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 Federal  Communications  Commission  DA  01-  2457 
 Before  the  Federal  Communications  Commission 
 Washington,  DC  20554 


 In  the  Matter  of  ) 
 ) 
 Request  for  Review  of  the  ) 
 Decision  of  the  ) 
 Universal  Service  Administrator  by  ) 
 ) 
 United  Talmudical  Academy  )  File  No.  SLD-  105791 
 Brooklyn,  New  York  ) 
 ) 
 Federal-  State  Joint  Board  on  )  CC  Docket  No.  96-  45 
 Universal  Service  ) 
 ) 
 Changes  to  the  Board  of  Directors  of  the  )  CC  Docket  No.  97-  21 
 National  Exchange  Carrier  Association,  Inc.  ) 


 ORDER 
 Adopted:  October  19,  2001  Released:  October  23,  2001 
 By  the  Common  Carrier  Bureau: 
 1.  The  Common  Carrier  Bureau  has  under  consideration  a  Request  for  Review  filed 
 by  the  United  Talmudical  Academy(  UTA),  Brooklyn,  New  York,  seeking  review  of  a  decision 
 issued  by  the  Schools  and  Libraries  Division  (SLD)  of  the  Universal  Service  Administrative 
 Company  (Administrator).  1  UTA  seeks  review  of  SLDs  decision  on  remand  from  the 
 Commission  to  grant  only  some  of  UTAs  Funding  Year  1  requests  for  telecommunications 
 services.  2  SLD,  directed  by  the  Commission  to  consider  funding  of  UTAs  requests  for  basic 
 voice  telephone  service,  found  that  cellular  phone  service  and  Centrex  phone  service  did  not 
 constitute  basic  voice  telephone  services.  3  For  the  reasons  set  forth  below,  we  find  that  cellular 
 phone  service  is  basic  voice  telephone  service,  but  that  Centrex  is  not.  Therefore,  we  grant  in 
 part  and  deny  in  part  the  Request  for  Review  and  remand  again  for  further  consideration  of 
 UTAs  application. 


 2.  Under  the  schools  and  libraries  universal  service  support  mechanism,  eligible 
 schools,  libraries,  and  consortia  that  include  eligible  schools  and  libraries,  may  apply  for 


 1  Letter  from  Eugene  Sander,  United  Talmudical  Academy,  to  Federal  Communications  Commission,  filed 
 September  20,  2000  (Request  for  Review). 
 2  Section  54.  719(  c)  of  the  Commissions  rules  provides  that  any  person  aggrieved  by  an  action  taken  by  a  division 
 of  the  Administrator  may  seek  review  from  the  Commission.  47  C.  F.  R.    54.  719(  c). 
 3  Request  for  Review  at  1-  2. 
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 discounts  for  eligible  telecommunications  services,  Internet  access,  and  internal  connections.  4 
 The  Commissions  rules  require  that  the  applicant  make  a  bona  fide  request  for  services  by  filing 
 with  the  Administrator  an  FCC  Form  470,  which  is  posted  to  the  Administrators  website  for  all 
 potential  competing  service  providers  to  review.  5  After  the  FCC  Form  470  is  posted,  the 
 applicant  must  wait  at  least  28  days  before  entering  an  agreement  for  services  and  submitting  an 
 FCC  Form  471,  which  requests  support  for  eligible  services.  6  SLD  reviews  the  FCC  Forms  471 
 that  it  receives  and  issues  funding  commitment  decisions  in  accordance  with  the  Commissions 
 rules. 


 3.  On  the  FCC  Form  470,  applicants  must  attest  that  any  support  they  receive  is 
 conditional  upon  their  "securing  access  to  all  of  the  resources,  including  computers,  training, 
 software,  maintenance,  and  electrical  connections  necessary  to  use  the  services  purchased 
 effectively."  7  On  the  FCC  Form  471,  applicants  must  certify  that  they  have  secured  access  to  "to 
 all  of  the  resources,  including  computers,  training,  software,  maintenance,  and  electrical 
 connections  necessary  to  make  effective  use  of  the  services  purchased  as  well  as  to  pay  the 
 discounted  charges  for  eligible  services."  8  These  certifications  are  consistent  with  the 
 requirements  set  forth  in  the  Commission's  May  8,  1997  Universal  Service  Order.  9  In  that  order, 
 the  Commission  stated  that  applicants  for  schools  and  libraries  discounts  would  be  required  to 
 certify  in  their  requests  for  services  that  "all  of  the  necessary  funding  in  the  current  funding  year 
 has  been  budgeted  and  will  have  been  approved  to  pay  for  the  'non-  discount'  portion  of  requested 


 4  47  C.  F.  R.    54.  502,  54.  503. 
 5  Schools  and  Libraries  Universal  Service,  Description  of  Services  Requested  and  Certification  Form,  OMB  3060- 
 0806  (FCC  Form  470);  47  C.  F.  R.    54.504(  b);  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96- 
 45,  Report  and  Order,  12  FCC  Rcd  8776,  9078,  para.  575  (1997)  (Universal  Service  Order),  as  corrected  by 
 Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45,  Errata,  FCC  97-  157  (rel.  June  4,  1997), 
 affirmed  in  part,  Texas  Office  of  Public  Utility  Counsel  v.  FCC,  183  F.  3d  393  (5th  Cir.  1999)  (affirming  Universal 
 Service  First  Report  and  Order  in  part  and  reversing  and  remanding  on  unrelated  grounds),  cert.  denied,  Celpage, 
 Inc.  v.  FCC,  120  S.  Ct.  2212  (May  30,  2000),  cert.  denied,  AT&  T  Corp.  v.  Cincinnati  Bell  Tel.  Co.,  120  S.  Ct.  2237 
 (June  5,  2000),  cert.  dismissed,  GTE  Service  Corp.  v.  FCC,  121  S.  Ct.  423  (November  2,  2000). 


 6  47  C.  F.  R.    54.  504(  b),  (c);  Schools  and  Libraries  Universal  Service,  Services  Ordered  and  Certification  Form, 
 OMB  3060-  0806  (FCC  Form  471). 
 7  See  FCC  Form  470,  OMB  No.  3060-  0806,  at  Item  25  (December  1997). 


 8  See  FCC  Form  471,  OMB  No.  3060-  0806,  at  Item  22  (December  1997). 
 9  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45,  Report  and  Order,  12  FCC  Rcd  8776 
 (1997)  (Universal  Service  Order),  as  corrected  by  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No. 
 96-  45,  Errata,  FCC  97-  157  (rel.  June  4,  1997),  affirmed  in  part,  Texas  Office  of  Public  Utility  Counsel  v.  FCC,  183 
 F.  3d  393  (5th  Cir.  1999)  (affirming  Universal  Service  Order  in  part  and  reversing  and  remanding  on  unrelated 
 grounds),  cert.  denied,  Celpage,  Inc.  v.  FCC,  120  S.  Ct.  2212  (May  30,  2000),  cert.  denied,  AT&  T  Corp.  v. 
 Cincinnati  Bell  Tel.  Co.,  120  S.  Ct.  2237  (June  5,  2000),  cert.  dismissed,  GTE  Service  Corp.  v.  FCC,  121  S.  Ct.  423 
 (November  2,  2000). 
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 connections  and  services  as  well  as  any  necessary  hardware,  software,  and  to  undertake  the 
 necessary  staff  training  required  in  time  to  use  the  services  effectively  ...."  10 


 4.  In  1998,  UTA  filed  an  FCC  Form  471  seeking  funding  of  various 
 telecommunications  and  advanced  services  for  Funding  Year  1.  11  SLD  denied  the  application  in 
 its  entirety,  however,  finding  that  UTA  had  failed  to  show  that  it  had  the  resources  necessary  to 
 make  effective  use  of  the  services  for  which  it  sought  discounts.  12  UTA  then  filed  a  Letter  of 
 Appeal  with  SLD,  limiting  its  appeal  to  the  requests  for  funding  of  its  existing 
 telecommunications  services,  a  new  PBX  system,  and  two  computer  networks.  13  SLD  denied 
 that  appeal  as  well.  14  It  stated  that  the  necessary  resources  review  looked  only  to  whether  UTA 
 had  the  resources  necessary  for  all  of  its  requests;  SLD  did  not  perform  a  separate  resource 
 analysis  for  each  funding  request.  15 


 5.  UTA  then  filed  a  Request  for  Review  with  the  Commission,  asserting  that  SLD 
 should  have  performed  a  separate  necessary  resources  analysis  for  the  funding  requests  seeking 
 basic  voice  telephone  service.  16  By  decision  released  January  7,  2000,  the  Commission 
 concluded  that  it  is  generally  appropriate  for  SLD  to  analyze  whether  an  applicant  has 
 demonstrated  that  it  has  the  necessary  resources  to  support  its  application  by  looking  at  the 
 application  as  a  whole  with  all  FRNs  because  it  would  be  administratively  burdensome  for  SLD 
 to  determine  which  resources  should  be  assigned  to  which  request.  17  However,  the  Commission 
 indicated  that  SLD  should  apply  one  exception  to  this  rule.  18  Where  an  applicant  has  requested 


 10  Universal  Service  Order,  Order,  12  FCC  Rcd  8776,  9079,  para.  577;  see  also  47  C.  F.  R.    54.  504(  b)(  1)  (requiring 
 applicants  to  provide  information  about  equipment,  services,  training  and  other  facilities  in  place  to  make  use  of  the 
 services  requested)  and  47  C.  F.  R.    54.  504(  b)(  2)  (requiring  that  each  applicant's  FCC  Form  470  certify  that  "all  of 
 the  necessary  funding  in  the  current  funding  year  has  been  budgeted  and  approved  to  pay  for  the  'non-  discount' 
 portion  of  requested  connections  and  services  as  well  as  any  necessary  hardware  or  software,  and  to  undertake  the 
 necessary  staff  training  required  to  use  the  services  effectively  ...").  These  requirements  are  referred  to  collectively 
 hereinafter  as  the  "necessary  resources  certifications." 


 11  FCC  Form  471,  United  Talmudical  Academy,  filed  April  13,  1998  (Year  1  Form  471). 


 12  Letter  from  Schools  and  Libraries  Division,  Universal  Service  Administrative  Company,  to  Mozes  Greenfeld, 
 United  Talmudical  Academy,  dated  February  26,  1998  [sic]  (actual  date  February  26,  1999)  (Funding  Commitment 
 Decision  Letter). 


 13  Letter  from  Mozes  Greenfeld,  United  Talmudical  Academy,  to  Schools  and  Libraries  Division,  Universal  Service 
 Administrative  Company,  filed  March  29,  1999  (Appeal  to  SLD). 
 14  Letter  from  Schools  and  Libraries  Division,  Universal  Service  Administrative  Company,  to  United  Talmudical 
 Academy,  dated  July  14,  1999  (Administrators  Decision  on  Appeal). 
 15  Id.  at  1. 


 16  Letter  from  Mozes  Greenfeld,  United  Talmudical  Academy,  to  Federal  Communications  Commission,  filed 
 August  12,  1999  (First  Request  for  Review). 
 17  Request  for  Review  by  United  Talmudical  Academy,  Federal-  State  Board  on  Universal  Service,  Changes  to  the 
 Board  of  Directors  of  the  National  Exchange  Carrier  Association,  Inc.,  File  No.  SLD-  105791,  CC  Dockets  No.  96- 
 45  and  97-  21,  15  FCC  Rcd  423,  paras.  15-  16  (2000)  (United  Talmudical  Academy  Order). 


 18  Id.  at  paras.  15,  18. 
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 basic  voice  telephone  service  on  a  stand-  alone  basis  and  not  bundled  with  other  products  or 
 services  in  a  funding  request,  the  Commission  directed  SLD  to  engage  in  a  separate  necessary 
 resources  review.  19  The  Commission  remanded  UTAs  application  to  SLD  for  further 
 determinations  of  the  merits  of  any  [Funding  Request  Numbers]  seeking  discounts  solely  for 
 basic  voice  telephone  service.  20  The  Commission  further  specifically  instructed:  [  i]  f  SLD 
 finds  that  UTA  submitted  individual  FRNs  seeking  discounts  solely  for  basic  voice  telephone 
 service,  that  such  requests  individually  pass  SLDs  review  for  necessary  resources,  and  that  such 
 requests  are  otherwise  in  compliance  with  our  rules  and  orders  governing  the  schools  and 
 libraries  support  mechanism,  we  direct  SLD  to  fund  those  requests.  21 


 6.  On  remand,  SLD  granted  only  three  of  UTAs  eight  telecommunications 
 requests.  22  SLD  did  not  specify  in  the  Second  Funding  Commitment  Decision  Letter  why  the 
 other  five  requests  were  not  funded.  23  SLD  subsequently  informed  UTA  that  these  requests 
 sought  cellular  phone  service  and  Centrex  service,  which  SLD  found  did  not  constitute  basic 
 telephone  service.  24  UTA  then  filed  the  pending  Request  for  Review. 


 7.  In  its  Request  for  Review,  UTA  asserts  that  SLD  erred  by  applying  its  own 
 internal  definition  of  basic  telephone  service  instead  of  a  broader,  more  general  definition 
 which  SLD  asserts  was  intended  by  the  United  Talmudical  Academy  Order.  25  UTA  asserts  that 
 in  the  United  Talmudical  Academy  Order,  the  Commission  clearly  indicated  its  approval  of 
 UTAs  entire  basic  voice  telephone  service  application.  26  In  UTAs  understanding,  the  term 
 basic  voice  telephone  service  was  intended  to  apply  to  all  of  UTAs  requests  that  were  part  of 
 the  telephone  service  package  it  obtained  from  the  local  telephone  company,  including  the 
 provision  of  Centrex  and  cellular  service.  27  As  relief,  UTA  asks  that  its  requests  be  granted  in 
 their  entirety.  28  In  addition,  UTA  asks  that  the  Commission  delay  deciding  the  Request  for 
 Review  and  grant  UTA  an  opportunity  to  file  a  supplement  to  the  Request  for  Review  after  it  has 
 obtained  all  the  records  of  SLD  that  pertain  to  UTAs  application.  29 


 19  Id.  at  para.  19. 
 20  Id. 
 21  Id. 
 22  Letter  from  Schools  and  Libraries  Division,  Universal  Service  Administrative  Company,  to  Mozes  Greenfeld, 
 United  Talmudical  Academy,  dated  August  21,  2000  (Second  Funding  Commitment  Decision  Letter). 
 23  Id.  at  3. 


 24  See  Request  for  Review  at  1-  2. 
 25  Request  for  Review  at  1-  2. 
 26  Id.  at  2. 
 27  Id.  at  2. 
 28  Id.  at  3. 
 29  Id.  at  2. 
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 8.  We  first  address  UTAs  request  for  an  extension  of  the  time  to  appeal  so  that  it 
 may  file  a  supplemental  Request  for  Review  after  the  Administrator  has  responded  to  UTAs 
 request  for  the  complete  application  file.  Our  review  of  SLDs  decision  is  based  solely  on  the 
 record  that  is  currently  before  us,  consisting  of  the  application  materials  and  decisional 
 documents.  All  of  these  materials  are  already  in  UTAs  possession.  Accordingly,  we  deny 
 UTAs  request  for  an  extension  of  time  and  opportunity  to  file  a  supplemental  pleading,  and 
 proceed  to  address  the  merits  of  the  pending  Request  for  Review. 


 9.  After  reviewing  the  complete  record  and  governing  precedent,  we  reject  UTAs 
 assertion  that  in  the  United  Talmudical  Academy  Order,  the  Commission  indicated  its  approval 
 of  UTAs  entire  telephone  service  application.  Rather,  as  noted  above,  the  Commission 
 specifically  directed  that  SLD  should  award  funding  only  if  it  found  several  conditions 
 satisfied.  30  For  purposes  of  this  appeal,  one  condition  is  critical:  SLD  was  directed  by  the 
 Commission  to  award  funding  only  [  i]  f  SLD  finds  that  UTA  submitted  individual  FRNs 
 seeking  discounts  solely  for  basic  voice  telephone  service  .  .  .  .  31  The  Commission  did  not 
 determine  whether  UTA  had  in  fact  made  such  requests,  let  alone  which  specific  requests 
 consisted  of  basic  voice  telephone  service.  Instead,  the  Commission  left  the  assessments  of 
 whether  UTAs  individual  FRNs  sought  discounts  for  basic  voice  telephone  service  to  SLD  to 
 determine,  consistent  with  governing  rules  and  program  policies.  Thus,  SLD  was  directed  to 
 make  this  determination  on  remand. 


 10.  The  issue  before  us  is  whether  SLD  should  have  concluded  that  cellular  service 
 and  Centrex  service  constitute  basic  voice  telephone  service  and,  therefore,  that  FRNs  seeking 
 funding  for  such  services  should  be  reviewed  for  necessary  resources  separate  from  the  rest  of 
 the  applicants  FRNs.  We  note  initially  that  SLD  has  altered  its  position  in  part  since  its  August 
 21,  2000  decision  on  UTAs  application.  Currently,  it  defines  basic  phone  service  as  [  t]  he 
 basic  telephone  service  provided  by  the  telephone  company  .  .  .  includ[  ing]  Plain  Old  Telephone 
 Service  [POTS],  Cellular/  Personal  Communications  Service  and  long  distance  telephone 
 service.  32  Thus,  SLD  now  considers  cellular  phone  service  to  be  basic  voice  telephone 
 service,  but  still  finds  that  Centrex  is  not  basic  voice  telephone  service. 


 11.  In  analyzing  whether  cellular  service  and  Centrex  service  should  be  considered 
 basic  voice  telephone  service,  we  note  that  the  importance  of  this  conclusion,  as  stated  in  the 
 United  Talmudical  Academy  Order,  is  that  requests  for  such  service  are  entitled  to  a  separate 
 necessary  resources  review  because  the  necessary  resources  of  such  requests,  e.  g.,  telephones, 
 are  readily  ascertainable.  33  In  addition,  applicants  seeking  only  basic  voice  telephone  service 
 need  not  have  an  approved  Technology  Plan.  34 


 30  United  Talmudical  Academy  Order,  para.  19. 
 31  Id.  (emphasis  added). 
 32  See  SLD  Web  Site,  <http://  www.  sl.  universalservice.  org/  data/  pdf/  EligibleServicesList_  12_  29_  00.pdf>. 
 33  Id.  at  para.  18. 
 34  Id. 
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 12.  Taking  into  account  these  considerations,  we  find  that  cellular  service  should  be 
 considered  basic  voice  telephone  service  for  the  purposes  of  the  schools  and  libraries  universal 
 service  support  mechanism.  Resources  necessary  for  cellular  phone  service  are  as  readily 
 ascertainable  as  those  for  wireline  POTS.  Therefore,  we  reverse  SLDs  determination  that 
 cellular  phone  service  should  not  be  considered  basic  voice  telephone  service  under  the  schools 
 and  libraries  program. 


 13.  However,  we  agree  with  SLD  that  Centrex  is  not  basic  voice  telephone  service 
 for  the  purposes  of  the  schools  and  libraries  universal  service  support  mechanism.  "Centrex"  is 
 the  generic  name  for  central  office-  based  private  branch  exchange  (PBX)-  type  services  that  relies 
 in  part  on  customer  premise  equipment  to  provide  an  end  user  with  a  broad  variety  of  features 
 and  functions  that  a  customer  premises-  based  PBX  would  provide,  e.  g.,  intercom,  access  line 
 pooling,  call  transfer,  call  restrictions,  call  forwarding,  directed  call  pickup,  and  conference 
 calling.  35  It  may  also  include  additional  enhanced  functions  such  as  Customer  Dialed  Account 
 Recording,  which  allows  Centrex  customers  to  use  the  telephone  companys  electronic  switches 
 for  the  storage  and  retrieval  of  customer  business  information  that  is  not  used  in  the  provision  or 
 management  of  the  customers  telephone  service.  36 


 14.  As  discussed  above,  we  determine  whether  this  service  constitutes  basic  voice 
 telephone  service  by  considering  whether  the  resources  necessary  to  make  effective  use  of  the 
 service  are  sufficiently  analogous  to  those  necessary  to  use  POTS.  Necessary  resource 
 categories  include  computers,  training,  software,  maintenance,  and  electrical  connections.  37 
 Given  that  Centrex  service  is  central  office-  based,  the  hardware  and  software  resources 
 necessary  for  Centrex  will  likely  be  analogous  to  those  needed  for  POTS.  However,  in  respect  to 
 the  resources  needed  for  training,  the  two  services  are  not  analogous.  While  we  can  safely 
 assume  that  use  of  ordinary  telephone  service  requires  little  or  no  training,  we  cannot  assume  that 
 users  will  be  able  to  make  effective  use  of  the  numerous  features  provided  by  Centrex  without 
 training,  particularly  where  those  features  involve  advanced  functions  such  as  the  Customer 
 Dialed  Account  Recording  function  discussed  above.  We  therefore  find  that  FRNs  seeking 
 Centrex  should  not  be  considered  requests  for  basic  voice  telephone  service  and  should  be 
 analyzed  for  necessary  resources  together  with  the  rest  of  the  applicants  FRNs.  In  this  case, 
 because  UTA  failed  its  overall  necessary  resources  review,  we  find  that  SLD  correctly  denied  the 
 FRNs  seeking  Centrex  service. 


 35  See  Public  Utility  Commission  of  Texas  the  Competition  Policy  Institute,  Intelcom  Group,  (USA),  Inc.  and  ICG 
 Telecom  Group,  Inc.,  AT&  T  Corp.,  MCI  Telecommunications  Corporation,  and  Mfs  Communications  Company, 
 Inc.  Teleport  Communications  Group,  Inc.  City  Of  Abilene,  Texas,  13  FCC  Rcd.  3460,  n.  492  (1997),  petition  for 
 review  denied,  City  of  Abilene,  Tex.  v.  F.  C.  C.,  164  F.  3d  49  (D.  C.  Cir.  1999);  see  also,  e.  g., 
 <http://  www.  bellatlantic.  com/  largebiz/  cent_  standard.  htm>  (describing  features  of  providers  Centrex  service, 
 promising  the  latest  features  and  functionality  and  .  .  .  the  newest  system  innovations  as  they  become  available.). 


 36  North  American  Telecommunications  Association  Petition  for  Declaratory  Ruling  Under  Section  64.  702  of  the 
 Commission's  Rules  Regarding  the  Integration  of  Centrex,  Enhanced  Services,  and  Customer  Premises  Equipment, 
 3  FCC  Rcd  4385,  para.  1  (1988). 


 37  See,  supra,  n.  8. 
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 15.  In  sum,  we  affirm  SLDs  conclusion  that  Centrex  is  not  basic  voice  telephone 
 service  for  purposes  of  the  schools  and  libraries  universal  service  support  mechanism,  but  find 
 that  cellular  phone  service  is  encompassed  by  that  term.  38  We  remand  this  application  to  SLD  to 
 reconsider  whether  the  affected  funding  requests  for  cellular  phone  service  should  be  granted. 
 Aside  from  finding  that  cellular  phone  service  requests  are  requests  for  basic  voice  telephone 
 service,  entitled  to  a  separate  necessary  resources  review,  we  offer  no  opinion  as  to  whether  the 
 particular  cellular  requests  at  issue  here  are  entitled  to  funding. 


 16.  ACCORDINGLY,  IT  IS  ORDERED,  pursuant  to  authority  delegated  under 
 sections  0.91,  0.291,  and  54.722(  a)  of  the  Commissions  rules,  47  C.  F.  R.    0.91,  0.  291,  and 
 54.722(  a),  that  the  Request  for  Review  filed  by  United  Talmudical  Academy  is  GRANTED  in 
 part  and  DENIED  in  part,  and  this  application  is  REMANDED  to  SLD  for  further  action 
 consistent  with  this  Order. 


 FEDERAL  COMMUNICATIONS  COMMISSION 
 Carol  E.  Mattey  Deputy  Chief,  Common  Carrier  Bureau 


 38  Such  a  finding  under  the  schools  and  libraries  support  mechanism  has  no  precedential  significance  in  other 
 proceedings  or  contexts  before  the  Commission. 
7