Followers of this blog know that appeals relating to Universal Service Fund contribution obligations proliferate.  Despite a rule stating that the FCC will address such appeals in 90 days, contribution appeals routinely linger for two years or more before a decision.  Moreover, the number of new appeals outpaces the number of USF decisions issued by

With the e-rate program pressing against its cap in funding, the FCC seems to be clamping down on its competitive bidding procedures.  For the fifth time this month, the FCC’s Wireline Competition Bureau denied a school’s e-rate appeal because it failed to comply with the competitive bidding procedures.

In this case, the applicant

Shortly after I posted an entry noting the FCC’s denial of e-rate appeals for competitive bidding violations, the Wireline Competition Bureau issued another decision along the same lines.  In this case, however, the focus was on the conduct of the service provider during the bidding process. 

This case involves a Missouri service provider, Synergetics

Earlier this month, the FCC’s Wireline Competition Bureau denied three appeals by school districts seeking funding under the Schools and Libraries Program of the Universal Service Fund.  In all three decisions, the Bureau found that the school had failed to follow the Commission’s competitive bidding rules for such requests, and therefore, the USAC had properly denied funding of the request.

The decisions highlight three elements of the competitive bidding rules:  (1) that the selection of vendors be based on the bid process itself, (2) that all information be disclosed to all potential bidders and (3) that price be the primary factor in selecting vendors. 

Collectively, the cases serve as a reminder to schools and service providers alike that the bid process must be fair and open in order to receive funding from the program.  Both school districts and service providers need to be vigilant to avoid inadvertent violations of the e-rate program’s competitive bidding rules.

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A broad coalition of telecommunications carriers is asking the FCC to initiate a rulemaking proceeding to determine the proper treatment of MPLS-based services for regulatory and Universal Service purposes.  The coalition, which includes Verizon, XO, Level 3, Qwest and four other carriers, are providers of services based on the Multi-Protocol Label Switching (MPLS) technology.  The carriers recently met with advisors to the FCC’s Wireline Competition Bureau and urged the FCC to clarify prospectively the proper treatment of services based on this technology.

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In a recent USF appeal, the FCC agreed with a prepaid card "platform provider" that each of its customers, not the platform provider, is the "carrier" for Universal Service purposes.  The FCC ruled, however, that the platform provider may owe USF on transport services it provided, unless it properly qualified the customers as resellers under the USF rules.  The case, Network Enhanced Telecom LLP, is discussed after the jump.

Prepaid card providers should take note.  This decision carries implications for all "carrier" responsibilities, including 214 authorizations, tariffing, CPNI obligations and responsibility for marketing claims, not just for USF contributions.

Wholesale carriers and resellers also should take note.  This represents the first time since Global Crossing that the FCC has addressed the obligations of wholesale carriers to qualify their resellers — a persistent point of contention in USF auditing and reporting. 

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