of Tennessee of the Decision of
    the Universal Service Administrator*, CC Docket Nos. 96-45 and
    97-21, Order, FCC 99-216, 1999 WL 604160, para. 28 (rel. August 11,
    1999) (*Tennessee*) (discussing the Commission's rules regarding the
    eligibility of internal connections for discount funding, and the
    ineligibility of wide area network facilities for discount funding).

[^15]: *Tennessee*, 1999 WL 604160, para. 27.

[^16]: 47 C.F.R. § 54.507(b)(2).