**Before the**

**Federal Communications Commission**

**Washington, DC 20554**

In the Matter of )

)

Application for Review of the )

Decision of the )

Universal Service Administrator by )

)

Aberdeen School District ) File No. SLD-297249, *et al*.

Aberdeen, WA, *et al.* )

)

Schools and Libraries Universal Service ) CC Docket No. 02-6

Support Mechanism )

**order**

**Adopted: April 18, 2007 Released: May 8, 2007**

By the Commission:

#  INTRODUCTION

1.  In this Order, we grant 62 appeals and deny one appeal of decisions
    by the Universal Service Administrative Company (USAC) concerning
    applications for discounted services under the schools and libraries
    universal service mechanism (also known as the E-rate program).[^1]
    As explained below, we find that, for 34 applicants that made
    ministerial or clerical errors on forms that were timely submitted,
    good cause exists to waive section 54.504(c) of the Commission's
    rules, which requires applicants to submit a completed FCC Form 471
    to USAC.[^2] We also find that, for 28 applicants, good cause exists
    to waive section 54.504(b)(4) of the Commission's rules, which
    states that applicants must wait 28 days after their FCC Form 470 is
    posted to USAC's website or after public availability of an
    applicant's request for proposal (RFP) before entering into an
    agreement with a service provider for the requested services.[^3]
    Lastly, for one applicant, we deny the appeal for failing to comply
    with the Commission's competitive bidding rules.[^4]

2.  Accordingly, we remand the underlying applications associated with
    the granted appeals to USAC for further action consistent with this
    Order. To ensure that the underlying applications are resolved
    expeditiously, we direct USAC to complete its review of each
    application listed in the Appendix and issue an award or denial
    based upon a complete review and analysis no later than 120 days
    from the release of this Order. In addition, starting in Funding
    Year 2007,[^5] we direct USAC to provide applicants with a 15-day
    opportunity to cure any ministerial or clerical errors on their FCC
    Form 471 that make it appear that the applicants violated the 28-day
    rule.[^6]

3.  As the Commission recently noted, many E-rate program beneficiaries,
    particularly small entities, contend that the application process is
    complicated, resulting in a number of applications for E-rate
    support being denied for ministerial or clerical errors.[^7] We find
    that the actions we take here to provide relief will promote the
    statutory requirements of section 254(h) of the Communications Act
    of 1934, as amended (the "Act"), by helping to ensure that eligible
    schools and libraries obtain access to discounted telecommunications
    and information services.[^8] Moreover, we believe that none of the
    waivers of sections 54.504(b)(4) and (c) granted here will frustrate
    the overarching purpose of the 28-day competitive bidding process,
    which is intended to ensure a fair opportunity for service providers
    to bid on the services sought by applicants.[^9]

    **II. BACKGROUND**

4.  Under the E-rate program, eligible schools, libraries, and consortia
    that include eligible schools and libraries may apply for discounts
    for eligible telecommunications services, Internet access, and
    internal connections.[^10] The Commission's rules provide that each
    funding year, with one limited exception for existing, binding
    contracts, an eligible school, library, or consortium that includes
    eligible schools or libraries must seek competitive bids for all
    services eligible for support.[^11] In accordance with the
    Commission's rules, an applicant must file with USAC, for posting to
    USAC's website, an FCC Form 470 requesting discounted services.[^12]
    The applicant must wait 28 days after the FCC Form 470 is posted to
    the USAC website or after public availability of an applicant's RFP,
    whichever is later, before entering into an agreement with a service
    provider for the requested services.[^13] Once the school or library
    has complied with the Commission's competitive bidding requirements
    and entered into agreements for eligible services, it must file an
    FCC Form 471 application to notify USAC of the services that have
    been ordered, the service providers with which the applicant has
    entered into an agreement, and an estimate of funds needed to cover
    the discounts to be given for eligible services.[^14] An applicant
    can enter into multi-year contracts or contracts with voluntary
    extensions without reposting an FCC Form 470 application and
    complying with the 28-day rule each year as long as the applicant
    indicated such intent in Item 13 on its FCC Form 470 or in its
    RFP.[^15]

    **III. DISCUSSION**

5.  In this item, we grant 62 appeals and deny one appeal of decisions
    by USAC denying requests for funding under the E-rate program due to
    an applicant's failure to comply with the Commission's 28-day
    competitive bidding requirement.[^16] The E-rate program's
    competitive bidding requirements ensure more efficient pricing for
    telecommunications and information services purchased by schools and
    libraries by minimizing the amount of support needed. Specifically,
    "the 28-day posting rule is intended to provide a fair and uniform
    period applicable to all schools and libraries seeking discounts for
    eligible services to permit competitive bidding by all potential
    bidders."[^17] Generally, Petitioners' argue either that they made
    clerical or ministerial errors on the FCC Form 471[^18] or that they
    misunderstood our rules, which resulted in a denial of their
    requests for E-rate funding.[^19] For the reasons discussed below,
    we waive sections 54.504(b) or (c) of our rules, as applicable, and
    grant these appeals.[^20] The Commission also notes that the grant
    of these appeals should have minimal effect on the Universal Service
    Fund.[^21] With regard to one appeal, we deny for failing to comply
    with the Commission's competitive bidding rules.[^22] Therefore, we
    remand the underlying applications associated with these appeals to
    USAC for further action consistent with this Order. To ensure that
    the underlying applications are resolved expeditiously, we direct
    USAC to complete its review of each application listed in the
    Appendix and issue an award or denial based upon a complete review
    and analysis no later than 120 days from the release of this Order.
    In remanding these applications to USAC, we make no finding as to
    the ultimate eligibility of the requested services.[^23]

6.  *[Section 54.504(c) Waivers]{.underline}*. According to their denial
    letters from USAC, these Petitioners' requests for E-rate funding
    were denied because their contracts for discounted services were
    signed prior to the 28-day waiting period computed from the date of
    the posting of the FCC Form 470 on the USAC website. These
    Petitioners' denials, however, can be more accurately described as
    failing to comply with the requirement of section 54.504(c) of our
    rules, which requires applicants to submit a completed FCC Form 471
    to USAC.[^24] That is, while the applicants filed their FCC Forms
    471 on time, they need a waiver to make a correction after the
    deadline. Specifically, these appeals involved clerical errors on
    the part of the Petitioners; they inserted the wrong contract date,
    the wrong classification of service, or the wrong FCC Form 470
    application number on the FCC Form 471, thus making it appear that
    the applicants violated the 28-day rule.[^25]

7.  Based on the facts and the circumstances of these specific cases, we
    find that good cause exits to waive section 54.504(c) of our
    rules.[^26] In these circumstances, applicants committed minor
    errors in filling out their application forms. As the Commission
    recently noted, we do not believe that such minor mistakes warrant
    the complete rejection of each of these applicants' E-rate
    applications.[^27] Our finding is consistent with our ruling in the
    *Bishop Perry Order* in which the Commission waived section
    54.504(c) of our rules in situations where applicants' ministerial
    or clerical errors caused USAC to find that the applications were
    not complete and thus not filed within the filing window.[^28]
    Importantly, like those appeals granted in the *Bishop Perry Order*,
    applicants' errors here could not have resulted in an advantage for
    them in the processing of their application.[^29] As such, the
    applicants' mistakes, if not caught by USAC, could not have resulted
    in the applicants receiving more funding than they were entitled to.
    Moreover, the Commission found in the *Bishop Perry Order* that,
    under certain circumstances, rigid adherence to certain E-rate rules
    and requirements that are "procedural" in nature does not promote
    the goals of section 254 of the Act -- ensuring access to discounted
    telecommunications and information services to schools and libraries
    -- and therefore does not serve the public interest.[^30] Thus, we
    find that good cause exists to waive section 54.504(c) of our rules
    for these applicants.[^31] Accordingly, we grant and remand these
    appeals to USAC for further processing consistent with this Order.

8.  *[Section 54.504(b) Waivers]{.underline}*. A number of Petitioners
    mistakenly signed their contracts or certified their FCC Forms 471
    before the allowable contract date.[^32] Other Petitioners filed an
    FCC Form 471 before the allowable contract date because there was
    only one service provider in the area that could provide the needed
    services and, therefore, Petitioners mistakenly believed they did
    not have to wait 28 days before submitting an FCC Form 471.[^33]
    Other Petitioners did not indicate they were posting for a
    multi-year contract or a contract with a voluntary renewal provision
    when they originally posted the FCC Form 470.[^34] Finally, we find
    that two Petitioners complied with the Commission's rules and grant
    their requests for review.[^35]

9.  Based on the facts and the circumstances of these specific cases, we
    find that good cause exists to waive section 54.504(b)(4) of the
    Commission's rules, which requires applicants to wait 28 days after
    posting an FCC Form 470 to USAC's website before entering into an
    agreement with a service provider for the requested services.[^36]
    We find that Petitioners' errors related to the competitive bidding
    process do not warrant a complete rejection of their applications.
    We have examined the facts of each of these appeals and found that a
    waiver is warranted based on the circumstances presented and based
    on the facts that there is no evidence of waste, fraud or abuse. The
    goal of the competitive bidding process is to ensure that funding is
    not wasted because an applicant agrees to pay a higher price than is
    otherwise commercially available. We find no indication in the
    record that, as a result of these errors, applicants benefited from
    their mistakes or that any service provider was harmed.
    Specifically, there is no evidence in the record that other bids
    were not considered because these applicants did not fully comply
    with our competitive bidding rules. We find that the policy
    underlying these rules, therefore, was not compromised due to
    Petitioners' errors. In fact, those Petitioners with multi-year
    contracts complied with our competitive bidding rules when their
    requests for service were initially posted. Furthermore, we find
    that several of these Petitioners, while not waiting the full 28
    days before entering into an agreement, only missed the 28-day
    deadline by a minimal number of days (*i.e*., one to three days) and
    therefore their requests for discounted services were subject to
    competitive bidding for a meaningful period of time. While we
    emphasize that our competitive bidding rules are important to ensure
    a fair bidding process, we find that denying these Petitioners
    requests for funding would create undue hardship and prevent these
    potentially otherwise eligible schools and libraries from receiving
    E-rate funding. We therefore find that good cause exists to grant
    Petitioners a waiver of section 54.504(b)(4) of our rules.[^37]
    Accordingly, we grant and remand these appeals to USAC for further
    processing consistent with this Order.[^38]

10. Although we find that good cause exists to grant waivers of the
    Commission's rules for the Petitioners described above, we deny the
    appeal of Adel-Desoto-Minburn Community School District (Adel) for
    failing to adhere to the Commission's competitive bidding
    rules.[^39] Adel said it did not file a new FCC Form 470 in Funding
    Year 2002 because the window for FCC Form 470s was closed.[^40]
    Instead, Adel cited to an FCC Form 470 it had filed three years
    earlier. Commission rules require applicants to file a new FCC Form
    470 for posting each year, with minor exceptions.[^41] As a result,
    Adel did not file an FCC Form 470 in Funding Year 2002 to be posted
    on USAC's website for 28 days to solicit competitive bids for its
    services.[^42] We find that the particular facts of this case do not
    rise to the level of special circumstances required for a deviation
    from the general rule.[^43] Unlike the other Petitioners, Adel's
    violation of the 28-day rule was not a result of a clerical error or
    misunderstanding of our competitive bidding rules. Adel circumvented
    the competitive bidding process by not soliciting bids in the year
    for which it sought services. As a result, Adel's contract with its
    service provider was never subject to the competitive bidding
    process. We therefore deny Adel's petition for review.

11. We emphasize the limited nature of this decision. As discussed
    above, the competitive bidding rules ensure more efficient pricing
    for telecommunications and information services purchased by schools
    and libraries.[^44] Many other E-rate applicants fully complied with
    these rules, and our action here does not eliminate the 28-day
    competitive bidding requirement. Applicants are not free to
    disregard the 28-day rule based on their own determination that only
    one service provider can provide the desired services---they must
    use the bidding process to determine whether this is the case. In
    addition, we note that, in the *Comprehensive Review NPRM*, we
    started a proceeding to address, among other things, potential
    streamlining of the application and competitive bidding process for
    the schools and libraries support mechanism.[^45] In the interim,
    all applicants must comply with our current rules and procedures and
    continue to submit complete and accurate information to USAC as part
    of the application review process. Applicants who have questions
    about the competitive bidding process or who need technical support
    should contact USAC for clarification and assistance.

12. Further, beginning in Funding Year 2007, we require USAC to provide
    all E-rate applicants with an opportunity to cure ministerial and
    clerical errors on their FCC Forms 471 that make it appear that the
    applicants violated the 28-day rule.[^46] Specifically, USAC shall
    inform applicants promptly in writing of any and all ministerial or
    clerical errors that are detected in their applications, along with
    a clear and specific explanation of how the applicant can remedy
    those errors. Applicants shall have 15 calendar days from the date
    of receipt of notice in writing by USAC to amend or refile their FCC
    Form 471.[^47] The 15-day period is limited enough to ensure that
    funding decisions are not unreasonably delayed for E-rate applicants
    and should provide sufficient time for applicants to correct
    unintentional ministerial and clerical errors.[^48] The opportunity
    for applicants to amend their filings to cure these types of errors
    will also improve the efficiency and effectiveness of the Fund and
    reduce the occurrence of circumstances justifying waivers such as
    those granted above. Because applicants who are eligible for funding
    will now receive funding where previously it was denied for
    ministerial or clerical errors, we will ensure that funding is
    distributed first to the applicants who are determined by our rules
    to be most in need of funding. As a result, universal service
    support will be received by schools in which it will have the
    greatest impact for the most students. Furthermore, the opportunity
    to amend the application will improve the efficiency of the schools
    and libraries program. If USAC helps applicants file correct and
    complete applications initially, USAC should be able to reduce the
    money it spends on administering the fund because fewer appeals will
    be filed protesting the denial of funding for these types of issues.
    Therefore, we believe this additional opportunity to cure
    inadvertent administrative, ministerial, and clerical errors on
    applications will improve the administration of fund.

13. Finally, we are committed to guarding against waste, fraud, and
    abuse, and ensuring that funds disbursed through the E-rate program
    are used for appropriate purposes. Although we grant the appeals
    addressed here, this action in no way affects the authority of the
    Commission or USAC to conduct audits and investigations to determine
    compliance with the E-rate program rules and requirements. Because
    audits or investigations may provide information showing that a
    beneficiary or service provider failed to comply with the statute or
    our rules, such proceedings can reveal instances in which universal
    service funds were improperly disbursed or in a manner inconsistent
    with the statute or our rules. To the extent we find that funds were
    not used properly, we will require USAC to recover such funds
    through its normal processes. We emphasize that we retain the
    discretion to evaluate the uses of monies disbursed through the
    E-rate program and to determine on a case-by-case basis that waste,
    fraud, or abuse of program funds occurred and that recovery is
    warranted. We remain committed to ensuring the integrity of the
    program and will continue to aggressively pursue instances of waste,
    fraud, or abuse under the Commission's procedures and in cooperation
    with law enforcement agencies.

## IV. ORDERING CLAUSES {#iv.-ordering-clauses .unnumbered}

14. ACCORDINGLY, IT IS ORDERED, pursuant to the authority contained in
    sections 1-4 and 254 of the Communications Act of 1934, as amended,
    47 U.S.C. §§ 151-154 and 254, and sections 1.3, and 54.722(a) of the
    Commission's rules, 47 C.F.R. §§ 1.3 and 54.722(a), that 47. C.F.R.
    §§ 54.504(b)(4) and (c) ARE WAIVED, to the extent detailed herein.

15. IT IS FURTHER ORDERED, pursuant to the authority contained in
    sections 1-4 and 254 of the Communications Act of 1934, as amended,
    47 U.S.C. §§ 151-154 and 254, and sections 1.3, and 54.722(a) of the
    Commission's rules, 47 C.F.R. §§ 1.3 and 54.722(a), that, with the
    exception of the Request for Review filed by Adel-Desoto-Minburn,
    Adel, Iowa, the Requests for Review and/or Requests for Waiver filed
    by the Petitioners as listed in the Appendix ARE GRANTED and
    REMANDED to USAC for further consideration in accordance with the
    terms of this Order.

16. IT IS FURTHER ORDERED, pursuant to the authority contained in
    sections 1-4 and 254 of the Communications Act of 1934, as amended,
    47 U.S.C. §§ 151-154 and 254, and sections 1.3, and 54.722(a) of the
    Commission's rules, 47 C.F.R. §§ 1.3 and 54.722(a), that the Request
    for Review filed by Adel-Desoto-Minburn, Adel, Iowa, IS DENIED.

17. IT IS FURTHER ORDERED, pursuant to the authority contained in
    sections 1-4 and 254 of the Communications Act of 1934, as amended,
    47 U.S.C. §§ 151-154 and 254, and sections 1.3, and 54.722(a) of the
    Commission's rules, 47 C.F.R. §§ 1.3 and 54.722(a), that USAC SHALL
    COMPLETE its review of each remanded application listed in the
    Appendix and SHALL ISSUE an award or a denial based on a complete
    review and analysis no later than 120 calendar days from release of
    this Order.

18. IT IS FURTHER ORDERED that this Order SHALL BE EFFECTIVE upon
    release, in accordance with section 1.103 of the Commission\'s
    rules, 47 C.F.R. § 1.103.

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

    Secretary

**Appendix**

**28-Day Competitive Bidding Requirement Violations**

+--------------------------+------------+-------+---------------------+
| **Applicant**            | > **App    | *     | **Type of Appeal**  |
|                          | lication** | *Fund |                     |
|                          | >          | ing** |                     |
|                          | >          |       |                     |
|                          | **Number** | **Y   |                     |
|                          |            | ear** |                     |
+--------------------------+------------+-------+---------------------+
| Aberdeen School District | > 297249   | 2002  | Application for     |
|                          |            |       | Review              |
| Aberdeen, WA             |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Abilene Free Public      | > 475678   | 2005  | Request for Review  |
| Library                  |            |       |                     |
|                          |            |       |                     |
| Abilene, KS              |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Adel-DeSoto-Minburn      | 312456     | 2002  | Request for Review  |
| Community School         |            |       |                     |
| District                 |            |       |                     |
|                          |            |       |                     |
| Adel, IA                 |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Anchorage School         | 359931     | 2003  | Request for Review  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Anchorage, AK            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Albany Public Library    | 264946,    | 2001  | Petition for        |
|                          | 264948,    |       | Reconsideration     |
| Albany, NY               | 264968,    |       |                     |
|                          | 264975     |       |                     |
+--------------------------+------------+-------+---------------------+
| Atlantic County Library  | 210563     | 1999  | Request for Review  |
| System                   |            |       |                     |
|                          |            |       |                     |
| Mays Landing, NJ         |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Augusta County School    | 468711     | 2005  | Request for Review  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Fisherville, VA          |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Bank Street School for   | 266720     | 2001  | Request for Review  |
| Children                 |            |       |                     |
|                          |            |       |                     |
| New York, NY             |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Bath School Department   | 394135     | 2004  | Request for Review  |
|                          |            |       |                     |
| Bath, ME                 |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Bedford Public Schools   | 383870     | 2003  | Request for Waiver  |
|                          |            |       |                     |
| Temperance, MI           |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Bethlehem Area Public    | > 476706   | 2005  | Request for Review  |
| Library                  |            |       |                     |
|                          |            |       |                     |
| Bethlehem, PA            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| B.F. Jones Memorial      | 462310     | 2005  | Request for Review  |
| Library Aliquippa        |            |       |                     |
| District Library Center  |            |       |                     |
|                          |            |       |                     |
| Aliquippa, PA            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Brunswick County Schools | 402426     | 2004  | Request for Review  |
|                          |            |       |                     |
| Brunswick, NC            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Butternut School         | 427879     | 2004  | Request for Review  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Butternut, WI            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Calumet City Public      | 397978     | 2004  | Request for Review  |
| Library                  |            |       |                     |
|                          |            |       |                     |
| Calumet City, IL         |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Chippewa Hills School    | 458210     | 2005  | Request for Review  |
| District\                |            |       |                     |
| Remus, MI                |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Chowchilla Union High    | 286755     | 2002  | Request for Review  |
| School District          |            |       |                     |
|                          |            |       |                     |
| Chowchilla, CA           |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Clark Township School    | 329953     | 2002  | Request for Review  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Clark, NJ                |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Columbia Union School    | 476940     | 2005  | Request for Review  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Columbia, CA             |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Cooperative Educational  | 434930,    | 2004  | Request for Waiver  |
| Service Agency No. 7\    | 431367     |       |                     |
| Green Bay, WI            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Cumberland County School | > 422037   | 2004  | Request for Review  |
| District                 |            |       | and/or Waiver       |
|                          |            |       |                     |
| Burkesville, KY          |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Custer County School     | 408862     | 2004  | Application for     |
| District                 |            |       | Review              |
|                          |            |       |                     |
| Westcliffe, CO           |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Dallas County School     | 450565     | 2005  | Request for Review  |
| District 1               |            |       |                     |
|                          |            |       |                     |
| Buffalo, MO              |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Danville City School     | 3          | 2003  | Request for Review  |
| District                 | 77368[^49] |       |                     |
|                          |            |       |                     |
| Danville, VA             |            |       |                     |
+--------------------------+------------+-------+---------------------+
| David Douglas School     | 488132     | 2005  | Request for Review  |
| District 40              |            |       |                     |
|                          |            |       |                     |
| Portland, OR             |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Ewing Public Schools     | 389540     | 2004  | Request for Review  |
|                          |            |       |                     |
| Ewing, NE                |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Graham Independent       | 231786     | 2001  | Request for Review  |
| School District          |            |       |                     |
|                          |            |       |                     |
| Graham, TX               |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Helena Public School     | 329699     | 2002  | Request for Review  |
| District                 |            |       |                     |
|                          |            |       |                     |
| No. 1                    |            |       |                     |
|                          |            |       |                     |
| Helena, MT               |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Howell Township Public   | 355805     | 2003  | Request for Review  |
| Schools                  |            |       |                     |
|                          |            |       |                     |
| Howell, NJ               |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Hydaburg City School     | 445230     | 2005  | Request for Review  |
|                          |            |       |                     |
| Hydaburg, AK             |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Islesboro School         | 267529     | 2001  | Request for Waiver  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Islesboro, ME            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Jackson-Hinds Library    | 364529     | 2003  | Request for Review  |
| System                   |            |       |                     |
|                          |            |       |                     |
| Jackson, MS              |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Johnson Elementary       | > 419684   | 2004  | Request for Review  |
| School                   |            |       |                     |
|                          |            |       |                     |
| Johnson, VT              |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Kennewick School         | > 289973   | 2002  | Request for Review  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Kennewick, WA            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Latch School Inc.        | 407909     | 2004  | Request for Review  |
|                          |            |       |                     |
| Phoenix, AZ              |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Los Angeles Unified      | 154262,    | 1999  | Request for Review  |
| School District          | 153035,    |       |                     |
|                          | 153020     |       |                     |
| Los Angeles, CA          |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Madawaska School         | 471143     | 2005  | Request for Review  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Madawaska, ME            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Maine School             | 292956     | 2002  | Request for Review  |
| Administration District  |            |       |                     |
| No. 9                    |            |       |                     |
|                          |            |       |                     |
| New Sharon, ME           |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Manton JT Union          | 472608     | 2005  | Request for Review  |
| Elementary School        |            |       |                     |
| District                 |            |       |                     |
|                          |            |       |                     |
| Manton, CA               |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Marvin L. Winans Academy | 340426     | 2003  | Request for Waiver  |
| of Performing Arts       |            |       |                     |
|                          |            |       |                     |
| Detroit, MI              |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Mason Public School      | 502936     | 2006  | Request for Waiver  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Mason, MI                |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Miles City Unified       | 409073     | 2004  | Request for Review  |
| School District          |            |       |                     |
|                          |            |       |                     |
| Miles City, MT           |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Milton School District   | > 382043   | 2003  | Request for Review  |
|                          |            |       |                     |
| Tilton, NH               |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Modesto City Schools     | 447375     | 2005  | Request for Review  |
|                          |            |       |                     |
| Modesto, CA              |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Nelson Public School     | 355307     | 2003  | Request for Review  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Nelson, NV               |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Norborne R-VIII School   | > 342549   | 2003  | Request for Review  |
| District                 |            |       |                     |
|                          |            |       |                     |
| Norborne, MO             |            |       |                     |
+--------------------------+------------+-------+---------------------+
| North Scott Community    | 405789     | 2004  | Request for Review  |
| School District\         |            |       |                     |
| Eldridge, IA             |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Nottingham School        | 434790     | 2004  | Request for Waiver  |
|                          |            |       |                     |
| Nottingham, NH           |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Onondaga-Cortland        | 296555     | 2002  | Request for Review  |
| Madison BOCES            |            |       |                     |
|                          |            |       |                     |
| Syracuse, NY             |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Philadelphia-Montgomery  | 330476     | 2002  | Request for Waiver  |
|                          |            |       |                     |
| Christian Academy        |            |       |                     |
|                          |            |       |                     |
| Erdenheim, PA            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Princeton R-5 School     | 386867     | 2004  | Request for Review  |
|                          |            |       |                     |
| Princeton, MO            |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Prosser School District  | 469478     | 2005  | Request for Review  |
| No. 116                  |            |       |                     |
|                          |            |       |                     |
| Prosser, WA              |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Rapides Parish Library   | > 488334   | 2005  | Request for Review  |
|                          |            |       |                     |
| Alexandria, LA           |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Reform Public Library    | 361356     | 2003  | Request for Waiver  |
|                          |            |       |                     |
| Reform, AL               |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Richland School District | 373134     | 2002  | Request for Review  |
|                          |            |       |                     |
| Richland, WA             |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Swampscott Public        | 325959     | 2002  | Request for Review  |
| Schools                  |            |       |                     |
|                          |            |       |                     |
| Swampscott, MA           |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Sycamore Community       | 461129     | 2005  | Request for Review  |
| Schools                  |            |       |                     |
|                          |            |       |                     |
| Cincinnati, OH           |            |       |                     |
+--------------------------+------------+-------+---------------------+
| The School District of   | 328065     | 2002  | Request for Review  |
| Palm Beach County        |            |       | and/or Request for  |
|                          |            |       | Waiver              |
| West Palm Beach, FL      |            |       |                     |
+--------------------------+------------+-------+---------------------+
| United School District   | 472451     | 2005  | Request for Review  |
|                          |            |       |                     |
| Armagh, PA               |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Waverly City Schools     | > 444786   | 2005  | Request for Review  |
|                          |            |       | and/or Waiver       |
| Waverly, OH              |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Western Ohio Computer    | 350140     | 2003  | Request for Review  |
| Organization             |            |       |                     |
|                          |            |       |                     |
| Sidney, OH               |            |       |                     |
+--------------------------+------------+-------+---------------------+
| White Settlement         | > 423543   | 2004  | Request for Review  |
| Independent School       |            |       |                     |
| District                 |            |       |                     |
|                          |            |       |                     |
| White Settlement, TX     |            |       |                     |
+--------------------------+------------+-------+---------------------+
| Willits Charter School   | 440944     | 2005  | Request for Review  |
|                          |            |       |                     |
| Willits, CA              |            |       |                     |
+--------------------------+------------+-------+---------------------+

[^1]: In this Order, we use the term "appeals" to generically refer to
    requests for review of decisions, or waivers related to such
    decisions, issued by the Commission, the Wireline Competition
    Bureau, or USAC. A list of these petitions is attached in the
    Appendix and we will refer to all of these parties as Petitioners.
    Section 54.719(c) of the Commission's rules provides that any person
    aggrieved by an action taken by a division of the Universal Service
    Administrative Company may seek review from the Commission. 47
    C.F.R. § 54.719(c).

[^2]: 47 C.F.R. § 54.504(c); *see infra* paras. 6-7.

[^3]: 47 C.F.R. § 54.504(b)(4); *see infra* paras. 8-9.

[^4]: *See infra* para. 10.

[^5]: USAC shall also apply this 15-day opportunity to applications with
    these types of appeals currently before USAC.

[^6]: *See Request for Review of the Decision of the Universal Service
    Administrator by Bishop Perry Middle School, et al., Schools and
    Libraries Universal Service Support Mechanism*, File No. SLD-487170,
    CC Docket No. 02-6, Order, 21 FCC Rcd 5316, 5326-27, para. 23 (2006)
    (*Bishop Perry Order*). We recognize that USAC cannot always
    identify these types of errors simply by looking at the FCC Form
    471. In those cases, applicants will have 15 days from receiving the
    denial of their application to demonstrate that it was a ministerial
    or clerical error that gave the appearance that the applicant
    violated the 28-day rule.

[^7]: *See Comprehensive Review of Universal Service Fund Management,
    Administration, and Oversight,* *Federal-State Joint Board on
    Universal Service, Schools and Libraries Universal Service Support
    Mechanism, Rural Health Care Support Mechanism, Lifeline and Linkup,
    Changes to the Board of Directors of the National Exchange Carrier
    Association, Inc.,* WC Docket Nos. 05-195, 02-60, 03-109, CC Docket
    Nos. 96-45, 02-6, 97-21, Notice of Proposed Rulemaking and Further
    Notice of Proposed Rulemaking, 20 FCC Rcd 11308 (2005)
    (*Comprehensive Review NPRM*); *Bishop Perry Order*, 21 FCC Rcd at
    5316, para. 2.

[^8]: 47 U.S.C. § 254(h). The Telecommunications Act of 1996, Pub. L.
    No. 104-104, 110 Stat. 56, amended the Communications Act of 1934.

[^9]: *See* 47 C.F.R. §§ 54.504 (b)(4) and (c); *see, e.g., Request for
    Review of the Decision of the Universal Service Administrator by
    Currituck County Schools, Federal-State Joint Board on Universal
    Service*, File No. SLD-111040, CC Docket No. 96-45, Order, 15 FCC
    Rcd 5564, 5566, para. 6 (Com. Car. Bur. 2000) (*Currituck County
    Schools Order*).

[^10]: 47 C.F.R. §§ 54.501-54.503.

[^11]: 47 C.F.R. §§ 54.504, 54.511(c).

[^12]: 47 C.F.R. § 54.504(b); *see also* Schools and Libraries Universal
    Service, Description of Services Requested and Certification Form,
    OMB 3060-0806 (September 1999) (Funding Years 2000, 2001, 2002 FCC
    Form 470); Schools and Libraries Universal Service, Description of
    Services Requested and Certification Form, OMB 3060-0806 (April
    2002) (Funding Year 2003 FCC Form 470); Schools and Libraries
    Universal Service, Description of Services Requested and
    Certification Form, OMB 3060-0806 (May 2003) (Funding Year 2004 FCC
    Form 470); Schools and Libraries Universal Service, Description of
    Services Requested and Certification Form, OMB 3060-0806 (October
    2004) (Funding Year 2005 FCC Form 470) (collectively, FCC Form 470).

[^13]: 47 C.F.R. § 54.504(b)(4); *see* Schools and Libraries Universal
    Service, Services Ordered and Certification Form, OMB 3060-0806
    (December 1997) (Funding Year 1999 FCC Form 471); Schools and
    Libraries Universal Service, Services Ordered and Certification
    Form, OMB 3060-0806 (September 1999) (Funding Year 2000 FCC Form
    471); Schools and Libraries Universal Service, Services Ordered and
    Certification Form, OMB 3060-0806 (October 2000) (Funding Year 2001
    FCC Form 471); Schools and Libraries Universal Service, Services
    Ordered and Certification Form, OMB 3060-0806 (November 2001)
    (Funding Year 2002 FCC Form 471); Schools and Libraries Universal
    Service, Services Ordered and Certification Form, OMB 3060-0806
    (October 2003) (Funding Year 2004 FCC Form 471); Schools and
    Libraries Universal Service, Services Ordered and Certification
    Form, OMB 3060-0806 (November 2004) (Funding Year 2005 FCC Form 471)
    (collectively, FCC Form 471).

[^14]: 47 C.F.R. § 54.504(c). *See* FCC Form 471. The Commission's rules
    do provide a limited exemption from the 28-day competitive bidding
    requirement when applicants had "existing contracts" signed before
    January 30, 1998. *See Federal-State Joint Board on Universal
    Service*, CC Docket No. 96-45, Tenth Order on Reconsideration, 14
    FCC Rcd 5983, 5986, para. 6 (1999); *see also* 47 C.F.R. §
    54.511(c)(1). None of the Petitioners argue that this exemption
    applies to their case.

[^15]: *Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Order, 15 FCC Rcd 6732, 6736, para. 10-12 (1999); *see* USAC
    website, Contract guidance, at
    <http://www.universalservice.org/sl/applicants/step04/contract-guidance.aspx>
    (retrieved March 5, 2007). A contract including voluntary extensions
    means that the contract expires at the end of its original term and
    may be voluntarily extended for one or more years pursuant to the
    provisions in the contract. *Id*.

[^16]: The Commission may waive any provision of its rules on its own
    motion and for good cause shown. 47 C.F.R. § 1.3. A rule may be
    waived where the particular facts make strict compliance
    inconsistent with the public interest. *Cellular Telephone Co. v.
    FCC*, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (*Northeast Cellular*).
    In addition, the Commission may take into account considerations of
    hardship, equity, or more effective implementation of overall policy
    on an individual basis. *WAIT Radio v. FCC*, 418 F.2d 1153, 1157,
    (D.C. Cir. 1969), *affirmed by* *WAIT Radio v. FCC*, 459 F.2d 1203
    (D.C. Cir. 1972). In sum, waiver is appropriate if special
    circumstances warrant a deviation from the general rule, and such
    deviation would better serve the public interest than strict
    adherence to the general rule. *Northeast Cellular*, 897 F.2d at
    1166.

[^17]: *See Currituck County Schools Order*, 15 FCC Rcd at 5566, para.
    6.

[^18]: *See* Application for Review of Aberdeen School District; Request
    for Review of Abilene Free Public Library; Petition for
    Reconsideration of Albany Public Library; Request for Review of
    Augusta County School District; Request for Review of Bank Street
    School for Children; Request for Review of Bath School Department;
    Request for Review of Bethlehem Area Public Library; Request for
    Review of B.F. Jones Memorial Library Aliquippa District Library
    Center; Request for Review of Calumet City Public Library; Request
    for Review of Chippewa Hills School District; Request for Review of
    Chowchilla Union High School District; Request for Review and/or
    Waiver of Cumberland County School District; Request for Review of
    David Douglas School District 40; Request for Review of Hydaburg
    City School; Request for Review of Jackson-Hinds Library System;
    Request for Review of Johnson Elementary School; Request for Review
    of Kennewick School District; Request for Review of Madawaska School
    District; Request for Review of Maine School Administration District
    No. 9; Request for Waiver of Marvin L. Winans Academy of Performing
    Arts; Request for Review of Milton School District; Request for
    Review of Modesto City Schools; Request for Review of Nelson Public
    School District; Request for Review of Norborne R-VIII School
    District; Request for Review of Onondaga-Cortland Madison BOCES;
    Request for Review of Princeton R-5 School; Request for Review of
    Prosser School District No. 116; Request for Review of Rapides
    Parish Library; Request for Review of Richland School District;
    Request for Review of Sycamore Community Schools; Request for Review
    and/or Waiver of Waverly City Schools; Request for Review of Western
    Ohio Computer Organization; Request for Review of White Settlement
    Independent School District; Request for Review of Willits Charter
    School.

[^19]: *See* Request for Review of Anchorage School District; Request
    for Review of Atlantic County Library System; Request for Review of
    Butternut School District; Request for Review of Clark Township
    School District; Request for Review of Columbia Union School
    District; Request for Waiver of Cooperative Educational Service
    Agency No. 7; Request for Review of Ewing Public Schools; Request
    for Review of Graham Independent School District; Request for Review
    of Islesboro School District; Request for Review of Los Angeles
    Unified School District; Request for Waiver of Mason Public School
    District; Request for Review of Miles City Unified School District;
    Request for Waiver of Nottingham School; Request for Review of
    Swampscott Public Schools; Request for Waiver of Bedford Public
    Schools; Application for Review of Custer County School District;
    Request for Review of Manton JT Union Elementary School District;
    Request for Waiver of Philadelphia-Montgomery Christian Academy;
    Request for Review of Brunswick County Schools; Request for Review
    of Dallas County School District 1; Request for Review of Danville
    City School District; Request for Review of Helena Public School
    District No. 1; Request for Review of Howell Township Public
    Schools; Request for Review of Latch School Inc.; Request for Review
    of North Scott Community School District; Request for Review of The
    School District of Palm Beach County; Request for Review of United
    School District. One request for waiver, filed on behalf of Reform
    Public Library (Reform), was submitted by USAC. USAC acknowledged
    that it significantly delayed posting Reform's FCC Form 470 to its
    website. Due to this delay, Reform violated the 28-day rule in order
    to file its FCC Form 471 before the filing window closed. *See*
    Request for Waiver of Reform Public Library.

[^20]: *See* 47 C.F.R. §§ 54.504(b)(4) and (c).

[^21]: We estimate that the appeals granted in this Order involve
    applications for approximately \$15.2 million in funding for Funding
    Years 1999-2005. We note that USAC has already reserved sufficient
    funds to address outstanding appeals. *See, e.g.,* Universal Service
    Administrative Company, Federal Universal Service Support Mechanisms
    Fund Size Projections for the Second Quarter 2007 (Jan. 31, 2007).
    Thus, we determine that the action we take today should have minimal
    impact on the Universal Service Fund as a whole.

[^22]: *See infra* para. 10.

[^23]: Nothing in this order is intended to authorize or require payment
    of any claim that has previously been released by a service provider
    or applicant, including in a civil settlement or criminal plea
    agreement with the United States.

[^24]: *See* 47 C.F.R. § 54.504(c).

[^25]: *See* Application for Review of Aberdeen School District; Request
    for Review of Abilene Free Public Library; Petition for
    Reconsideration of Albany Public Library; Request for Review of
    Augusta County School District; Request for Review of Bank Street
    School for Children; Request for Review of Bath School Department;
    Request for Review of Bethlehem Area Public Library; Request for
    Review of B.F. Jones Memorial Library Aliquippa District Library
    Center; Request for Review of Calumet City Public Library; Request
    for Review of Chippewa Hills School District; Request for Review of
    Chowchilla Union High School District; Request for Review and/or
    Waiver of Cumberland County School District; Request for Review of
    David Douglas School District 40; Request for Review of Hydaburg
    City School; Request for Review of Jackson-Hinds Library System;
    Request for Review of Johnson Elementary School; Request for Review
    of Kennewick School District; Request for Review of Madawaska School
    District; Request for Review of Maine School Administration District
    No. 9; Request for Waiver of Marvin L. Winans Academy of Performing
    Arts; Request for Review of Milton School District; Request for
    Review of Modesto City Schools; Request for Review of Nelson Public
    School District; Request for Review of Norborne R-VIII School
    District; Request for Review of Onondaga-Cortland Madison BOCES;
    Request for Review of Princeton R-5 School; Request for Review of
    Prosser School District No. 116; Request for Review of Rapides
    Parish Library; Request for Review of Richland School District;
    Request for Review of Sycamore Community Schools; Request for Review
    and/or Waiver of Waverly City Schools; Request for Review of Western
    Ohio Computer Organization; Request for Review of White Settlement
    Independent School District; Request for Review of Willits Charter
    School.

[^26]: 47 C.F.R. § 54.504(c).

[^27]: *Bishop Perry Order*, 21 FCC Rcd at 5321, para. 11.

[^28]: *Id*. at paras. 10-11.

[^29]: *Id.* at para. 11.

[^30]: *See id.* at paras. 2, 9.

[^31]: 47 C.F.R. § 54.504(c).

[^32]: *See* Request for Review of Atlantic County Library System;
    Request for Review of Butternut School District; Request for Review
    of Clark Township School District; Request for Waiver of Cooperative
    Educational Service Agency No. 7; Request for Review of Dallas
    County School District 1; Request for Review of Ewing Public
    Schools; Request for Review of Graham Independent School District;
    Request for Review of Islesboro School District; Request for Review
    of Los Angeles Unified School District; Request for Waiver of Mason
    Public School District; Request for Review of Miles City Unified
    School District; Request for Waiver of Nottingham School; Request
    for Review of Swampscott Public Schools.

[^33]: *See* Request for Waiver of Bedford Public Schools; Application
    for Review of Custer County School District; Request for Review of
    Manton JT Union Elementary School District; Request for Waiver of
    Philadelphia-Montgomery Christian Academy.

[^34]: *See* Request for Review of Anchorage School District; Request
    for Review of Brunswick County Schools; Request for Review of
    Columbia Union School District; Request for Review of Danville City
    School District; Request for Review of Helena Public School District
    No. 1; Request for Review of Howell Township Public Schools; Request
    for Review of Latch School Inc.; Request for Review of North Scott
    Community School District; Request for Review of The School District
    of Palm Beach County; Request for Review of United School District.

[^35]: In the Request for Review of Butternut School District
    (Butternut)*,* we find that USAC erred in denying the school
    district funding for telecommunications services. The certification
    date of Butternut's FCC Form 471 was February 4, 2004, after the
    January 16, 2004 allowable contract date. In the Request for Review
    of United School District (United)*,* we find that USAC also erred
    in denying United's funding. The FCC Form 470 filed by United School
    District for the services at issue indicated that the applicant was
    seeking a multi-year contract.

[^36]: *See* 47 C.F.R. § 54.504(b)(4).

[^37]: 47 C.F.R. § 54.504(b)(4).

[^38]: During post-funding review, USAC determined that Atlantic County
    Library System (Atlantic), Los Angeles Unified School District (Los
    Angeles); and Swampscott School District (Swampscott) had agreements
    with their service providers prior to the allowable contract date,
    and that Kennewick School District (Kennewick) provided the wrong
    classification of service on its FCC Form 470, both violations of
    the Commission's competitive bidding rules. Los Angles, Swampscott
    and Kennewick were then subject to funding commitment adjustments by
    USAC which rescinded their funding commitments. In light of our
    decision, we direct USAC to discontinue recovery actions against
    Atlantic, Los Angeles, Swampscott and Kennewick.

[^39]: *See* Request for Review of Adel-DeSoto-Minburn Community School
    District.

[^40]: *Id.* at 1.

[^41]: There is a limited exception for existing, binding contracts.
    *See* 47 C.F.R. § 54.511(c).

[^42]: *Id*.

[^43]: *See Request for Review of the Decision of the Universal Service
    Administrator by Henrico County School District, Richmond, Virginia,
    Federal-State Joint Board on Universal Service*, File No.
    SLD-209204, CC Docket No. 96-45, Order, 17 FCC Rcd 706 (APD 2002)
    (denying a request for review where applicant relied upon a an FCC
    Form 470 posted in Funding Year 3 in support of its Funding Year 2
    service requests).

[^44]: *See supra* para. 6.

[^45]: *Comprehensive Review NPRM,* 20 FCC Rcd at 11325, para. 40.

[^46]: USAC shall also apply this 15-day opportunity to applications
    with these types of appeals currently before USAC. *See Bishop Perry
    Order*, 21 FCC Rcd at 5326, para. 23.

[^47]: Applicants will be presumed to have received notice five days
    after such notice is postmarked by USAC. USAC, however, shall
    continue to work beyond the 15 days with applicants attempting in
    good faith to amend their applications.

[^48]: We note that applicants will retain the ability to appeal
    decisions denying funding requests on the grounds discussed herein.

[^49]: The relief granted to Danville City School District applies only
    to the 28-day competitive bidding violation in Funding Request
    Number 1044175.