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                                                           Before the
               Federal Communications Commission
                     Washington, DC  20554
In the Matter of                   )
                                   )
Request for Review of the          )
Decision of the                    )
Universal Service Administrator by )
                                   )
New Albany-Floyd County            )    File No. SLD-27572
Consolidated School Corporation    )
New Albany, Indiana                )
                                   )
Federal-State Joint Board on Universal Service    )    CC Docket No.  96-45
                                   )
Changes to the Board of Directors of the     )    CC Docket No. 97-21
National Exchange Carrier Association, Inc.  )
                    order ON ReCONSIDERATION
Adopted:  January 30, 2001              Released:  January 31, 2001
By the Common Carrier Bureau:
1.     In this Order, we grant the petition for reconsideration filed by the New Albany-Floyd
County Consolidated School Corporation (NAFC) on November 1, 1999 regarding our decision
to dismiss, as untimely, the appeal NAFC filed on April 26, 1999.  Furthermore, after reviewing
NAFC's appeal of the March 24, 1999 decision issued by the Schools and Libraries Division
(SLD) of the Universal Service Administrative Company (Administrator), we conclude that
NAFC's application should be remanded to SLD in order for SLD to redetermine whether SLD's
decision to reclassify NAFC's facilities as internal connections was appropriate in light of the
Commission's Tennessee Order.
I.   Background
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.  During the first
funding year (January 1, 1998 - June 30, 1999) of the support mechanism, SLD granted all
approved requests for discounts for telecommunications services and Internet access and granted
all approved requests for internal connections for schools eligible for discounts of at least 70
percent.
3.     By letter dated February 18, 1999, SLD denied NAFC's application for discount
funding, on the grounds that requests for internal connections were not funded for schools and
libraries at NAFC's discount level.  NAFC appealed SLD's decision, stating that its application
sought discounts for telecommunications services rather than internal connections.  On March
24, 1999, SLD denied NAFC's appeal.  SLD again stated that NAFC's request was for what
SLD considered internal connections.  SLD reclassified NAFC's entire request as internal
connections services so as to avoid the possibility of treating priority two services (internal
connections) as priority one services (telecommunications services and Internet access).  Further,
SLD denied NAFC's funding request for the reclassified internal connections services because it
did not qualify for the threshold 70 percent discount.
4.     On April 26, 1999, NAFC filed an appeal with the Commission.  Because the
Administrator's Decision on Appeal had been issued on March 24, 1999, more than 30 days prior
to NAFC's filing of its appeal with the Commission, the Common Carrier Bureau dismissed
NAFC's appeal as untimely on October 25, 1999.  That decision, however, failed to recognize
that the Commission was closed on April 23, 1999, the day that would otherwise have been the
last day to file an appeal, due to activities associated with the 50th Anniversary NATO Summit.
In a Public Notice announcing that it would be closed, the Commission stated that all filings due
on April 23, 1999 would be considered timely if filed on the next official work day, i.e., Monday,
April 26, 1999.
II.       Discussion
     A.   Timeliness of NAFC's Appeal
5.     Under these circumstances, NAFC's appeal, filed on April 26, 1999, was timely and
must be considered on its merits.  We therefore vacate our Order dismissing that appeal and
consider it on the merits here.
     A.   Merits of NAFC's Appeal
1.     In its appeal, NAFC argues that SLD incorrectly classified its requests for Ameritech-
managed router services and Internet server facilities as internal connections equipment rather
than as Internet access or telecommunications services, as NAFC had characterized it.  NAFC
further argues that, even if SLD was correct in reclassifying some of those facilities as internal
connections, SLD erroneously denied NAFC support for that portion of its application that
clearly was for telecommunications services and Internet access.
2.     Subsequent to SLD's March 24, 1999 decision on appeal, the Commission issued its
Tennessee Order, in which it considered whether certain facilities on school premises could be
properly considered Internet access, rather than internal connections.  We believe that under the
Tennessee Order, NAFC's argument concerning the classification of Ameritech's managed
router services and data service unit/channel service unit (DSU/CSU) as internal connections
may have merit.  Therefore, we direct SLD to review NAFC's application again and apply the
test described in the Tennessee Order to determine whether the services NAFC characterized as
telecommunications services or Internet access were properly characterized as such.
3.     Furthermore, even if SLD finds that some of the services sought by NAFC are for
internal connections and thus not eligible for support, we find that SLD should not penalize
NAFC for commingling its requests for discounts for priority one services and priority two
services.  Although the Commission's Fifth Reconsideration Order requires SLD to treat
requests for internal connections differently from those for telecommunications services and
Internet access, that Order was not released until June 22, 1998, while NAFC filed its FCC
Form 471 on April 8, 1998.
4.     In Williamsburg-James City, the Commission held that, in cases where, as here, an
FCC Form 471 was submitted before the establishment of the Commission's rules of priority,
applicants could not have been aware of the need to segregate carefully their service requests.
Consequently, the Commission held that, in appeals addressing such circumstances, applications
should be remanded to SLD for reprocessing, with priority one services (telecommunications and
Internet access) and priority two services (internal connections) being considered separately on
their own merits.  We, therefore, remand NAFC's application to SLD, and direct SLD to
reconsider NAFC's FCC Form 471 and, if warranted, to issue a new funding commitment
decision letter providing discounts for all appropriate priority one services requested by NAFC.
5.     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 Petition for Reconsideration filed by New Albany-Floyd County Consolidated School
Corporation on November 1, 1999 to reconsider the dismissal of the Appeal it filed on April 26,
2000 is GRANTED.
6.     IT IS FURTHERED ORDERED that the Appeal filed by New Albany-Floyd County
Consolidated School Corporation on April 26, 1999, is GRANTED to the extent discussed
herein.
7.     IT IS FURTHERED ORDERED that the Administrator IS DIRECTED to implement
the decision herein.
                              FEDERAL COMMUNICATIONS COMMISSION
                              Carol E. Mattey
                              Deputy Chief, Common Carrier Bureau