**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of )

)

Request for Review of the )

Decision of the )

Universal Service Administrator by )

)

Terral School District 3 ) File No. SLD-118223

Terral, Oklahoma )

)

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: September 18, 2000 Released: September 19, 2000**

By the Common Carrier Bureau:

1.  The Common Carrier Bureau (Bureau) has under consideration a Letter
    of Appeal filed by the Terral School District 3 (Terral), Terral,
    Oklahoma on May 1, 2000, pursuant to section 54.719(c).[^1] Terral
    seeks review of a decision of the Schools and Libraries Division
    (SLD) of the Universal Service Administrative Company, denying in
    part Terral's request for funding of internal connection services.
    For the reasons discussed below, we grant the appeal in part and
    remand this matter to SLD.

2.  By letter dated July 8, 1999, SLD granted Terral's request for a
    discount on the cost of installing a Cisco 2610 router for
    connection to a T-1 line (Funding Request Number 174632), but
    modified the request to exclude the cost of an integrated data
    service unit/channel service unit wide area network interface card
    (WAN Interface Card or Card).[^2] Terral appealed SLD's decision,
    arguing that "\[t\]echnical information about this Cisco router
    indicates that there can be no Internet T1 connection . . . in the
    absence of \[the Card\]."[^3] SLD denied Terral's appeal, stating
    simply that the Card "is an ineligible product under program
    rules."[^4] In the instant appeal, Terral argues that the Card is
    eligible for funding because it is an essential component of the
    Cisco 2610 router, which has been found to be eligible for
    funding.[^5]

3.  In *White Sulphur Springs School District*, the Bureau concluded
    that where a router and channel service unit/data service unit
    equipment are "marketed primarily to be used for what is an eligible
    service, namely to provide Internet access for small LANs," and the
    applicant uses the router only for this purpose, "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."[^6] Terral does not
    specifically assert that the WAN Interface Card at issue here is not
    being used for wide area network purposes.[^7] Nevertheless, the
    technical materials provided by Terral indicate that the Card's
    primary function is to serve as a data service unit/channel service
    unit, which is eligible for funding.[^8] Moreover, SLD's finding of
    ineligibility appears to be inconsistent with its decision to fund
    the Cisco 2610 router, given the fact that the router and the Card
    are integrated components and the Card's WAN functionality can be
    used only together with the router. Under these circumstances, and
    in the absence of an explanation by SLD of the basis for its
    decision, we conclude that the record does not support SLD's
    ineligibility finding. Accordingly, we shall remand to SLD for
    further consideration.[^9] In particular, SLD should determine
    whether Terral would be using the router and associated Card for
    wide area network purposes.

4.  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
    Terral School District 3, Terral, Oklahoma on May 1, 2000 IS GRANTED
    to the extent provided herein. We direct the Schools and Libraries
    Division to review Terral's funding

5.  application and, if warranted, to issue a revised Funding Commitment
    Decision Letter in accordance with the above-stated decision.

    FEDERAL COMMUNICATIONS COMMISSION

    Carol E. Mattey

    Deputy Chief, Common Carrier Bureau

[^1]: Letter from Howard Kuchta, Kellogg Consulting, L.L.C., on behalf
    of Terral School District 3, to Office of the Secretary, FCC, filed
    May 1, 2000 (Letter of Appeal). 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]: Letter from Schools and Libraries Division, Universal Service
    Administrative Company, to Howard Kuchta, Kellogg Consulting,
    L.L.C., on behalf of Terral School District 3, dated July 8, 1999.

[^3]: Letter from Howard Kuchta, Kellogg Consulting, L.L.C., on behalf
    of Terral School District 3, to Schools and Libraries Division,
    filed August 3, 1999.

[^4]: Letter from Schools and Libraries Division, Universal Service
    Administrative Company, to Howard Kuchta, Kellogg Consulting,
    L.L.C., on behalf of Terral School District 3, dated April 7, 2000.

[^5]: Letter of Appeal. Terral also points out that the Eligibility List
    does not address the subject device, but treats "connectors" and
    "circuit cards" as eligible for funding. The Eligibility List
    provides guidance on the eligibility of various products and
    services and is available on the SLD Website at
    [www.sl.universalservice.org/reference/eligible.asp](http://www.sl.universalservice.org/reference/eligible.asp).

[^6]: *Request for Review of the Decision of the Universal Service
    Administrative Company by White Sulphur Springs School District*, 14
    FCC Rcd 3396, 3397-98 (C.C.Bur. 1999) (*White Sulphur Springs*)
    (applicant entitled to discount for "a Kentrox Pacesetter T1 Access
    Router, which included integrated DSU/CSU and ISDN HS WAN\[,\]"
    where applicant stated that it used the router "neither for WAN
    purposes generally nor specifically for remote access\[,\]" and its
    contract with the service provider explicitly prohibited remote
    access use of the router); *see* 47 C.F.R. § 54.518 ("To 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.").

[^7]: *See White Sulphur Springs*, 14 FCC Rcd at 3398.

[^8]: *See* Letter of Appeal at 7 (Card "takes the signal from the T-1 .
    . . line and converts it into data" that the router then transmits
    to desktop machines).

[^9]: In so doing, we do not suggest that *White Sulphur Springs*
    requires a decision in Terral's favor, but that under the
    circumstances SLD's failure to explain the basis for its decision
    requires remand.