E-rate NPRM 4-0 FCC OK Seen -- Despite Criticism

A draft FCC NPRM on establishing a centralized online portal for E-rate's competitive bidding process and setting additional documentation requirements for applicants is likely to be approved during the agency’s meeting Tuesday, officials told us. That’s despite recent criticism from some E-rate advocates and questions about potential implementation challenges for the proposed portal (see 2111300047).

The eighth floor has had “lots” of advocacy on the item, said one FCC official. Officials are generally satisfied with the questions being asked in the draft and have been taking into consideration some comments already submitted, another official said. There may be additional questions included in the final item, the official said. The FCC is “evaluating the record that has come in since White Copy,” or a draft NPRM and fact sheet, emailed a spokesperson last week.

Groups filed ex parte letters raising concerns about how the proposed portal would co-exist with current state bidding processes. Some E-rate participants asked the FCC to abandon the item entirely. The Utah Education and Telehealth Network, which files E-rate applications for public schools in the state, said last week in docket 21-455 that it has "serious concerns" about the NPRM, asking the commission to drop it. The portal “would be in direct conflict with Utah state law and the University of Utah’s procurement policies, which UETN must follow,” it said.

"You've got to strike a balance between the burden of the application process … and that sort of marginal return of adding on some new requirements,” said Consortium for School Networking Counsel Reg Leichty. Smaller applicants are sometimes discouraged from applying if they don’t have the resources to navigate the process, Leichty said. He wants the FCC to consider asking how the competitive bidding process can be improved “without making the application process so burdensome that more people decide not to participate.”

The effort to revamp E-rate's competitive bidding process stems in part from a 2020 GAO report that found “opportunities to misrepresent compliance with competitive bidding requirements as an underlying fraud risk” in E-rate. More than $21 million in improper payments involved invalid contracts under the competitive bidding process in FY 2019, and more than $67 million was associated with incomplete documentation, says the draft NPRM. The FCC Office of Inspector General recommended the portal to “help prevent circumvention of the E-rate rules.”

Some E-rate applicants said the proposed portal may create additional challenges for applicants. California Department of Education’s K-12 High Speed Network and its program manager, the Imperial County Office of Education, said the OIG’s recommendation didn’t consider that the proposal would “create inefficiencies and serious scheduling delays that would create an undue burden on applicants” (see 2112070053).

There needs to be a “clear conversation” about what existing state and local procurement processes and requirements look like before the FCC decides what to do, Leichty said. There are “a number of data points” that still need to be understood, he said: “Let’s do a thorough analysis, and then let’s think through what improvements could be made to the system.”