Before the
               Federal Communications Commission
                     Washington, DC  20554

In the Matter of                   )
                                   )
Request for Review of the          )
Decision of the                    )
Universal Service Administrator by )
                                   )
Sparta Area School District        )    File No. SLD-44467
Sparta, Wisconsin                  )
                                   )
Federal-State Joint Board on       )    CC Docket No.  96-45
Universal Service                  )
                                   )
Changes to the Board of Directors of the     )    CC Docket No. 97-21
National Exchange Carrier Association, Inc.  )

                             order

Adopted:  October 29, 1999              Released: October 29, 1999

By the Common Carrier Bureau:

1.     The Common Carrier Bureau (Bureau) has under consideration an appeal filed by the
Sparta Area School District (Sparta) on June 3, 1999, seeking review of a decision issued by the
Schools and Libraries Division (SLD) of the Universal Service Administrative Company
(Administrator).  Sparta seeks review of the SLD's denial of its application for discounts under
the schools and libraries universal service support mechanism.  For the reasons set forth below,
we grant Sparta's appeal to the extent provided herein.
2.     Under the schools and libraries universal service support mechanism, eligible schools,
libraries, and consortia that include eligible schools and libraries, may apply for discounts for
eligible telecommunications services, Internet access, and internal connections.
3.     By letter dated January 26, 1999, the SLD denied Sparta's  request for discounts. 
Sparta appealed the SLD's decision by letter dated February 5, 1999.  On May 19, 1999, the SLD
affirmed its initial funding decision.  The Administrator's Decision on Appeal indicated that
services listed by Sparta as dedicated access/Internet access included some internal connection
services.  It further indicated that, where a particular funding request included some internal
connections, the entire funding request was recategorized by SLD as internal connection services
so as to "avoid the possibility of treating priority two services (Internal Connections) as priority
one services (Telecommunications, Dedicated and Internet Access services)."  Because internal
connections are funded only when a poverty/discount level of 70% or above has been shown,
these services could not be supported for this funding period.
4.     In Sparta's request for review of SLD's decision that is now before us, Sparta states
that insufficient staff resources and intricate program rules contributed to Sparta's failure to
properly classify services in its application for discounts for Internet access and internal
connections.  Sparta contends that its inclusion of certain equipment that was determined by the
Administrator to constitute internal connections in its request for discounts for Internet access
should not have resulted in SLD's denial of the total request for discounts for Internet access. 
Sparta requests that SLD approve its funding request for Internet access less the cost of this
equipment.
5.     In Williamsburg-James City Schools, the Commission determined that, in cases
where, as here, an FCC Form 471 was submitted before the establishment of the Commission's
rules of priority in the Fifth Order on Reconsideration, appplicants could not have been aware of
the need to segregate carefully their service requests.  Consequently, the Commission held that, in
appeals addressing such circumstances, applications should be remanded to SLD for reprocessing,
with priority one and priority two services being considered separately on their own merits. 
Therefore, we remand Sparta's application to SLD and we direct SLD to issue a new funding
commitment decision letter based on the originally submitted FCC Form 471 and any further
consultations with the applicant that may be necessary.
6.     ACCORDINGLY, IT IS ORDERED, pursuant to authority delegated under 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 Letter of Appeal filed by Sparta Area School District, Sparta, Wisconsin on June 3, 1999
IS GRANTED to the extent indicated herein.
7.     IT IS FURTHER ORDERED that the Administrator IS DIRECTED to implement the
decision herein.
                         FEDERAL COMMUNICATIONS COMMISSION


                              Yog R. Varma
                              Deputy Chief, Common Carrier Bureau