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The Bureau grants a request for review filed by Fort Worth ISD of a USA

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Released: December 4, 2012

Federal Communications Commission

DA 12-1937

Before the

Federal Communications Commission

Washington, DC 20554

In the Matter of
)
)
Request for Review of a Decision of the
)
Universal Service Administrator by
)
)
Fort Worth Independent School District
)
File Nos. SLD-203657, 203662
Fort Worth, Texas
)
)
Schools and Libraries Universal Service
)
CC Docket No. 02-6
Support Mechanism
)

ORDER

Adopted: December 4, 2012

Released: December 4, 2012

By the Chief, Telecommunications Access Policy Division, Wireline Competition Bureau:
1.
In this order we grant a request for review filed by Fort Worth Independent School District
(Fort Worth) of a decision issued by the Universal Service Administrative Company (USAC) seeking to
recover funds disbursed to Fort Worth for funding year 2000 under the E-rate program (more formally
known as the schools and libraries universal service support program).1
2.
Fort Worth applied for E-rate funding for telecommunications services, Internet access, and
internal connections for funding year 2000,2 and USAC issued funding commitment decision letters
(FCDLs) to Fort Worth committing approximately $5.3 million in E-rate support.3 Fort Worth later
invoiced USAC approximately $3.5 million for products and services it purchased pursuant to those
FCDLs.4 Subsequently, USAC conducted an audit of Fort Worth that included site visits at five schools
within the district.5 USAC determined that Fort Worth improperly invoiced USAC for un-documented


1 See Letter from Bill Richardson, Fort Worth Independent School District, to Office of the Secretary, Federal
Communications Commission, CC Docket No. 02-6 (filed Jan. 18, 2005) (regarding FCC Form 471 application
numbers 203657 and 203662) (Request for Review). Section 54.719(c) of the Commission’s rules provides that any
person aggrieved by an action taken by a division of USAC may seek review from the Commission. 47 C.F.R. §
54.719(c).
2 See FCC Form 471, Fort Worth Independent School District (dated Jan. 19, 2000) (regarding FCC Form 471
application number 203657); FCC Form 471, Fort Worth Independent School District (dated Jan. 19, 2000)
(regarding FCC Form 471 application number 203662).
3 See Letter from USAC, Schools and Libraries Division, to Warren Anderson, Fort Worth Independent School
District (dated May 11, 2001) (regarding FCC Form 471 application number 203657) (FCDL 203567); Letter from
USAC, Schools and Libraries Division, to Warren Anderson, Fort Worth Independent School District (dated Aug. 4,
2000) (regarding FCC Form 471 application number 203662) (FCDL 203662).
4 See Schools and Libraries Beneficiary Audit Report - Fort Worth Independent School District, Audit No.
SL2003BE046, Executive Summary (dated Oct. 31, 2003) (USAC Beneficiary Audit Report).
5 USAC Beneficiary Audit Report.

Federal Communications Commission

DA 12-1937

recurring services, ineligible fees, and missing switches.6 In light of its audit findings, USAC sent a
commitment adjustment decision (COMAD) letter to Fort Worth seeking recovery in the amount of
$169,649.67.7
3.
Fort Worth appealed USAC’s COMAD letter for FRN 480360 regarding overbilling
USAC for recurring telecommunications services. USAC denied Fort Worth’s appeal.8 Fort Worth then
filed the instant request for review of USAC’s entire audit decision, as well as USAC’s decision rejecting
Fort Worth’s appeal with respect to FRN 480360.9
4.
Based upon our review of the record,10 we grant Fort Worth’s request for review. With
respect to the $155,713.14 for recurring services that Fort Worth purchased pursuant to FRNs 480360 and
480362, on appeal, Fort Worth submitted detailed monthly billing statements with pre-discounted totals
that support Forth Worth’s appeal relating to those recurring services. With respect to the $13,593.83 for
four switches that USAC determined were missing, on appeal, Fort Worth has demonstrated that it
properly purchased and installed those switches. More specifically, Fort Worth submitted documentation
that it installed the switches, but later replaced the four switches with ones that had a greater capacity.11
In funding year 2000, the Commission’s rules did not prohibit E-rate applicants from upgrading their
equipment on a yearly basis.12 We find that Fort Worth’s decision to upgrade the switches and move
them to other locations within the school district was permissible under the Commission rules in effect at
the time. Finally, we note that Fort Worth concedes that $345.00 of the charges at issue for FRN 480360
were for late fees on past delinquencies and other ineligible charges and, therefore, should be recovered
by USAC.13 We therefore remand the underlying applications to USAC for further action consistent with


6 Specifically, USAC determined that for funding request numbers (FRN) 480360 and 480362, Fort Worth invoiced
USAC for $155,713.14 for recurring services for which it has insufficient supporting documentation, and, with
respect to FRN 480360, Fort Worth invoiced USAC for $345.00 for ineligible fees. USAC also sought recovery for
$13,593.83, related to FRN 452460, because Fort Worth lacked documentation for and could not locate four
switches related to that funding request. See USAC Beneficiary Audit Report.
7 See Letter from USAC, Schools and Libraries Division, to Warren Anderson, Fort Worth Independent School
District (dated May 14, 2004) (COMAD Letter).
8 See USAC Nov. 19 Letter.
9 See Request for Review.
10 The Bureau must conduct a de novo review of requests for review of decisions issued by USAC. 47 C.F.R. §
54.723.
11 Id.
12 Schools and Libraries Universal Service Support Mechanism, CC Docket No. 02-6, Third Report and Order and
Second Further Notice of Proposed Rulemaking, 18 FCC Rcd 26912, 26919, para. 17 (2003) (Schools and Libraries
Third Report and Order
) (stating that the rules, at that time, permitted applicants to upgrade their equipment on a
yearly basis, even when existing equipment continues to have a useful life). Subsequently, in 2003, the Commission
adopted rules to limit the ability of schools and libraries to engage in wasteful or fraudulent practices when
obtaining internal connections. See Schools and Libraries Third Report and Order, 18 FCC Rcd 26912, 26919,
para. 17 (determining that recipients of support are expected to use all equipment purchased with universal service
discounts at the particular location, for the specified purpose, for a reasonable period of time). Thus, in this
instance, we apply the rules in effect prior to the Schools and Libraries Third Report and Order because Fort Worth
submitted its application prior to 2003.
13 See Request for Review at 4.
2

Federal Communications Commission

DA 12-1937

this order. Specifically, we direct USAC to issue a revised COMAD letter for the $345.00 in erroneously
disbursed funds.
5.
ACCORDINGLY, IT IS ORDERED, pursuant to the authority contained in sections 1-4
and 254 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154 and 254, and 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
request for review filed by Fort Worth Independent School District, Fort Worth, Texas, IS GRANTED to
the extent indicated herein and REMANDED to USAC for further action consistent with the terms of this
order.
6.
IT IS FURTHER ORDERED, pursuant to the authority contained in sections 1-4 and 254
of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154 and 254, and pursuant to
authority delegated in sections 0.91 and 0.291 of the Commission’s rules, 47 C.F.R. §§ 0.91 and 0.291,
that USAC SHALL ISSUE a revised COMAD letter to Fort Worth Independent School District no later
than 60 calendar days from the release date of this order.
FEDERAL COMMUNICATIONS COMMISSION
Trent B. Harkrader
Chief
Telecommunications Access Policy Division
Wireline Competition Bureau
3

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