Goto Section: 54.506 | 54.508 | Table of Contents
Revised as of December 4, 2012
Goto Year:2011 |
§ 54.507 Cap.
(a) Amount of the annual cap. In funding year 2010 and subsequent
funding years, the $2.25 billion funding cap on federal universal
service support for schools and libraries shall be automatically
increased annually to take into account increases in the rate of
inflation as calculated in paragraph (a)(1) of this section.
(1) Increase calculation. To measure increases in the rate of inflation
for the purposes of this paragraph (a), the Commission shall use the
Gross Domestic Product Chain-type Price Index (GDP-CPI). To compute the
annual increase as required by this paragraph (a), the percentage
increase in the GDP-CPI from the previous year will be used. For
instance, the annual increase in the GDP-CPI from 2008 to 2009 would be
used for the 2010 funding year. The increase shall be rounded to the
nearest 0.1 percent by rounding 0.05 percent and above to the next
higher 0.1 percent and otherwise rounding to the next lower 0.1
percent. This percentage increase shall be added to the amount of the
annual funding cap from the previous funding year. If the yearly
average GDP-CPI decreases or stays the same, the annual funding cap
shall remain the same as the previous year.
(2) Public notice. When the calculation of the yearly average GDP-CPI
is determined, the Wireline Competition Bureau shall publish a public
notice in the Federal Register within 60 days announcing any
increase of the annual funding cap based on the rate of inflation.
(3) Amount of unused funds. All funds collected that are unused shall
be carried forward into subsequent funding years for use in the schools
and libraries support mechanism in accordance with the public interest
and notwithstanding the annual cap.
(i) The Administrator shall report to the Commission, on a quarterly
basis, funding that is unused from prior years of the schools and
libraries support mechanism.
(ii) Application of unused funds. On an annual basis, in the second
quarter of each calendar year, all funds that are collected and that
are unused from prior years shall be available for use in the next full
funding year of the schools and libraries mechanism in accordance with
the public interest and notwithstanding the annual cap as described in
this paragraph (a).
(b) A funding year for purposes of the schools and libraries cap shall
be the period July 1 through June 30.
(c) Requests . Funds shall be available to fund discounts for eligible
schools and libraries and consortia of such eligible entities on a
first-come-first-served basis, with requests accepted beginning on the
first of July prior to each funding year. The Administrator shall
maintain on the Administrator's website a running tally of the funds
already committed for the existing funding year. The Administrator
shall implement an initial filing period that treats all schools and
libraries filing within that period as if their applications were
simultaneously received. The initial filing period shall begin on the
date that the Administrator begins to receive applications for support,
and shall conclude on a date to be determined by the Administrator. The
Administrator may implement such additional filing periods as it deems
(d) Annual filing requirement. Schools and libraries, and consortia of
such eligible entities shall file new funding requests for each funding
year no sooner than the July 1 prior to the start of that funding year.
Schools, libraries, and eligible consortia must use recurring services
for which discounts have been committed by the Administrator within the
funding year for which the discounts were sought. The deadline for
implementation of non-recurring services will be September 30 following
the close of the funding year. An applicant may request and receive
from the Administrator an extension of the implementation deadline for
non-recurring services if it satisfies one of the following criteria:
(1) The applicant's funding commitment decision letter is issued by the
Administrator on or after March 1 of the funding year for which
discounts are authorized;
(2) The applicant receives a service provider change authorization or
service substitution authorization from the Administrator on or after
March 1 of the funding year for which discounts are authorized;
(3) The applicant's service provider is unable to complete
implementation for reasons beyond the service provider's control; or
(4) The applicant's service provider is unwilling to complete
installation because funding disbursements are delayed while the
Administrator investigates their application for program compliance.
(e) Long term contracts . If schools and libraries enter into long term
contracts for eligible services, the Administrator shall only commit
funds to cover the pro rata portion of such a long term contract
scheduled to be delivered during the funding year for which universal
service support is sought.
(f) Date services must be supplied . The Administrator shall not
approve funding for services received by a school or library before
January 1, 1998.
(g) Rules of priority. The Administrator shall act in accordance with
paragraph (g)(1) of this section with respect to applicants that file
an FCC Form 471, as described in § 54.504(a), when a filing period
described in paragraph (c) of this section is in effect. The
Administrator shall act in accordance with paragraph (g)(2) of this
section with respect to applicants that file an FCC Form 471, as
described in § 54.504(a), at all times other than within a filing
period described in paragraph (c) of this section.
(1) When the filing period described in paragraph (c) of this section
closes, the Administrator shall calculate the total demand for support
submitted by applicants during the filing period. If total demand
exceeds the total support available for that funding year, the
Administrator shall take the following steps:
(i) The Administrator shall first calculate the demand for services
listed under the telecommunications services, telecommunications, and
Internet access categories on the eligible services list for all
discount levels, as determined by the schools and libraries discount
matrix in § 54.505(c). These services shall receive first priority for
the available funding.
(ii) The Administrator shall then calculate the amount of available
funding remaining after providing support for the telecommunications
and Internet access categories for all discount levels. The
Administrator shall allocate the remaining funds to the requests for
support for internal connections, beginning with the most economically
disadvantaged schools and libraries, as determined by the schools and
libraries discount matrix in § 54.505(c) of this part. Schools and
libraries eligible for a 90 percent discount shall receive first
priority for the remaining funds, and those funds will be applied to
their requests for internal connections.
(iii) To the extent that funds remain after the allocation described in
§ § 54.507(g)(1)(i) and (ii), the Administrator shall next allocate
funds toward the requests for internal connections submitted by schools
and libraries eligible for an 80 percent discount, then for a 70
percent discount, and shall continue committing funds for internal
connections in the same manner to the applicants at each descending
discount level until there are no funds remaining.
Note to paragraph ( g )(1)( iii ): To the extent that there are single
discount percentage levels associated with “shared services” under
§ 54.505(b)(4), the Administrator shall allocate funds for internal
connections beginning at the ninety percent discount level, then for
the eighty-nine percent discount, then for the eighty-eight percent
discount, and shall continue committing funds for internal connections
in the same manner to the applicants at each descending discount level
until there are no funds remaining.
(iv) If the remaining funds are not sufficient to support all of the
funding requests within a particular discount level, Schools and
Libraries Corporation shall divide the total amount of remaining
support available by the amount of support requested within the
particular discount level to produce a pro-rata factor. Schools and
Libraries Corporation shall reduce the support level for each applicant
within the particular discount level, by multiplying each applicant's
requested amount of support by the pro-rata factor.
(v) Schools and Libraries Corporation shall commit funds to all
applicants consistent with the calculations described herein.
(2) Rules of priority . When expenditures in any funding year reach the
level where only $250 million remains before the cap will be reached,
funds shall be distributed in accordance to the following rules of
(i) The Administrator or the Administrator's subcontractor shall post a
message on the Administrator's website, notify the Commission, and take
reasonable steps to notify the educational and library communities that
commitments for the remaining $250 million of support will only be made
to the most economically disadvantaged schools and libraries (those in
the two most disadvantaged categories) for the next 30 days or the
remainder of the funding year, whichever is shorter.
(ii) The most economically disadvantaged schools and libraries (those
in the two most disadvantaged categories) that have not received
discounts from the universal service support mechanism in the previous
or current funding years shall have exclusive rights to secure
commitments for universal service support under this subpart for a
30-day period or the remainder of the funding year, whichever is
shorter. If such schools and libraries have received universal service
support only for basic telephone service in the previous or current
funding years, they shall remain eligible for the highest priority once
spending commitments leave only $250 million remaining before the
funding cap is reached.
(iii) Other economically disadvantaged schools and libraries (those in
the two most disadvantaged categories) that have received discounts
from the universal service support mechanism in the previous or current
funding years shall have the next highest priority, if additional funds
are available at the end of the 30-day period or the funding year,
whichever is shorter.
(iv) After all requests submitted by schools and libraries described in
paragraphs (g)(2) and (g)(3) of this section during the 30-day period
have been met, the Administrator shall allocate the remaining available
funds to all other eligible schools and libraries in the order in which
their requests have been received by the Administrator, until the $250
million is exhausted or the funding year ends.
[ 62 FR 32948 , June 17, 1997]
Editorial Note: For Federal Register citations affecting § 54.507,
see the List of CFR Sections Affected, which appears in the Finding
Aids section of the printed volume and at www.fdsys.gov .
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Goto Section: 54.506 | 54.508
Goto Year: 2011 |
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