Last December, the FCC adopted an Order updating its E-Rate program by increasing available funding improving the effectiveness of the program.  The Order increases the E-Rate budget to $3.9 billion annually each year through 2019.  The application window is open through February 26, 2015.

Background.  E-Rate makes telecommunications and information services more affordable to schools and libraries by allowing them to receive 20-90% discounts on eligible services.  The program creates an opportunity for Internet service providers to bid on and offer services at their regular rates to schools or libraries that may otherwise lack connectivity. 

A school or library that wishes to participate files an FCC Form 470 to open the competitive bidding period for vendors.  The Universal Service Administration Company (“USAC”) then posts the requests on its website for vendors to review.  Vendors submit bids to the schools or libraries, which choose vendors, subject to final approval from USAC. 

The service provider selected for a bid enters into a contract with the school or library.  The service provider receives full payment for the services, either by invoicing the school or library for part of the cost and USAC for the remainder, or by invoicing the school or library for the full cost, in which case USAC reimburses part of the cost directly to the school or library.

Updates to the Program.  The Order adjusts the program rules and increases the budget for E-Rate from $2.4 billion to $3.9 billion – the first reset of the cap since it was initially set in 1997.  The main goal of the Order is maximizing options for schools, libraries, and vendors by:

• Streamlining the construction funding process;
• Equalizing support for dark fiber and lit fiber;
• Permitting schools and libraries to propose self-construction of a high-speed broadband network where it is cost effective;
• Adding incentives for states to offer discounts and match construction funds; and
• Providing more support for the provision of internal connections, managed internal broadband services, and basic maintenance of internal connections.

Participating in E-Rate.  Providers of data or phone service are encouraged to search the USAC database of filed Forms 470 in their service areas and to bid on providing services.  Because Forms 470 are uploaded on a rolling basis throughout the application window, interested providers should check the database regularly.  Providers can also proactively approach schools and libraries in their service areas to educate them on the E-Rate program, though the school or library must file the Form 470 on its own.

The database is searchable under various criteria and is located here.  Schools and libraries must make their Forms 470 available in the database for at least 28 days before they can agree to bids. 

Deadlines.  Thursday, February 26, 2015 is the last day for schools and libraries to post a Form 470 for the 2015 funding year.  Thursday, March 26, 2015 is the last day for a school or library to select a bid, enter into a contract with the service provider, and submit Form 471 with information on the chosen bid. 

The database of Forms 470 is open now for providers to search for schools and libraries seeking service in their areas.  Interested providers also still have time to approach schools and libraries in their service areas to encourage them to file a Form 470.  If you have any questions regarding the E-Rate Program, please contact Jake Baldwin at (312) 372-3930 or jbaldwin@cinnamonmueller.com.

Reminder: Special Access Data Collection Responses due February 27;

FCC Issues Subpoena Requiring Disclosure of Customer Information

As we reported in December, all companies that were required to file a Form 477 for 2013 must respond to the FCC’s one-time Special Access Data Collection.  For businesses with fewer than 1,500 employees (measured at the parent level) who are required to file data, the filing deadline is February 27, 2015.  The Commission recently took additional steps to address privacy concerns and, in the process, reaffirmed the obligation to respond.

Privacy of Information Submitted.  The data collection calls for detailed information about high-capacity dedicated services, including information about customers of those services.  In the process of complying with the data collection, some filers raised concerns about the privacy of the information submitted.  To address these concerns, the FCC’s Wireline Competition Bureau took two steps.

First, to help protect confidential and competitively sensitive data submitted in response to the collection, the Bureau adopted a Protective Order, restricting who may view information submitted in the data collection and under what conditions.

Second, the Bureau recently issued an administrative subpoena to address privacy concerns raised by some businesses and trade organizations.  In general, there are restrictions on how and to what extent companies may share customer information.  For instance, the Cable Act includes subscriber privacy provisions, the Telecommunications Act protects customer proprietary network information, and the Electronic Communications Privacy Act prohibits providers from disclosing certain basic customer records to a governmental entity unless demanded through a valid subpoena, court order, or warrant.  In this case, by issuing the subpoena, the Bureau states that it has removed “any uncertainty as to obligations of respondents to produce the customer information sought consistent with” these privacy laws.

In addition, the subpoena serves as a reminder of the importance of responding to the data collection.  Entities that do not respond may now face additional penalties for failing to respond to a valid administrative subpoena.

Additional information.  For additional information on the data collection, see our December 4, 2014 Client Update or the FCC’s website. 

If you have questions regarding the FCC’s Special Access Data Collection or need assistance with filing, please contact Bruce Beard at (314) 394-1535 or bbeard@cinnamonmueller.com or Maayan Lattin at (202) 872-6881 or mlattin@cinnamonmueller.com. 

FCC Issues Reminder of Upcoming Form 477 Deadline

            The next Form 477 is due March 2, 2015.  The FCC recently released a Public Notice reminding filers of the upcoming deadline. Telephone, broadband, and interconnected VoIP providers must report information about broadband connections and local telephone service as of December 31, 2014.

            Note:  Though the Public Notice lists March 1, 2015 as the filing deadline, March 1^st falls on a Sunday this year.  Accordingly, under FCC rules, Form 477 will be due the next business day – Monday, March 2, 2015. 

This is the second Form 477 filing requiring the use of the new filing interface on the FCC’s website.  Instructions for filers can be found here.  Filers can also review a brief summary of the Form 477 changes on the FCC’s website. 

If you have any questions about Form 477, please contact Scott Friedman at (312) 372-3930 or sfriedman@cinnamonmueller.com.