Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * | File No. SLD-133664          |
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| Request for Review of the        | ) | CC Docket No. 96-45          |
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| Decision of the                  | * | CC Docket No. 97-21          |
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| Universal Service Administrator  | * |                              |
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| Anderson School                  | * |                              |
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| Staatsburg, New York             |   |                              |
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# ORDER

**Adopted:** **November 21, 2000 Released:** **November 24, 2000**

By the Common Carrier Bureau:

1.  The Bureau has under consideration a request for review filed by the
    Anderson School (Anderson), Staatsburg, New York on May 30,
    2000.[^1] Anderson seeks review of a funding commitment decision
    issued by the Schools and Libraries Division (SLD) of the Universal
    Service Administrative Company (Administrator) pursuant to a funding
    request for internal connections.[^2] For the reasons set forth
    below, we deny Anderson's 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.[^3] In order to receive discounts on eligible services,
    the Commission's rules require that the applicant submit to the
    Administrator a completed FCC Form 470, in which the applicant sets
    forth the school's technological needs and the services for which it
    seeks discounts.[^4] Once the school has complied with the
    Commission's competitive bidding requirements and 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 school has signed the contract, and an
    estimate of funds needed to cover the discounts to be given for
    eligible services.[^5] This information is generally provided in
    Block 5 of FCC Form 471. Among other information, Block 5 requires
    the applicant to indicate services requested, the name of the
    service provider, the type of service or product for which support
    is sought, and the estimated total annual pre-discount cost. 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.  The instant appeal arises from SLD's denial of Anderson's Funding
    Year 2 application for discounted internal connections, Funding
    Request Number (FRN) 198586. In its FCC Form 471, filed on March 17,
    1999, Anderson sought support in a single funding request for
    internal connections services or products which it valued at
    \$1,083,559 for 28 of its campus buildings. SLD denied Anderson's
    funding request, concluding that the funding request included
    internal connections valued at \$658,852 for 21 ineligible
    residential dormitory buildings.[^6]

4.  Anderson filed an appeal with SLD on January 5, 2000, claiming that
    Anderson School is a large, single campus not traversed by a public
    right of way, and, therefore, the services purchased are wholly
    eligible under the rules.[^7] In response, SLD affirmed its
    decision, stating that a significant portion of the funding request
    includes a request for wiring and equipment in dorm facilities that
    are ineligible to receive funding based on program rules.[^8]

5.  Anderson filed the instant appeal with the Commission on May
    30, 2000. In this appeal, Anderson claims that the classification of
    these facilities as "dorms" is faulty and that these "\[f\]acilities
    will include a study center whereby students can complete homework
    assignments and have access to the internet for research, and other
    educational explorations with resident counselors who are available
    to assist the individual students with homework and give learning
    assistance."[^9] Anderson further argues that the fact that these
    facilities additionally contain dorm facilities or other
    non-classroom facilities is irrelevant to a funding decision.[^10]

6.  Although Anderson contends that its buildings containing residential
    dormitories also will contain "study centers," we find no basis upon
    which to grant Anderson's appeal. These study centers are not
    traditional classrooms or computer learning centers, but will be
    used for homework and research with assistence from residential
    counselors. The Commission has found that a given service is
    eligible for support as a component of the institution's internal
    connections only if it is necessary to "transport information all
    the way to the individual classroom."[^11] The Commission stated in
    its *Fourth Order on Reconsideration* that this focus on access to
    classrooms followed from the conclusion that "Congress intended that
    telecommunications and other services be provided directly to
    classrooms."[^12] The Commission clarified its position that
    discounts are not available for internal connections in
    non-instructional buildings unless those internal connections are
    essential for the effective transport of information to an
    instructional building or library.[^13]

7.  Based on our review of the record before us, Anderson's classrooms
    are contained in buildings physically separated from the 21
    residential dormitory buildings, and the internal connections to the
    residential dormitory buildings are not necessary for the effective
    transport of information to Anderson's classrooms. The record shows
    that the seven non-residential buildings on the Anderson School
    campus provide traditional classrooms and computer learning centers.
    Consistent with Commission precedent, we conclude that Anderson
    requested funding for ineligible services when it sought discounts
    on internal connections in the 21 residential dormitories.

8.  Moreover, we uphold SLD's decision to deny Anderson's funding
    request in its entirety because 60 percent of that request was for
    ineligible services. If more than 30 percent of the request is for
    funding of ineligible services, SLD ordinarily denies an application
    in its entirety.[^14] In light of the thousands of applications that
    SLD reviews and processes each funding year, it is administratively
    necessary to place on the applicant the responsibility of
    understanding all relevant program rules and procedures. The
    program's rules state repeatedly that universal service funds
    support only eligible services.[^15] Anderson should have been aware
    that it was seeking discounts for ineligible internal connections.
    We conclude SLD appropriately applied its 30 percent policy based
    upon the facts of this case.

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 request for review
    filed May 30, 2000, by Anderson School, Staatsburg, New York, IS
    DENIED.

### FEDERAL COMMUNICATIONS COMMISSION

> Carol E. Mattey
>
> Deputy Chief, Common Carrier Bureau

# 

[^1]: In the Matter of Request for Review by Anderson School, to the
    Federal Communications Commission, filed May 30, 2000 (Letter of
    Appeal).

[^2]: *See* Letter from Schools and Libraries Division, Universal
    Service Administrative Company, to William Doyle, Anderson School,
    issued December 14, 1999 (Funding Commitment Decision Letter);
    Letter from Schools and Libraries Division, Universal Service
    Administrative Company, to Maria A. Espie, Anderson School, issued
    May 1, 2000 (Administrator's Decision on Appeal).

[^3]: 47 C.F.R. §§ 54.502, 54.503.

[^4]: 47 C.F.R. § 54.504 (b)(1), (b)(3).

[^5]: 47 C.F.R. § 54.504(c).

[^6]: *See* Funding Commitment Decision Letter at 5.

[^7]: Letter from Maria A. Espie, Anderson School, to Schools and
    Libraries Division, Universal Service Administrative Company, filed
    January 5, 2000 (SLD Letter of Appeal).

[^8]: *See* Administrator's Decision on Appeal at 1.

[^9]: *See* Letter of Appeal at 3.

[^10]: *Id*.

[^11]: Federal-State Joint Board on Universal Service, CC Docket No.
    96-45, Report and Order, 12 FCC Rcd 8776, 9021 (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. denied in AT&T Corp. v. Cincinnati Bell Tel.
    Co.*, 120 S.Ct. 2237 (June 5, 2000), *cert. dismissed in GTE Service
    Corp. v. FCC*, No. 99-1249, 2000 WL 1641148 (Nov. 2, 2000).

[^12]: Federal-State Joint Board on Universal Service, CC Docket No.
    96-45, Fourth Order on Reconsideration, Report and Order, CC Docket
    Nos. 96-45, 96-262, 94-1, 91-213, 95-72, 13 FCC Rcd 5318, 5440
    (1997*)* (*Fourth Order on Reconsideration*). *See also Universal
    Service Order*, 12 FCC Rcd at 9017-9018.

[^13]: *Fourth Order on Reconsideration* at 5440. *See also* 47 C.F.R. §
    54.506.

[^14]: The "30-percent policy" is not a Commission rule, but rather is
    an internal SLD benchmark utilized during its application review
    process, to enable SLD to approve funding requests for eligible
    services without having to spend an excessive amount of time working
    with an applicant that for the most part is requesting funding of
    ineligible services. If 30 percent or less of the request is for
    funding of ineligible services, SLD will normally approve the
    portion that is for eligible services. The benchmark percentage,
    originally 50 percent, was adjusted to 30 percent by SLD as the
    program matured. *See, e.g., Request for Review of the Decision of
    the Universal Service Administrator by Brooklyn Public Library,
    Brooklyn, New York, Federal-State Joint Board on Universal Service,
    Changes to the Board of Directors of the National Exchange Carrier
    Association, Inc*., Order, File No. SLD-149423, CC Dockets No.
    96-45, 97-21, 2000 WL 1406973 (F.C.C., Sept 26, 2000); *Request for
    Review of the Decision of the Universal Service Administrator by New
    Kensington-Arnold School District New Kensington, Pennsylvania,
    Federal-State Joint Board on Universal Service, Changes to the Board
    of Directors of the National Exchange Carrier Association, Inc*.,
    Order, File No. SLD-28754, CC Dockets No. 96-45, 97-21, 1999 WL
    1216147 (F.C.C., Dec 21, 1999); *Request for Review of the Decision
    of the Universal Service Administrator by Western Heights Public
    School District*, *Federal-State Joint Board on Universal Service,
    Changes to the Board of Directors of the National Exchange Carrier
    Association, Inc*., Order, File No. SLD-54054, CC Dockets No. 96-45,
    97-21, 15 FCC Rcd 8502 (Com. Car. Bur. 1999).

[^15]: 47 C.F.R. §54.504 et seq.