**Before the**

**Federal Communications Commission**

**Washington, DC 20554**

In the Matter of )

)

Requests for Review and Waiver of Decisions )

of the Universal Service Administrator by )

)

State of Arkansas )

Department of Information Systems ) File Nos. SLD-395179, 414047,

Little Rock, Arkansas, *et al*. ) 430652, 446008, *et al*.

)

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

Support Mechanism )

**order**

**Adopted: June 13, 2008 Released: June 13, 2008**

By the Acting Chief, Telecommunications Access Policy Division, Wireline
Competition Bureau:

# introduction

1.  In this order, we grant two appeals of decisions by the Universal
    Service Administrative Company (USAC) filed by the State of Arkansas
    Department of Information Systems (Arkansas DIS) on behalf of itself
    and 15 other school and library applicants within the state of
    Arkansas.[^1] USAC denied 60 requests for funding from these 16
    applicants on the grounds that the applicants failed to timely
    submit an FCC Form 471, FCC Form 486, or FCC Form 472 for Funding
    Years (FYs) 2004 and 2005 under the schools and libraries universal
    service support mechanism, also known as the E-rate program.[^2]
    Upon review of these records, we find that the issue raised in the
    first appeal relating to 59 of the funding requests was addressed by
    the Wireline Competition Bureau (Bureau) in the *Alaska Gateway
    Order*.[^3] We find that the issue raised in the second appeal
    relating to one funding request was addressed by the Commission in
    the *Bishop Perry Order*.[^4] Therefore, we remand the underlying
    applications to USAC for further action consistent with the *Alaska
    Gateway Order* and the *Bishop Perry Order*. To ensure that the
    underlying applications are resolved expeditiously, we direct USAC
    to complete its review of each application listed in Appendices A
    and B and issue an award or a denial based on a complete review and
    analysis no later than October 31, 2008 for those applications
    listed in Appendix A and no later than 30 calendar days after the
    release date of this order for the application listed in Appendix
    B.[^5]

# BACKGROUND

2.  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.[^6] Once the school or library has complied
    with the Commission's competitive bidding requirements and entered
    into an agreement 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 whom the applicant has entered
    into an agreement, and an estimate of the funds needed to cover the
    discounts to be given for eligible services.[^7] After the FCC Form
    471 has been processed, USAC then issues a funding commitment
    decision letter indicating the funding, if any, the applicant is
    approved to receive.[^8]

3.  After the funding year begins and the applicant begins receiving
    services at the discounted rate, the applicant submits an FCC Form
    486 to USAC. The FCC Form 486 indicates that the service has begun,
    specifies the service start date and demonstrates that the applicant
    has received approval of its technology plans.[^9] The timely
    submission of an FCC Form 486 ensures that disbursements for
    discounts on eligible services occur in a prompt and efficient
    manner. Because the FCC Form 486 indicates the actual service start
    date, USAC will only issue disbursements to the service provider for
    discounts on eligible services after receipt of the form.[^10] The
    FCC Form 486 must be postmarked no later than 120 days after the
    date service began, or no later than 120 days after the date of the
    funding commitment decision letter, whichever is later, to receive
    discounts retroactively to the service start date.[^11] If the FCC
    Form 486 is filed after the later of these deadlines, the start date
    for discounted services resets to 120 days before the postmark date
    of the late-filed FCC Form 486.[^12] No funding is provided for
    services rendered prior to the new start date and funding
    commitments are reduced for the relevant funding request.[^13]

4.  After the eligible services have been delivered, the applicant
    determines which payment method to use to secure reimbursement from
    USAC for the services rendered under the E-rate program.[^14] If the
    applicant pays the full cost of the services, then the applicant
    must submit an FCC Form 472, Billed Entity Application for
    Reimbursement (BEAR) invoice form, to secure reimbursement from
    USAC.[^15] If the applicant pays only the reduced cost of the
    services, then the service provider must file an FCC Form 474,
    Service Provider Invoice (SPI) form, to receive its
    reimbursement.[^16] Based on information provided on the FCC Form
    472 or the FCC Form 474, USAC remits the E-rate support payments to
    the service provider.[^17] Service providers reimbursing applicants
    (billed entities) via the BEAR process must remit the amount
    authorized by USAC to the billed entity within 20 business days of
    receiving the reimbursement payment.[^18] The relevant invoice forms
    must be postmarked no later than 120 days after the date of the FCC
    Form 486 NL or 120 days after the last day to receive service,
    whichever is later.[^19] An applicant may request an extension of
    the filing deadline.[^20]

5.  The Arkansas DIS submitted two appeals of decisions by USAC denying
    60 requests for funding from 16 applicants on the grounds that they
    failed to timely submit an FCC Form 471, FCC Form 486, or FCC Form
    472 for FYs 2004 and 2005 under the E-rate program. In its requests
    for review and waiver, the Arkansas DIS argues, on behalf of itself
    and 15 other applicants, that the untimely or missed filings were
    the result of either clerical, ministerial, or procedural errors on
    the part of staff members.[^21]

# discussion

6.  We grant Arkansas DIS' requests for review and waiver.[^22] We
    consider these two requests separately below.[^23]

7.  *[FY 2004 Applications Denied for Untimely Filed or Missing FCC
    Forms 486 or 472]{.underline}*. Arkansas DIS requests a waiver of
    the FCC Form 486 or FCC Form 472 filing deadlines for itself and 14
    other applicants for FY 2004.[^24] The requests for funding were
    denied or reduced because USAC found that the FCC Forms 486 or FCC
    Forms 472 were filed late or not filed at all.[^25] Arkansas DIS
    argues that the late or missed filings were a result of E-rate
    personnel changes and confusion with E-rate program rules.[^26]

8.  Consistent with precedent,[^27] and based on the facts and the
    circumstances of these specific cases, we find that good cause
    exists to waive the deadline for filing the FCC Forms 486 and any
    subsequent deadlines, such as the deadline for submitting the FCC
    Forms 472, for the processing of the underlying applications
    associated with this request.[^28] Generally, Arkansas DIS claims
    that staff mistakes or confusion resulted in missing the FCC Form
    486 or FCC Form 472 deadlines, or untimely filing the FCC Form
    486.[^29] As the Bureau found in the *Alaska Gateway Order*, given
    that the applicants missed a USAC procedural deadline and did not
    violate a Commission rule, we find that the complete rejection of
    each of these applications is not warranted.[^30] We note that the
    primary jobs of most of the people filling out these forms include
    school administrators, technology coordinators and teachers, as
    opposed to staff dedicated to pursuing federal grants, especially in
    small school districts or libraries. Thus, even when a school or
    library official becomes adept at the application process,
    unforeseen events or emergencies may delay filings in the event
    there is no other person proficient enough to complete the forms.
    Furthermore, some of the errors may have been caused by third
    parties or unforeseen events and therefore were not the fault of
    these applicants. Notably, at this time, there is no evidence of
    waste, fraud or abuse, misuse of funds, or a failure to adhere to
    core program requirements. Accordingly, we grant Arkansas DIS'
    request for waiver of the FCC Form 486 and FCC Form 472 filing
    deadlines and remand the underlying applications to USAC for further
    processing consistent with this order. We direct USAC to complete
    its review of each application listed in Appendix A and issue an
    award or a denial based on a complete review and analysis no later
    than November 30, 2008.[^31]

9.  During this period, we direct USAC to contact the applicants at
    issue to identify those schools and libraries that did not file
    their FCC Forms 486 within 120 days from the date of their funding
    commitment decision letter or service start date, whichever is
    later, or their FCC Form 472 within the relevant timeframe.[^32]
    Consistent with the Bureau's direction in the *Alaska Gateway
    Order*, the purpose of this outreach effort is to provide the
    applicants with an opportunity to file their FCC Forms 486 or
    472.[^33] Since many of the schools at issue, however, are not in
    session during the summer months, applicants will have until October
    31, 2008 to submit complete and accurate information to USAC.

10. We emphasize, however, the limited nature of this decision. Because
    the FCC Form 486 contains the CIPA certification, all applicants
    must file this form with USAC.[^34] Furthermore, we recognize that
    filing deadlines are necessary for the efficient administration of
    the E-rate program. Thus, while we grant this request as it pertains
    to these applicants and waive the deadline for filing the FCC Forms
    486, we do not waive the requirement of the filing itself. We
    continue to require E-rate applicants to submit complete and
    accurate information to USAC as part of the application and invoice
    review process. Thus, we remind applicants that it is incumbent upon
    them, if they seek reimbursement of payments for services rendered,
    to file complete and accurate FCC Forms 486 and FCC Forms 472 with
    USAC.[^35] Further, in remanding these applications to USAC, we make
    no finding as to the ultimate eligibility of the requested
    services.[^36]

11. *[FY 2005 Application Denied for an Untimely Filed FCC Form
    471]{.underline}*. On February 15, 2005, Arkansas DIS filed an FCC
    Form 471 requesting \$27,614.00 a month for FRN 1342094 for FY
    2005.[^37] On March 8, 2005, USAC sent an FCC Form 471 Receipt
    Acknowledgment Letter (RAL) to Arkansas DIS.[^38] Arkansas DIS
    claims that, instead of \$27,614.00 a month, the FCC Form 471 should
    have requested \$489,993.86 per month---a post-discount difference
    of more than \$4.1 million over the course of the funding year.[^39]
    On May 4, 2005, Arkansas DIS filed a letter with USAC seeking an
    investigation into the amount entered for FRN 1342094.[^40] USAC
    responded by noting that there were no changes to the data entered
    into the system for the FRN at issue and that the numbers appearing
    for this application "are the numbers that were entered as the
    application was prepared online."[^41] On May 9, 2005, Arkansas DIS
    filed another FCC Form 471 requesting the proper amount of funding
    of \$489,993.86 per month.[^42] Since this request was filed after
    the window for filing FY 2005 applications had closed, it was denied
    by USAC on May 17, 2005.[^43] On June 7, 2005, Arkansas DIS
    submitted an Item 21 Attachment for its initial FCC Form 471
    (Application No. 446008), demonstrating that it was seeking
    approximately \$4.6 million in pre-discount funding for a wide area
    network with Southwestern Bell Company.[^44] Despite the Item 21
    Attachment submitted by Arkansas DIS showing that the services were
    approximately \$490,000.00 per month, the originally submitted
    funding request for approximately \$27,600.00 a month was approved
    by USAC in a funding commitment decision letter issued on February
    8, 2006.[^45] Arkansas DIS then filed the instant request for review
    and waiver with the Commission on July 21, 2006.[^46] Arkansas DIS
    states that the error on its initial FCC Form 471 (Application
    No. 446008) was a ministerial and clerical error and that it should
    be allowed the opportunity to correct such error.[^47] Additionally,
    Arkansas DIS requests a waiver of the filing deadline for the
    subsequent FCC Form 471 (Application No. 489075) to allow it to
    submit the corrected FCC Form 471 outside the filing window.[^48]

12. Consistent with precedent,[^49] and based on the facts and
    circumstances of this case, we find that good cause exists to waive
    the deadline for filing the FCC Form 471 found in section 54.507 of
    the Commission's rules.[^50] In this instance, Arkansas DIS
    committed an error in completing its initial FCC Form 471 submission
    by mistakenly including an incorrect funding request amount.
    Arkansas subsequently realized its error and took steps to correct
    its error by filing an accurate FCC Form 471 and an Item 21
    Attachment as part of its initial FCC Form 471 submission
    demonstrating the actual amount it was seeking in funding for the
    requested services.[^51] Based on the record before us, we thus find
    that the mistake at issue here is sufficiently similar to those in
    the *Bishop Perry Order*, warranting a waiver of the Commission's
    rules. As the Commission noted in the *Bishop Perry Order*, many
    E-rate program beneficiaries, particularly small entities, contend
    that the application process is complicated, resulting in a
    significant number of applications for E-rate support being denied
    for ministerial, clerical or procedural errors.[^52] Therefore, as
    in the *Bishop Perry Order*, we find that the complete rejection of
    this application is not warranted, given that the violation at issue
    is procedural, not substantive.[^53] Like the applicants in the
    *Bishop Perry Order*, Arkansas DIS has demonstrated that rigid
    adherence to filing procedures does not further the purposes of
    section 254(h) of the Communications Act of 1934, as amended (the
    Act), or serve the public interest.[^54] Specifically, section 254
    of the Act directs the Commission to "enhance . . . access to
    advanced telecommunications and information services for all public
    and non-profit elementary and secondary school classrooms, health
    care providers and libraries."[^55] Because Arkansas DIS, who is
    eligible for funding, will now receive the opportunity for that
    funding where previously it was denied for minor errors, we believe
    that granting this waiver, in this instance, furthers the goals of
    section 254 of the Act. We also find that a denial of funding in
    this instance inflicts undue hardship on the applicant. In addition,
    at this time, there is no evidence of waste, fraud or abuse, misuse
    of funds, or a failure to adhere to core program requirements. We
    therefore grant Arkansas DIS' request for review and waiver with
    respect to FRN 1342094 and remand the underlying application to USAC
    for further processing consistent with this order. In remanding this
    application to USAC, we make no finding as to the ultimate
    eligibility of the requested services. To ensure that the underlying
    application is resolved expeditiously, we direct USAC to complete
    its review of the underlying application listed in Appendix B and
    issue an award or a denial based on a complete review and analysis
    no later than 30 calendar days from the release date of this
    order.[^56]

13. Finally, we emphasize that the Commission is 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 requests for review and waiver addressed here,
    this action does not affect the authority of the Commission or USAC
    to conduct audits or 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 the
    Commission's rules, such proceedings can reveal instances in which
    universal service funds were disbursed improperly or in a manner
    inconsistent with the statute or the Commission's rules. To the
    extent the Commission finds that funds were not used properly, the
    Commission will require USAC to recover such funds through its
    normal processes. We emphasize that the Commission retains 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. The Commission remains 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.

# ordering clauses

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 pursuant to authority delegated in
    sections 0.91, 0.291, 1.3, and 54.722(a) of the Commission's rules,
    47 C.F.R. §§ 0.91, 0.291, 1.3 and 54.722(a), that the Arkansas
    requests for review and waiver filed on behalf of itself and the
    applicants as listed in Appendices A and B ARE GRANTED and the
    underlying applications ARE REMANDED to USAC for further processing
    consistent with this order.

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 pursuant to authority delegated in
    sections 0.91, 0.291, 1.3 and 54.722(a) of the Commission's rules,
    47 C.F.R. §§ 0.91, 0.291, 1.3 and 54.722(a), that the requirements
    contained in sections 54.504(c) and 54.507(c) of the Commission's
    rules, section 47 C.F.R. §§ 54.504(c) and 54.507(c), ARE WAIVED as
    described herein.

16. IT IS FURTHER ORDERED that, 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 pursuant to authority delegated in
    sections 0.91 and 0.291 of the Commission's rules, 47 C.F.R. §§ 0.91
    and 0.291, USAC SHALL COMPLETE its review of each remanded
    application listed in Appendix A and ISSUE an award or a denial
    based on a complete review and analysis no later than October 31,
    2008.

17. IT IS FURTHER ORDERED that, 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 pursuant to authority delegated in
    sections 0.91 and 0.291 of the Commission's rules, 47 C.F.R. §§ 0.91
    and 0.291, USAC SHALL COMPLETE its review of the remanded
    application listed in Appendix B and ISSUE an award or a denial
    based on a complete review and analysis no later than 30 calendar
    days from the release date of this order.

18. IT IS FURTHER ORDERED, pursuant to section 1.102(b)(1) of the
    Commission's rules, 47 C.F.R. § 1.102(b)(1), that this order SHALL
    BE EFFECTIVE upon release.

    FEDERAL COMMUNICATIONS COMMISSION

    Jennifer K. McKee

    Acting Chief

    Telecommunications Access Policy Division

    Wireline Competition Bureau

19. **APPENDIX A**

    **[FY 2004 Applications Denied for Untimely Filed or Missing FCC
    Forms 486 or 472]{.underline}**

+-----------------------+----------+-------------+--------------------+
| **Applicant Name**    | **App    | **FRNs**    | **Service Provider |
|                       | lication |             | Name**             |
|                       | Number** |             |                    |
+-----------------------+----------+-------------+--------------------+
| Bradley Public School | 408300   | 1120375     | Walnut Hill        |
| District              |          |             | Telephone Company  |
|                       |          |             |                    |
| Bradley, AR           |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| City of Springdale    | 422734   | 1165933     | Southwestern Bell  |
|                       |          |             | Telephone Company  |
| Springdale, AR        |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Conway Public School  | 390688   | 1070482     | ALLTEL             |
| District 1            |          |             | Communications,    |
|                       |          |             | Inc.               |
| Conway, AR            |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Corning Branch        | 412631   | 1132224     | CenturyTel of      |
| Library               |          |             | Central Arkansas,  |
|                       |          |             | LLC                |
| Corning, AR           |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Dover Public School   | 405023   | 1131429,    | CenturyTel of      |
| District 17           |          | 1131519,    | Arkansas, Inc.     |
|                       |          | 1131878,    |                    |
| Dover, AR             |          | 1131940,    | Cingular Wireless, |
|                       |          | 1131699,    | Inc.               |
|                       |          | 1131897,    |                    |
|                       |          | 1140232,    |                    |
|                       |          | 1140276,    |                    |
|                       |          | 1140409,    |                    |
|                       |          | 1140453,    |                    |
|                       |          | 1140520,    |                    |
|                       |          | 1140549     |                    |
+-----------------------+----------+-------------+--------------------+
| Dumas Public School   | 422209   | 1172346     | AT&T Corp.         |
| District              |          |             |                    |
|                       |          |             |                    |
| Dumas, AR             |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Dumas Public School   | 424462   | 1172843     | Cingular Wireless, |
| District              |          |             | Inc.               |
|                       |          |             |                    |
| Dumas, AR             |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Eudora School         | 427864   | 1188100,    | Southwestern Bell  |
| District              |          | 1188163     | Communications     |
|                       |          |             | Services, Inc.     |
| Eudora, AR            |          |             |                    |
|                       |          |             | Southwestern Bell  |
|                       |          |             | Telephone Company  |
+-----------------------+----------+-------------+--------------------+
| Nettleton Public      | 422219   | 1178293     | Dell Marketing LP  |
| School District       |          |             |                    |
|                       |          |             |                    |
| Jonesboro, AR         |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Ouachita Public       | 388929   | 1066881     | MCI Communications |
| School District 1     |          |             | Corporation        |
|                       |          |             |                    |
| Woodstock, GA         |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Ozark Public School   | 408684   | 1120225     | CenturyTel of      |
| District 14           |          |             | Central Arkansas,  |
|                       |          |             | LLC                |
| Ozark, AR             |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Randolph County       | 402769   | 1102121     | CenturyTel of      |
| School District 1     |          |             | Central Arkansas,  |
|                       |          |             | LLC                |
| Ravenden Springs, AR  |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Riverview School      | 401644   | 1100316     | AT&T Corp.         |
| District              |          |             |                    |
|                       |          |             |                    |
| Searcy, AR            |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Shirley Public School | 397766   | 1101605,    | Arkansas Telephone |
| District              |          | 1115802     | Company            |
|                       |          |             |                    |
| Shirley, AR           |          |             | Cingular Wireless, |
|                       |          |             | Inc.               |
+-----------------------+----------+-------------+--------------------+
| State of Arkansas     | 395179   | 1360822,    | Windstream         |
| Department of         |          | 1360808,    | Communications,    |
| Information Systems   |          | 1360810     | Inc.               |
|                       |          |             |                    |
| Little Rock, AR       |          |             | Central Arkansas   |
|                       |          |             | Telephone          |
|                       |          |             | Co-Operative, Inc. |
|                       |          |             |                    |
|                       |          |             | Northern Arkansas  |
|                       |          |             | Telephone Company, |
|                       |          |             | Inc.               |
+-----------------------+----------+-------------+--------------------+
| State of Arkansas     | 414047   | 1206339,    | Southwestern Bell  |
| Department of         |          | 1206353,    | Telephone Company  |
| Information Systems   |          | 1206501,    |                    |
|                       |          | 1206511,    | ALLTEL             |
| Little Rock, AR       |          | 1206576,    | Communications,    |
|                       |          | 1206679,    | Inc.               |
|                       |          | 1206589,    |                    |
|                       |          | 1206670,    | Arkansas Telephone |
|                       |          | 1206672,    | Company, Inc.      |
|                       |          | 1206676,    |                    |
|                       |          | 1206682,    | CenturyTel of      |
|                       |          | 1206685,    | Central Arkansas,  |
|                       |          | 1206707,    | LLC                |
|                       |          | 1206230,    |                    |
|                       |          | 1206254,    | Southwestern Bell  |
|                       |          | 1206265,    | Telephone, L.P.    |
|                       |          | 1206274,    |                    |
|                       |          | 1206328,    |                    |
|                       |          | 1206333     |                    |
+-----------------------+----------+-------------+--------------------+
| State of Arkansas     | 430652   | 1197839,    | Southwestern Bell  |
| Department of         |          | 1198143,    | Telephone Company  |
| Information Systems   |          | 1198804,    |                    |
|                       |          | 1199177,    | CenturyTel of      |
| Little Rock, AR       |          | 1199822,    | Mammoth Spring     |
|                       |          | 1199884,    | Jacksonville       |
|                       |          | 1200102,    |                    |
|                       |          | 1200212     | ALLTEL             |
|                       |          |             | Communications,    |
|                       |          |             | Inc.               |
+-----------------------+----------+-------------+--------------------+
| Stephens Public       | 417069   | 1147155     | Southwestern Bell  |
| Library District      |          |             | Communications     |
|                       |          |             | Services, Inc.,    |
| Stephens, AR          |          |             |                    |
+-----------------------+----------+-------------+--------------------+
| Williford Elementary  | 404039   | 1106463     | ALLTEL             |
| School                |          |             | Communications,    |
|                       |          |             | Inc.               |
| Williford, AR         |          |             |                    |
+-----------------------+----------+-------------+--------------------+

**APPENDIX B**

**[FY 2005 Application Denied for an Untimely Filed FCC Form
471]{.underline}**

+-----------------------+----------+---------------+------------------+
| **Applicant Name**    | **App    | **FRN**       | **Service        |
|                       | lication |               | Provider Name**  |
|                       | Number** |               |                  |
+-----------------------+----------+---------------+------------------+
| State of Arkansas     | 446008   | 1342094       | SBC Advanced     |
| Department of         |          |               | Solutions, Inc.  |
| Information Systems   |          |               |                  |
|                       |          |               |                  |
| Little Rock, AR       |          |               |                  |
+-----------------------+----------+---------------+------------------+

[^1]: Letters from Becky Rains, State of Arkansas Department of
    Information Systems, to Federal Communications Commission, CC Docket
    No. 02-6 (filed Dec. 13, 2005 and Oct. 5, 2007) (FY 2004 Arkansas
    DIS Request for Waiver); Letter from Becky Rains, State of Arkansas
    Department of Information Systems, to Federal Communications
    Commission, CC Docket No. 02-6 (filed July 21, 2006) (FY 2005
    Arkansas DIS Request for Review and Waiver) (collectively, Arkansas
    DIS Requests for Review). The relevant applicants, application
    numbers, and funding request numbers (FRNs) are attached at
    Appendices A and B. In this order, we use the term "appeals" to
    generally refer to requests for review of decisions by USAC. Section
    54.719(c) of the Commission's rules provides that any person
    aggrieved by an action taken by a division of USAC may seek review
    from the Commission. 47 C.F.R. § 54.719(c).

[^2]: Funding Years start July 1^st^ and run through June 30^th^ of the
    following year.

[^3]: *See Request for Review of the Decision of the Universal Service
    Administrator by Alaska Gateway School District, Tok, AK, et al.,
    Schools and Libraries Universal Service Support Mechanism,* File
    Nos. SLD-412028, *et al.*, CC Docket No. 02-6, Order, 21 FCC Rcd
    10182 (Wireline Comp. Bur. 2006) (*Alaska Gateway Order*) (finding
    good cause to waive USAC's FCC Form 486 filing deadline for several
    applicants).

[^4]: *Request for Review of the Decision of the Universal Service
    Administrator by Bishop Perry Middle School, New Orleans, LA, et
    al., Schools and Libraries Universal Service Support Mechanism,*
    File Nos. SLD-487170, *et al.*, CC Docket No. 02-6, Order, 21 FCC
    Rcd 5316 (2006) (*Bishop Perry Order*) (waiving the Commission's
    rules to allow applicants additional time to file their FCC Forms
    471).

[^5]: In performing a complete review and analysis of each underlying
    application, USAC shall either grant the underlying application
    before it, or, if denying the application, provide the applicant
    with any and all grounds for denial.

[^6]: 47 C.F.R. §§ 54.501-54.503.

[^7]: 47 C.F.R. § 54.504(c); *see, e.g.,* Schools and Libraries
    Universal Service, Services Ordered and Certification Form, OMB
    3060-0806 (November 2004) (FCC Form 471).

[^8]: Each funding request listed on an applicant's FCC Form 471 must
    include a description of the products and services for which
    discounts are sought. This description is known as an "Item 21
    Attachment." USAC website, Item 21 Attachments for Form 471,
    <http://www.universalservice.org/sl/applicants/step07/form471-attachments.aspx>
    (retrieved May 26, 2008).

[^9]: Instructions for Completing the Schools and Libraries Universal
    Service, Receipt of Service Confirmation Form (FCC Form 486), OMB
    3060-0853 at 2 (August 2003) (FCC Form 486 Instructions).

[^10]: *See, e.g.,* FCC Form 486 Instructions at 2; *see* *also
    Federal-State Joint Board on Universal Service, Children's Internet
    Protection Act*, CC Docket No. 96-45, Order, 17 FCC Rcd 12443,
    12444, para. 4 (2002) (*CIPA II Order*); 47 C.F.R. § 54.520. Under
    the Children's Internet Protection Act (CIPA) and the Neighborhood
    Children's Internet Protection Act (NCIPA), Congress imposed new
    conditions on schools with Internet access that request discounted
    services under the E-rate program. 47 U.S.C. § 254(h)(5), 254(l).
    Schools seeking E-rate funding for Internet access or internal
    connections services must certify that they comply with these
    conditions on the FCC Form 486.

[^11]: *CIPA II Order*, 17 FCC Rcd at 12445, para. 5; FCC Form 486
    Instructions at 6. Upon successful data entry of the FCC Form 486
    and the FCC Form 486 certifications, USAC will issue and FCC Form
    486 Notification Letter (FCC Form 486 NL) to both the applicant and
    service provider(s). USAC website, Form 486 Filing Information,
    <http://www.universalservice.org/sl/applicants/step10/form486-filing-information.aspx>
    (retrieved May 26, 2008).

[^12]: *CIPA II Order*, 17 FCC Rcd at 12445, para. 5; FCC Form 486
    Instructions at 6.

[^13]: *CIPA II Order*, 17 FCC Rcd at 12445, para. 5; FCC Form 486
    Instructions at 6.

[^14]: *See* *Schools and Libraries Universal Service Support
    Mechanism*, CC Docket No. 02-6, Second Report and Order and Further
    Notice of Proposed Rulemaking, 18 FCC Rcd 9202, 9217-19, paras.
    44-50 (2003) (*Second Report and Order*); *see also* USAC website,
    FCC Form 472 Billed Entity Applicant Reimbursement (BEAR) Filing
    Guidance, <http://www.sl.universalservice.org/reference/8bear.asp>
    (retrieved May 26, 2008); USAC website, Invoice Filing Information
    USAC, <http://www.universalservice.org/sl/applicants/step11/>
    (retrieved May 26, 2008). Beginning July 1, 2004, the Commission's
    rules require the service provider to allow the applicant to select
    the payment method governing the payment for services rendered in
    accordance with the E-rate program. *See* 47 C.F.R. §54.514 (b).

[^15]: USAC website, FCC Form 472, BEAR Form,
    <http://www.universalservice.org/_res/documents/sl/pdf/472.pdf>,
    (retrieved May 26, 2008).

[^16]: USAC website, FCC Form 474, SPI Form,
    <http://www.universalservice.org/_res/documents/sl/pdf/474.pdf>,
    (retrieved May 26, 2008).

[^17]: *See Schools and Libraries Universal Service Support Mechanism*,
    CC Docket No. 02-6, Notice of Proposed Rulemaking, 17 FCC Rcd 1914,
    1919, para. 9; *see also Second Report and Order*, 18 FCC Rcd at
    9217, para. 42.

[^18]: *See* 47 C.F.R. § 54.514(b); *see also* *Second Report and
    Order*, 18 FCC Rcd at 9219, para.51.

[^19]: *See* USAC website, Invoice Deadlines and Extension Requests,
    <http://www.universalservice.org/sl/applicants/step11/invoice-deadlines-extension-requests.aspx>
    (retrieved May 26, 2008); *supra* n.11 (describing the FCC Form 486
    NL)*.*

[^20]: *See*
    <http://www.universalservice.org/sl/applicants/step11/invoice-deadlines-extension-requests.aspx>
    (retrieved May 26, 2008).

[^21]: *See* Arkansas DIS Requests for Review.

[^22]: 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. *Northeast 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.

[^23]: We estimate that the appeals granted in this order involve
    applications for approximately \$6.6 million in funding. We note
    that USAC has already reserved sufficient funds to address the
    outstanding appeals. Universal Service Administrative Company,
    Federal Universal Service Support Mechanisms Fund Size Projections
    for the Third Quarter 2008 (May 2, 2008). Thus, we determine that
    the action we take today should have minimal impact on the universal
    service fund as a whole.

[^24]: *See* FY 2004 Arkansas DIS Request for Waiver; Appendix A.

[^25]: *See* FY 2004 Arkansas DIS Request for Waiver.

[^26]: *Id*.

[^27]: *See Alaska Gateway Order*, 21 FCC Rcd 10182.

[^28]: *See* Appendix A. Because we waive the FCC Form 486 deadline,
    applicants should receive funding from their actual service start
    date.

[^29]: *See* FY 2004 Arkansas DIS Request for Review.

[^30]: *Alaska Gateway Order*, 21 FCC Rcd at 10185-86, para. 7.

[^31]: In performing a complete review and analysis of each underlying
    application, USAC shall either grant the underlying application
    before it, or, if denying the application, provide the applicant
    with any and all grounds for denial.

[^32]: The service start date can be determined from Block 5 of the
    applicant's FCC Form 471.

[^33]: *See Alaska Gateway Order*, 21 FCC Rcd 10182.

[^34]: *See supra* n.10.

[^35]: Although applicants are generally given an opportunity to file a
    request for an extension of the invoice deadline with USAC, no
    further extensions, other than the extension provided above, will be
    provided to these applicants. *See supra* para. 4. We find that the
    extension provided above is an adequate amount of time to provide
    these applicants with an opportunity to file the FCC Form 472.

[^36]: 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.

[^37]: FY 2005 Request for Review and Waiver at 2; FCC Form 471, State
    of Arkansas Department of Information Systems (Application No.
    446008) (cert. Feb. 18, 2005). The total funding commitment request
    for this FRN was \$269,226.00. *See id*. at Block 5.

[^38]: Letter from USAC, Schools and Libraries Division, to Becky Rains,
    State of Arkansas Department of Information Systems (dated Mar. 8,
    2005) (RAL).

[^39]: FY 2005 Request for Review and Waiver at 2.

[^40]: Letter from Becky Rains, State of Arkansas Department of
    Information Systems, to USAC, Schools and Libraries Division, (dated
    May 4, 2005) (RAL Request).

[^41]: E-mail from USAC, Schools and Libraries Division, to Becky Rains,
    State of Arkansas Department of Information Systems (dated May 10,
    2005).

[^42]: *Id*. at 3; FCC Form 471, State of Arkansas Department of
    Information Systems (Application No. 489075) (cert. May 9, 2005).
    The total funding commitment request for this FRN was
    \$4,440,004.74. *See id*. at Block 5.

[^43]: Letter from USAC, Schools and Libraries Division, to Becky Rains,
    State of Arkansas Department of Information Systems (dated May 17,
    2005). The FY 2005 application filing window opened on December 14,
    2004, and closed on February 18, 2005.

[^44]: E-mail from Becky Rains, State of Arkansas Department of
    Information Systems, to USAC, Schools and Libraries Division
    (attaching an Item 21 Attachment for FCC Form 471, Application No.
    446008) (dated June 7, 2005).

[^45]: Letter from USAC, Schools and Libraries Division, to Becky Rains,
    State of Arkansas Department of Information Systems (dated Feb. 8,
    2006).

[^46]: *See* FY 2005 Request for Review and Waiver.

[^47]: *Id.* at 3.

[^48]: *Id*. at 3-4.

[^49]: *See Bishop Perry Order*, 21 FCC Rcd 5316.

[^50]: *See* 47 C.F.R. § 54.507(c).

[^51]: *See supra* para. 8.

[^52]: *See Bishop Perry Order,* 21 FCC Rcd at 5316-17, para. 2.

[^53]: *Id*. at 5323, para. 14.

[^54]: *See* 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.

[^55]: *See* 47 U.S.C. § 254(h).

[^56]: In performing a complete review and analysis of the underlying
    application, USAC shall either grant the underlying application
    before it, or, if denying the application, provide the applicant
    with any and all grounds for denial.