Responding to a
request for clarification in a letter
from the Schools, Health & Libraries Broadband Coalition (“SHLB”) the FCC
confirmed the rolling five-year nature of the current Category 2 budget
cycle. Five-year budget cycles were
first established as a two-year trial in the First E-rate Modernization Order (FCC
14-99). The FCC subsequently
extended the trial to five years in the Second E‑rate Modernization Order (FCC 14-189). The
implementing language in the First Order appeared to clearly indicate that an
applicant’s five-year budget would begin the first year an applicant was funded
and extend over the next four years. On
the other hand, the Orders indicated that the Category 2 budget trial would
expire after FY 2019. This suggested
that all “five-year” budgets, begun after FY 2015 might be truncated as of FY
2019. Recognizing that the FCC was
planning to address Category 2 budgets in a new order to take effect in FY
2020, USAC has studiously avoided requests to clarify the post-FY 2019 status
of budgets initiated in or after FY 2016.
The FCC’s response to
SHLB’s request for a definitive clarification, albeit verbally, confirms that a
five-year budget with an initial commitment in FY 2016 extends through FY
2020. More generally:
This is a welcome
clarification, but one that does not fully establish Category 2 funding rules
post-FY 2019. For that we must await a
new FCC order, hopefully issued before July 2019, perhaps preceded by an NPRM
(public comment period). What we do know
from an interim report (DA 19-71)
released last month (see our newsletter
of February 18th) is that the FCC staff is recommending a continuation
of the Category 2 budgeting process, possibly with “targeted changes.”
What we believe this
means for applicants with existing Category 2 budgets extending into
FY 2020 or beyond— including those with first commitments in FY 2019 — is
that new rules will leave them no worse off for the remainder of their existing
budget cycles. We would also hope that
any improvement to the Category 2 budget rules would, at least as an option,
accrue to all applicants.
Please let me know if you have questions specific to your school.
Happy Filing!
Todd Lawrence
tlawrence@sde.idaho.gov
