**Before the**

**Federal Communications Commission**

**Washington, DC 20554**

In the Matter of )

)

Request for Review of the )

Decision of the )

Universal Service Administrator by )

)

St. John the Baptist School ) File No. SLD-181667

Petersburg, Nebraska )

)

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: March 28, 2001 Released: March 29, 2001**

By the Accounting Policy Division, Common Carrier Bureau:

1.  The Accounting Policy Division has under consideration a Request for
    Review filed by St. John the Baptist School (St. John), Petersburg,
    Nebraska, seeking review of a decision issued by the Schools and
    Libraries Division (SLD) of the Universal Service Administrative
    Company (Administrator).[^1] St. John seeks review of SLD's denial
    of its application for discounts under the schools and libraries
    universal service support mechanism.[^2] For the reasons set forth
    below, we deny the Request for Review.

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.[^3] Schools and libraries must apply for support each
    funding year.[^4] In order to receive discounts on eligible
    services, the Commission\'s rules require that an applicant submit
    to the Administrator a completed FCC Form 470, in which the
    applicant sets forth its technological needs and the services for
    which it seeks discounts.[^5] Once the applicant has complied with
    the Commission's competitive bidding requirements and entered into
    an agreement for the 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 entered into
    the agreement, and an estimate of funds needed to cover the
    discounts to be given for eligible services.[^6] Using information
    provided by the applicant in its FCC Form 471, the Administrator
    determines the amount of discounts for which the applicant is
    eligible.

3.  St. John filed a FCC Form 471 requesting discounts for
    telecommunications services on January 16, 2000. Upon reviewing St.
    John's FCC Form 471, SLD determined that a significant amount of St.
    John's requested discounts was for a convent and rectory, ineligible
    entities under the program rules. Accordingly, by letter dated May
    5, 2000, SLD denied St. John's request for discounts for Funding
    Year 3, on the grounds that a significant portion of St. John's
    request included a request for discounts for an ineligible
    entity.[^7] In response, St. John filed the instant Request for
    Review with the Commission requesting review of SLD's decision to
    deny St. John's request for discounts.

4.  We have reviewed St. John's Request for Review and conclude that SLD
    properly denied St. John's application for discounts. We confirm
    that St. John requested discounts for services where more than
    thirty percent of the requested discounts were for ineligible
    entities.[^8] The Communications Act of 1934, as amended, states
    that the Commission shall establish rules to enhance access to
    advanced telecommunications and information services for all public
    and nonprofit elementary and secondary school classrooms... and
    libraries.[^9] Only eligible entities may receive universal service
    funds, and only schools meeting the statutory definitions of
    elementary or secondary schools are eligible for discounts.[^10] The
    primary purpose for which support is sought must be the delivery of
    services to the classrooms or other places of instruction at schools
    and libraries meeting the statutory definition of an eligible
    institution.[^11] In addition, the instructions to the FCC Form 471
    state that applicants may not seek support for ineligible services,
    entities and uses.[^12] In order to ensure that only eligible
    entities receive discounts, applicants must allocate the cost of
    shared services and facilities among eligible and ineligible
    entities.[^13] In its application, St. John clearly designated funds
    for entities that do not comply with the statutory definition of
    schools. St. John requested funds for both eligible and ineligible
    entities (the convent and rectory) without subtracting the cost of
    services for the ineligible entities. Moreover, St. John's does not
    challenge SLD's conclusion that St. John's funding request included
    services that would be used by ineligible entities.[^14] Therefore,
    SLD properly denied St. John's funding request.

5.  In addition, St. John requests that the Commission review its
    application using data provided in its Request for Review which
    excludes the ineligible entities. However, under the rules of the
    program, applicants are not permitted to amend its FCC Form 471 to
    remove ineligible services after the closure of the FCC Form 471
    filing window deadline.[^15] If applicants were permitted to make
    such correction, SLD would face significant additional
    administrative burdens. In light of the thousands of applications
    that SLD reviews and processes each funding year, administrative
    necessity requires that each applicant be responsible for clearly
    and accurately describing its funding request and for understanding
    all applicable program rules. We therefore deny St. John's request.

6.  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 St. John the Baptist School, Petersburg, Nebraska on May
    23, 2000, IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Mark G. Seifert

Deputy Chief, Accounting Policy Division

Common Carrier Bureau

[^1]: Letter from Jean Reicks, St. John the Baptist School, to Federal
    Communications Commission, filed on May 23, 2000 (Request for
    Review).

[^2]: 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).

[^3]: ^ ?^ 47 C.F.R. §§ 54.402, 54.503.

[^4]: 47 C.F.R. § 54.507(d).

[^5]: 47 C.F.R. § 54.504(b)(1), (b)(3).

[^6]: 47 C.F.R. § 54.504(c).

[^7]: Letter of the Schools and Libraries Division of the Universal
    Service Administrative Company to Jean Reicks, St. John the Baptist
    School, dated May 5, 2000 (Funding Commitment Decision Letter).

[^8]: The \"30 percent policy\" is not a Commission rule, but rather is
    an SLD operating procedure established pursuant to FCC policy. *See
    Changes to the Board of Directors of the National Exchange Carrier
    Association, Inc., 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). This operating procedure, used during SLD\'s
    application review process, enables SLD to efficiently process
    requests for funding for services that are eligible for discounts
    but that also include some ineligible components. If 30 percent or
    less of the request is for funding of ineligible services, SLD
    normally will consider the application and issue a funding
    commitment for the eligible services. If more than 30 percent of the
    request is for funding of ineligible services, SLD will deny the
    funding request in its entirety. The 30 percent policy allows SLD to
    efficiently process requests for funding that contain only a small
    amount of ineligible services without expending significant fund
    resources working with applicants that are requesting funding of
    ineligible services.

[^9]: The Telecommunications Act of 1996 amends the Communications Act
    of 1934, 47 U.S.C. § 151, *et. seq.*, *see* 47 U.S.C. §
    254(h)(2)(A); *see also* *Federal-State Joint Board on Universal
    Service*, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776,
    9072-73 (1997) (*Universal Service First Report and Order*),
    *affirmed in part*, *Texas Office of Public Utility Counsel v. FCC*,
    183 F.3d 393 (5th Cir. 1999) (affirming *Universal Service First
    Report and Order* in part and reversing and remanding on unrelated
    grounds), *cert. denied, Celpage, Inc. v. FCC*, 120 S. Ct. 2212 (May
    30, 2000), *cert. denied,* *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).

[^10]: 47 C.F.R. § 54.501; *see Universal Service Order* at 9066, para.
    552. To be considered eligible, schools must meet the statutory
    definition of an elementary or secondary school found in the
    Elementary and Secondary Education Act of 1965. "Elementary school"
    is defined as "a nonprofit institutional day or residential school
    that provides elementary education, as determined under State law."
    20 U.S.C. § 8801(14). "Secondary school" is defined as "a nonprofit
    institutional day or residential school that provides secondary
    education, as determined under State law, except that such term does
    not include any education beyond grade 12." 20 U.S.C. § 8801(25).

[^11]: Sections 245(b)(6) and 254(h)(2)(A) of the Communications Act
    specifically refer to the provision of telecommunications and other
    services directly to classrooms. 47 U.S.C. §§ 254(b)(6),
    254(h)(2)(A). *See also* SLD web site,
    \<[http://www.sl.universalservice.org](http://www.sl.universalservice.org/)\>.

[^12]: Instructions to Schools and Libraries Universal Service, Services
    Ordered and Certification Form, OMB 3060-0806 (FCC Form 471
    Instructions) (September 1999), at 18.

[^13]: *See id.* To the extent that an applicant seeks discounts for
    eligible services bundled with ineligible services, applicants must
    also apportion the costs of eligible and ineligible services.
    *Universal Service Order* at 9022, para. 461-462.

[^14]: *See* Request for Review.

[^15]: The Commission's rules require that applicants file a completed
    Form 471 by the filing window deadline to be considered pursuant to
    the funding priorities for "in-window" applicants. 47 C.F.R. §§
    54.504(c), 54.5079(c).