**Before the**

**Federal Communications Commission**

**Washington, DC 20554**

In the Matter of )

)

Request for Review of the )

Decision of the )

Universal Service Administrator by )

)

Scranton School District )

Scranton, Pennsylvania )

On behalf of )

)

Intermediate Unit #19 Consortium ) File No. SLD-112318

Archbald, Pennsylvania )

)

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: January 6, 2000 Released: January 7, 2000**

By the Common Carrier Bureau:

1.  The Bureau has under consideration a Letter of Appeal submitted by
    Scranton School District (Scranton), Scranton, Pennsylvania, on
    behalf of the Intermediate Unit #19 Consortium (Intermediate Unit
    #19), Archbald Pennsylvania, dated May 17, 1999, seeking review of a
    decision issued by the Schools and Libraries Division (SLD) of the
    Universal Service Administrative Company (Administrator). Scranton
    seeks review of the SLD's funding commitment decision regarding
    Scranton's application for discounts under the schools and libraries
    universal service support mechanism.[^1] For the reasons set forth
    below, we deny Scranton's Letter of Appeal.

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] In order to receive discounts on eligible services,
    schools and libraries are required to provide specific information
    to the Administrator. An applicant must file with the Adminstrator a
    completed FCC Form 470, setting forth the applicant's technological
    needs and the services for which it seeks discounts.[^3] Once the
    school or library has contracted for eligible services, it is
    required to file an FCC Form 471 application to apprise the
    Administrator of the services that have been ordered, the service
    provider with whom the school has signed the contract, and an
    estimate of the funds necessary to cover the discounts to be given
    for eligible services.[^4] The applicant provides such information
    in block 5 of FCC Form 471. Using information provided by the
    applicant in its FCC Form 471, the Administrator determines the
    amount of discounts for which the school is eligible. Approval of
    the application is contingent upon the filing of FCC Form 471, and
    funding commitment decisions are based on information provided by
    the school or library in this form.

3.  In block 5, item 15 of its April 8, 1998 FCC Form 471, Intermediate
    Unit #19 indicated that it was seeking discounts for
    telecommunications services, internal connections and Internet
    access from a number of service providers. Specifically,
    Intermediate Unit #19 sought discounts for telecommunications
    services provided by Bell Atlantic-Pennsylvania, Inc., (funding
    request number 151098). Intermediate Unit #19 entered \$6,693.16 as
    the estimated total annual pre-discount cost for funding request
    151098 on its FCC Form 471. It listed the estimated total monthly
    pre-discount cost, however, as \$6,693.16 as well. In its FCC Form
    471 Pre-Discount Cost Calculation Optional Grid, Intermediate Unit
    #19 recorded the unit monthly charges as \$557.76 for twelve months
    and entered \$6,693.16 as the total annual amount of estimated
    eligible pre-discount monthly charges.

4.  By letter dated February 25, 1999, the SLD granted, in part, the
    requests for discounts filed by Intermediate Unit #19 in its FCC
    Form 471.[^5] In particular, although it modified the discount
    percentage requested by Intermediate Unit #19, the SLD approved
    Intermediate Unit #19's request for discounts for funding request
    number 151098, based on the \$557.76 monthly charge entered by
    Intermediate Unit #19 on its FCC Form 471 Pre-Discount Cost
    Calculation Optional Grid, for a total of \$5,979.19.[^6]

5.  On March 15, 1999, Intermediate Unit #19 filed a Letter of Appeal
    with the Administrator, stating that, with respect to funding
    request number 151098, it had incorrectly listed its estimated
    annual pre-discount cost as \$6,693.16 on block 5, column 10 of its
    FCC Form 471.[^7] Intermediate Unit #19 asserted that the \$6,693.16
    amount is actually its monthly pre-discount cost rather than the
    \$557.76 figure that it originally entered. Intermediate Unit #19
    stated that the estimated annual pre-discount cost that should have
    been requested was \$80,317.92. Moreover, Intermediate Unit #19
    asserted that the actual start date for services was January 1,
    1998, rather than the March 9, 1998 effective date listed in block
    5, column 7 of its FCC Form 471.

6.  By letter dated April 30, 1999, the Administrator affirmed its
    initial funding decision and denied Intermediate Unit #19's
    appeal.[^8] In its decision, the Administrator stated that the
    amount funded for funding request number 151098 was calculated based
    on the documentation provided by Intermediate Unit #19. The
    Administrator noted that the FCC Form 471 completed by Intermediate
    Unit #19 indicated that the unit monthly charges totaled \$557.76
    and that the total annual amount of monthly charges amounted to
    \$6,693.16. The Administrator concluded that the applicant had
    incorrectly transferred the \$6,693.16 figure to item 15, column 9
    as the estimated monthly pre-discount cost.[^9]

7.  We have reviewed Intermediate Unit #19's FCC Form 471, SLD's records
    relating to funding request number 151098, as well as other requests
    for discounts made by Intermediate Unit #19 and we conclude that SLD
    properly calculated its funding commitment decision based on the
    \$557.76 figure provided in Intermediate Unit #19's FCC Form 471
    Pre-discount Cost Calculation Grid. A review of Intermediate Unit
    #19's FCC Form 471 reveals that, except for funding requests
    involving one-time pre-discount costs, Intermediate Unit #19 made
    the same error in block 5, item 15 for each of its funding requests
    by entering the same amount for both the estimated monthly
    pre-discount cost and the estimated annual pre-discount cost.

8.  In the FCC Form 471 Pre-Discount Cost Calculation Optional Grid,
    Intermediate Unit #19 once again set out the unit monthly charges
    and annual amount of monthly charges for each funding request that
    entailed monthly costs. This time, it listed \$557.76 as the unit
    monthly charges and listed \$6,693.16 as the annual amount of
    monthly charges for funding request number 151098. For other
    requests for discounts in the same application, Intermediate Unit
    #19 similarly entered amounts representing the monthly charges and
    annual amounts of monthly charges. For example, in funding request
    number 151099, Intermediate Unit #19 entered the amount of \$700 as
    the unit monthly charges and \$8,400 as the estimated eligible
    pre-discount total charges. We note that Intermediate Unit #19
    appeals SLD's determination only with respect to funding request
    number 151098. In reviewing Intermediate Unit #19's FCC Form 471 in
    its entirety as well as records relating to this application, we
    conclude that SLD reasonably relied upon the amounts entered by the
    applicant in the FCC Form 471 Pre-Discount Cost Calculation Optional
    Grid. For funding request number 151098, Intermediate Unit #19
    plainly entered \$557.76 as the monthly pre-discount cost and
    \$6,693.16 as the estimated annual pre-discount cost. In light of
    the thousands of applications that SLD must review and process each
    year, we find that it is administratively appropriate to require an
    applicant to be responsible for correctly calculating and reporting
    its estimated pre-discount costs in completing its FCC Form 471 upon
    which its ultimate funding is dependent. We, therefore, conclude
    that SLD correctly calculated the funding commitment decision for
    funding request number 151098 based on the \$557.76 estimated
    monthly pre-discount cost as reported by Intermediate Unit #19 on
    its FCC Form 471.

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 Letter of Appeal by
    Scranton School District, Scranton, Pennsylvania on behalf of
    Intermediate Unit #19 Consortium, Archbald, Pennsylvania IS DENIED.

    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]: 47 C.F.R. § 54.504(b)(1), (b)(3).

[^4]: 47 C.F.R. § 54.504(c).

[^5]: Letter from Schools and Libraries Division, Universal Service
    Administrative Co., to Robert Carpenter, Intermediate Unit #19,
    dated February 25, 1999.

[^6]: The funding commitment decision amount included an automatic
    extension of monthly costs through June 30, 1999.

[^7]: Letter from John R. Williams, Superintendent of Schools, Scranton
    City School District, to Schools and Libraries Corporation, dated
    March 4, 1999.

[^8]: Letter from the Schools and Libraries Division, Universal Service
    Administrative Co., to John R. Williams, Intermediate Unit #19
    Consortium, dated April 30, 1999.

[^9]: With respect to the applicant's contention that the effective
    service start date of the telecommunications services ordered was
    January 1, 1998 rather than March 9, 1998, as entered in
    Intermediate Unit's FCC Form 471, the Administrator noted that
    funding request number 151098 was submitted as a tariff service and
    that the allowable contract date is 28 days after the posting of the
    FCC Form 470 on the SLD website. The Administrator concluded that,
    because Intermediate Unit #19's FCC Form 470 had a posting date of
    February 7, 1998, its service start date could not have occurred
    prior to March 7, 1998. An effective service start date prior to
    March 7, 1998 would have violated the Commission's 28-day
    competitive bidding requirement and resulted in denial of the
    funding request. We note that the applicant does not raise this
    issue in its appeal before the Commission.