Federal Communications Commission DA 11-1246
Before the
Federal Communications Commission
Washington, DC 20554
In the Matter of
Request for Review of a
Decision of the
Universal Service Administrator by
Loving Municipal Schools
Loving, New Mexico
File No. SLD-4 16043
Schools and Libraries Universal Service
Support Mechanism
ORDER
CC Docket No. 02-6
Adopted: July 27, 2011 Released: July 27, 2011
By the Deputy Chief, Telecommunications Access Policy Division, Wireline Competition Bureau:
I. INTRODUCTION
1. In this order, we deny a request for review filed by Loving Municipal Schools (Loving)
seeking review of a decision by the Universal Service Administrative Company (USAC) denying its
funding requests for one of its schools under the E-rate program (more formally known as the schools
and libraries universal service program) for funding year 2004 on the ground that the requested discount
level was not supported by sufficient documentation.' For the reasons discussed below, we affirm
USAC's decision and deny Loving's request for review.
II. BACKGROUND
2. F-rate Program Rules and Procedures. Under the E-rate program, eligible schools,
libraries, and consortia that include eligible schools and libraries may apply for discounts for eligible
services.2 The level of discount, which ranges from 20 percent to 90 percent, is determined primarily by
the level of economic disadvantage, with some schools and libraries located in rural areas receiving an
additional discount of up to 10 percent.3 The level of poverty for schools and school districts is
measured by the percentage of student enrollment that is eligible for a free or reduced price lunch under
'See Letter from David Chavez, Dawn Biagianti, and John Ortiz, Loving Municipal Schools, to Office of the
Secretary, Federal Communications Commission, CC Docket No. 02-6 (filed July 11, 2005) (Request for Review).
Section 54.7 19(c) of the Commission's 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. § 54.7 19(c). Loving also filed an identical
appeal of the decision with USAC. See Letter from David Chavez, Dawn Biagianti, and John Ortiz, Loving
Municipal Schools, to USAC, Schools and Libraries Division (dated July 7, 2005) (Appeal to USAC).
2 See 47 C.F.R. § 54.50 1-54.503, 54.505(b)(3); Federal-State Joint Board on Universal Service, CC Docket No.
96-45, Report and Order, 12 FCC Rcd 8776, 9040-44, paras. 501-07 (1997) (1997 Universal Service Order)
(subsequent history omitted).
See 47 C.F.R. § 54.505.
Federal Communications Commission DA 11-1246
the National School Lunch Program (NSLP) or a federally approved alternative mechanism, such as a
survey.4 On the FCC Form 471 application, applicants are required to provide information that
establishes their appropriate discount rate.5 The Commission's rules require USAC to apply a school's
site-specific discount level for funding requests for services that are specific to a particular site.6 Where
the services are to be shared among eligible schools or libraries, the Commission's rules require USAC
to apply the shared discount percentage to funding requests for those shared services.7 The shared
discount percentage is the weighted average of the applicable discounts of all the schools or libraries
sharing a portion of the services, with the weighting based on the number of students in each school.8
3. The Commission's rules also provide that requests for telecommunications and Internet
access services shall receive first priority for available funds and that requests for internal connections
and basic maintenance of internal connections shall receive second priority.9 The rules further provide
that, when sufficient funds are not available to fund all requests for discounts for priority two services
(internal connections and basic maintenance of internal connections), USAC shall allocate funds for
discounts beginning with those applicants eligible for a 90 percent level and, to the extent funds remain,
continue to allocate funds for discounts to applicants at each descending single discount percentage, e.g.,
89 percent, 88 percent, and so on, until the available funds are exhausted.'°
4. Request for Review. In January 2004, Loving applied for discounted telecommunications
services and internal connections for three schools Loving Municipal High School, Loving Municipal
Middle School, and Loving Municipal Elementary School - for funding year 2004." On its FCC Form
471 application, Loving indicated that it was eligible for discounted services at the 85 percent discount
level.'2 Loving submitted documentation that supported a 90 percent discount rate for Loving Municipal
High School and Loving Municipal Middle School, and an 80 percent discount rate for Loving
Municipal Elementary School.'3 In May 2005, USAC issued a funding commitment decision letter
(FCDL) to Loving granting its funding requests for telecommunications services and internal
connections for the high school and middle school, but denying its funding requests (funding request
numbers (FRNs) 1143816 and 1144222) for internal connections for the elementary school.'4 In denying
47 C.F.R. § 54.505(b)(l).
Block 4 of the FCC Form 471 application asks the school to provide information regarding the school's status as
rural or urban, the number of students enrolled in the school, and the number of students eligible for the National
School Lunch Program (NSLP). See Schools and Libraries Universal Service, Service Ordered and Certification
Form, 0MB 3060-0806 (November 2004) (FCC Form 471).
6 See 47 C.F.R. § 54.505(b)(1).
' See 47 C.F.R. § 54.505(b)(4).
'Id
See 47 C.F.R. § 54.507(g)(l).
'°Id.
"See FCC Form 471, Loving Municipal Schools (filed Jan. 30, 2004) (Loving FCC Form 471).
'21d.
' See Letter from USAC, Schools and Libraries Division, to John Ortiz, Loving Municipal Schools at 1-2 (dated
Aug. 30, 2005) (Administrator's Decision on Appeal).
2
Federal Communications Commission DA 11-1246
its request for the elementary school, USAC applied the site-specific discount rate of 80 percent for the
funding requests rather than the shared discount rate of 85 percent.'5 Because priority two services in
funding year 2004 were not funded below the 81 percent discount level, USAC's reduction in its
discount rate amounted to a denial of funding for these requests.'6
5. On July 7, 2005, Loving appealed USAC's decision to USAC stating that FRNs 1143816
and 1144222 qualified for B-rate funding for internal connections at the shared 85 percent discount level,
instead of the 80 percent discount level applied by USAC.'7 On July 11, 2005, Loving also submitted an
identical appeal with the Commission of USAC's decision stating that USAC's determination was
incorrect and that USAC disregarded Loving Municipal Schools' 85 percent shared discount level.'8 In
August 2005, USAC denied Loving's appeal to USAC on the grounds that the funding requests were for
internal connections at the elementary school only; thus, the B-rate rules required USAC to apply the
site-specific discount to these funding requests.'9 In this order, we address Loving's appeal to the
Commission.
III. DISCUSSION
6. Based upon our review of the record, we affirm USAC's decision and deny Loving's
request for review. As indicated above, the Commission's rules require USAC to apply a school's site-
specific discount level for funding requests for services that are specific to a particular site.20 Where,
however, the services are to be shared among eligible schools or libraries, the Commission's rules
require USAC to apply the shared discount percentage to funding requests for those shared services.2' In
this instance, the documentation provided by Loving indicates that FRNs 1143816 and 1144222 were
only for internal connections at the elementary school and not to be shared with the high school and
middle school.22 Therefore, USAC correctly applied the site-specific discount of 80 percent to Loving
Elementary School's funding requests.23 Because funding for internal connections in funding year 2004
was not available to applicants that qualified for a discount rate below 81 percent, Loving was unable to
' See Letter from USAC, Schools and Libraries Division, to John Ortiz, Loving Municipal Schools (dated May 10,
2005) (Funding Commitment Decision Letter (FCDL)).
' See FCDL at 5; Administrator's Decision on Appeal at 1-2.
16 Funding for priority two services in funding year 2004 was capped at the 81 percent discount level. See USAC
website, Schools and Libraries Division, Schools and Libraries News Brief, http://www.usac.org/slltools/news-
archive/2005/04202005.asp#042905 (last visited July 26, 2011).
'7See Appeal to USAC.
18 See Request for Review at 1; supra 11.1.
' See Administrator's Decision on Appeal at 1-2.
20 See supra para. 2.
21 Id.
22 See Loving FCC Form 471. Loving also submitted the service provider's proposal which indicates that FRNs
1143816 and 1144222 were for internal connections at the Loving Elementary School. See Request for Review.
23 See Administrator's Decision on Appeal at 1.
Federal Communications Commission DA 11-1246
receive funding for internal connections for FRNs 1143816 and 1144222.24 Accordingly, we affirm
USAC's decision and deny Loving's request for review.
IV. ORDERING CLAUSES
7. 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. § 15 1-154 and 254, and 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
request for review filed by Loving Municipal Schools, Loving, New Mexico, IS DENIED.
FEDERAL COMMUNICATIONS COMMISSION
Gina Spade
Deputy Chief
Telecommunications Access Policy Division
Wireline Competition Bureau
24Seesupra n.16.
4