********************************************************    
                                         NOTICE
    ********************************************************
                                
                This document was converted from
           WordPerfect or Word to ASCII Text format.
                                
   Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
             will not show up in this text version.
                                
All text attributes such as bold, italic, underlining, etc. from the
    original document will not show up in this text version.
                                
        Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
           will not be preserved in the text version.
                                
        If you need the complete document, download the
  WordPerfect version or Adobe Acrobat version, if available.
                                
*****************************************************************
                                                           Before the
               Federal Communications Commission
                     Washington, DC  20554

In the Matter of                   )
                                   )
Request for Review of the          )
Decision of the                    )
Universal Service Administrator by )
                                   )
White Sulphur Springs School District   )    File No. SLD-82064
White Sulphur Springs, Montana     )
                                   )
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:  November 16, 1999             Released: November 16, 1999

By the Common Carrier Bureau:

1.     The Common Carrier Bureau has under consideration an appeal, filed on April 22,
1999, by the White Sulphur Springs School District of White Sulphur Springs, Montana (White
Sulphur Springs), seeking review of a decision issued by the Schools and Libraries Division
(SLD) of the Universal Service Administrative Company (Administrator).  White Sulphur Springs
seeks review of SLD's denial of its request for funding of internal connection services, which
included a particular type of router.  For the reasons set forth below, we grant White Sulphur
Springs' appeal to the extent provided herein, and remand White Sulphur Springs' funding
application to the SLD for further determination in accordance with this order.
2.     Under the schools and libraries universal service support mechanism, eligible schools,
libraries, and consortia that include eligible schools and libraries, may apply for discounts for
eligible telecommunications services, Internet access, and internal connections.
3.     By letter dated February 18, 1999, SLD denied White Sulphur Springs' request for a
discount on the cost of implementing certain internal connection services.  Specifically, SLD
denied funding for funding request number (FRN) 89418 of White Sulphur Springs' application
for discount funding.  In its February 18, 1999 letter, SLD explained that White Sulphur Springs'
funding request had been denied because it included a request for a discount on a Kentrox
Pacesetter T1 Access Router, which included integrated DSU/CSU and ISDN HS WAN and
was ineligible for discount funding.
4.     In a letter filed with SLD on March 18, 1999, White Sulphur Springs appealed SLD's
denial of this funding request.  White Sulphur Springs explained that the particular brand of
router at issue was required by its service provider for receiving 56k Internet access.  White
Sulphur Springs further explained that the router was capable of providing up to T1 speeds,
enabling White Sulphur Springs to avoid purchasing a new router each time it wanted to increase
bandwidth.  Citing SLD's Eligible Service List, White Sulphur Springs asserted that both routers
and CSU/DSU equipment are eligible for funding.  White Sulphur Springs further maintained that,
although the router is capable of being used in a WAN environment, White Sulphur Springs is not
making such use of the router.  White Sulphur Springs added that the router was advertised as
providing "cost effective Internet access for small LANs," the same purpose for which White
Sulphur Springs is using the router.  By letter dated March 26, 1999, SLD denied White Sulphur
Springs' appeal.  SLD determined that the router at issue was a remote access router and,
therefore, was ineligible for funding.
5.     In a letter filed with the Commission on April 22, 1999, White Sulphur Springs
appealed SLD's denial of its request for funding of FRN 89418.  In its appeal to the
Commission, White Sulphur Springs asserts that the router is being used neither for WAN
purposes generally nor specifically for remote access.  White Sulphur Springs further points out
that its contract with its service provider explicitly prohibits White Sulphur Springs from attaching
modems to the router in order to access the router's Internet connection remotely.  In its appeal
to the Commission, White Sulphur Springs further asserts that both routers and CSU/DSUs are
eligible for funding.  White Sulphur Springs requests that the Commission reverse SLD's
decisions denying White Sulphur Spring's request for discounts on internal connections in FRN
89418, and that the Commission direct SLD to approve this request.
6.     Under section 54.500 of the Commission's rules, a wide area network is defined as "a
voice or data network that provides connections from one or more computers within an eligible
school . . . to one or more computers or networks that are external to such eligible school." 
Section 54.518 of the Commission's rules states that "[t]o the extent that states [or] schools . . .
build or purchase a wide area network to provide telecommunications services, the cost of such
wide area networks shall not be eligible for universal service discounts."  
7.     As the Commission stated in its Tennessee decision, "we can, where appropriate, look
behind transactions underlying requests for discounts to ensure that they comply with [the
Commission's] rules."  Under the facts presented here, we conclude that the router in dispute
here is not part of an ineligible wide area network.  Although the router is capable of supporting
WAN connections, White Sulphur Springs is not using the router to connect to any facilities other
than to its Internet service provider in order to receive Internet access.  In addition, White
Sulphur Springs' contract with its service provider explicitly forbids White Sulphur Springs from
connecting modems to the router in order to access the router's Internet connection remotely. 
Given that the router at issue is marketed primarily to be used for what is an eligible service,
namely to provide Internet access for small LANs, and given that this use is the only use White
Sulphur Springs is making of the router, we conclude that the presence of additional, peripheral
WAN functionality in the router, which is not being used, does not render the router ineligible for
funding as a part of wide area network facilities.  As such, we conclude that White Sulphur
Springs is entitled to discounts for this service.
8.     To the extent necessary to effectuate the decision above, we grant a waiver of section
54.507(b)(2) of the Commission's rules.  This rule provides that schools and libraries may
receive discounts on nonrecurring services only through September 30, 1999.
9.     ACCORDINGLY, IT IS ORDERED, pursuant to authority delegated under sections
0.91, 0.291, and 54.722(a) of the Commission's rules, 47 C.F.R.  0.91, 0.291, and 54.722(a),
that the appeal filed by White Sulphur Springs School District on April 22, 1999, IS GRANTED
to the extent provided herein.  We direct the Administrator to review White Sulphur Springs'
funding application and to issue a revised Funding Commitment Decision Letter consistent with
the decision above.
10.    IT IS FURTHER ORDERED, pursuant to sections 0.91 and 0.291 of the
Commission's rules, 47 C.F.R.  0.91 and 0.291, that section 54.507(b)(2) of the Commission's
rules, 47 C.F.R.  54.507(b)(2), is WAIVED for a period of up to 180 days following the date of
the issuance of a Funding Commitment Letter by the Administrator pursuant to this order.
                              FEDERAL COMMUNICATIONS COMMISSION
                              
                              
                              
                              Yog R. Varma
                              Deputy Chief, Common Carrier Bureau