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Falcon School District 49, Falcon, CO

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Released: July 8, 2013

Federal Communications Commission

DA 13-1529

Before the

Federal Communications Commission

Washington, DC 20554

In the Matter of
)
)
Petitions for Reconsideration by
)
)
Falcon School District 49
)
File Nos. SLD-466641 et al.
Falcon, CO
)
)
Trillion Partners, Inc.
)
Austin, TX
)
)
Schools and Libraries Universal Service
)
CC Docket No. 02-6
Support Mechanism
)

ORDER AND ORDER ON RECONSIDERATION

Adopted: July 8, 2013

Released: July 8, 2013

By the Chief, Telecommunications Access Policy Division, Wireline Competition Bureau:
1.
Consistent with precedent,1 we deny two petitions for reconsideration filed by Falcon
School District 49 (Falcon) and Trillion Partners, Inc. (Trillion) (collectively, petitioners)2 of that portion
of our Charlton County Order affirming the decision by the Universal Service Administrative Company


1 See, e.g., Petition for Reconsideration by Lake Pend Oreille School District et al.; Schools and Libraries Universal
Service Support Mechanism
, CC Docket No. 02-6, Order on Reconsideration, 28 FCC Rcd 1103, 1107, para. 5
(Wireline Comp. Bur. 2013) (finding that the service provider, Trillion, and the applicant engaged in numerous and
substantive communications which provided Trillion with access to information not available to other bidders);
Requests for Review of Decisions of the Universal Service Administrator by Marana Unified School District et al.;
Schools and Libraries Universal Service Support Mechanism
, CC Docket No. 02-6, Order, 27 FCC Rcd 1525, 1529-
30, para. 8 (Wireline Comp. Bur. 2012) (Marana Order) (finding that the service provider, Trillion, engaged in
routine and numerous contacts with the applicant by discussing all aspects of the applicant's technology needs and
request for proposal in violation of the Commission's competitive bidding rules, and assisted with the preparation of
the applicant's FCC Form 470 and request for proposal); Requests for Review of Decisions of the Universal Service
Administrator by Central Islip Free Union School District et al.; Schools and Libraries Universal Service Support
Mechanism
, CC Docket No. 02-6, Order, 26 FCC Rcd 8630, 8632, para. 3 (Wireline Comp. Bur. 2011) (Central
Islip Order
) (finding that "a service provider participating in the competitive bidding process cannot be involved in
the preparation of the entity's FCC Form 470"); 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,
26939, para. 66 (2003) (stating that a fair and open competitive bidding process is critical to preventing waste, fraud,
and abuse of program resources); Request for Review of Decisions of the Universal Service Administrator by
MasterMind Internet Services, Inc.; Federal-State Joint Board on Universal Service,
CC Docket No. 96-45, Order,
16 FCC Rcd 4028, 4033, para. 10 (2000) (MasterMind Order) (finding that an applicant impairs its ability to hold a
fair competitive bidding process when it allows a service provider to provide assistance in the administration of the
competitive bidding process and participate in the process as a bidder).
2 Letter from Henry M. Rivera, Counsel to Trillion Partners, Inc., to Marlene H. Dortch, Secretary, Federal
Communications Commission, CC Docket No. 02-6 (filed Mar. 22, 2012) (Trillion Petition for Reconsideration);
Letter from Brad A. Miller, Counsel, Falcon School District 49, to Marlene H. Dortch, Secretary, Federal
Communications Commission, CC Docket No. 02-6 (filed Mar. 22, 2012) (Falcon Petition for Reconsideration).

Federal Communications Commission

DA 13-1529

(USAC) denying funding to Falcon under the E-rate program (more formally known as the schools and
libraries universal service support program) for funding years 2005 though 2010.3 Also consistent with
precedent,4 we deny the requests for review filed by Falcon and Trillion of USAC's decision denying E-
rate funding to Falcon for funding year 2012.5
2.
Under the E-rate program, eligible schools, libraries, and consortia that include eligible
schools and libraries may apply for universal service support for eligible services.6 E-rate program rules
provide that these entities must seek competitive bids for services eligible for support.7 In accordance
with the Commission's competitive bidding rules, applicants must submit for posting on USAC's website
an FCC Form 470 requesting discounts for E-rate eligible services.8 The applicant must describe the
requested services with sufficient specificity to enable potential service providers to submit bids for such
services.9 After submitting an FCC Form 470, the applicant must wait 28 days before making
commitments with the selected service providers.10
3.
The Commission's rules require applicants to carefully consider all submitted bids prior to
entering into a contract, and the price of eligible products and services must be the primary factor in
selecting the winning bid.11 The competitive bidding process must be fair and open, and must not have
been compromised because of improper conduct by the applicant, service provider, or both parties.12
Under the Commission's rules, a service provider participating in the competitive bidding process cannot
be involved in the preparation of the entity's technology plan, FCC Form 470 or an associated request for


3 Requests for Waiver and Review of Decisions of the Universal Service Administrator by Charlton County School
System et al.; Schools and Libraries Universal Service Support Mechanism
, CC Docket No. 02-6, Order, 27 FCC
Rcd 2010, 2012, App. (Wireline Comp. Bur. 2012) (Charlton County Order) (finding that the petitioners, Falcon
and Trillion, violated the Commission's competitive bidding requirements by engaging in improper communications
and failed to demonstrate good cause justifying a waiver of the Commission's competitive bidding requirements).
4 See supra n.1.
5 Letter from Edgar Class, Counsel to Trillion Partners, Inc., to Marlene H. Dortch, Secretary, Federal
Communications Commission, CC Docket No. 02-6 (filed Jan. 18, 2013) (Trillion Request for Review); Letter from
Brad A. Miller, Counsel, Falcon School District 49, to Marlene H. Dortch, Secretary, Federal Communications
Commission, CC Docket No. 02-6 (filed Jan. 28, 2013) (Falcon Request for Review).
6 See 47 C.F.R. 54.501-54.502 (2013). See also 47 C.F.R. 54.501-54.503 (2005). In this Order and Order on
Reconsideration, we describe the requirements of the E-rate program as they currently exist, but because we address
applications from funding years 2005 through 2010, and 2012, and the Commission has reorganized the E-rate rules
in the interim, where the Commission's codification of the rules in the Code of Federal Regulations has changed, we
also cite to the relevant rules as they existed during the relevant funding years.
7 See 47 C.F.R. 54.503 (2013). See also 47 C.F.R. 54.504 (2005).
8 See 47 C.F.R. 54.503(c) (2013). See also 47 C.F.R. 54.504(b) (2005).
9 See id.
10 See id. See also, e.g., Requests for Review of Decisions of the Universal Service Administrator by Approach
Learning and Assessment Centers et al.; Schools and Libraries Universal Service Support Mechanism
, CC Docket
No. 02-6, Order, 23 FCC Rcd 15510 (Wireline Comp. Bur. 2008).
11 See 47 C.F.R. 54.511(a) (2013). See also 47 C.F.R. 54.511(a) (2005).
12 See supra n.1. In the Schools and Libraries Sixth Report and Order, the Commission codified the existing
requirement that the E-rate competitive bidding process be fair and open. See Schools and Libraries Universal
Service Support Mechanism; A National Broadband Plan for Our Future
, CC Docket No. 02-6, GN Docket No. 09-
51, Sixth Report and Order, 25 FCC Rcd 18762, 18798-800, paras. 85-86 (2010) (Schools and Libraries Sixth
Report and Order
); 47 C.F.R. 54.503.
2

Federal Communications Commission

DA 13-1529

proposals.13 In addition, all potential bidders and service providers must have access to the same
information and must be treated in the same manner throughout the procurement process.14
4.
In denying Falcon's and Trillion's appeals, in the Charlton County Order, we relied on
Commission rules15 and precedent that requires that all potential bidders have access to the same
information and must be treated in the same manner throughout the procurement process.16 The record
shows that Falcon provided detailed information to Trillion about its needs and worked with Trillion on a
proposal prior to beginning the competitive bidding process for funding year 2005.17 The record also
specifically shows that, for funding year 2008, Trillion offered to reduce its rates for the wide area
network (WAN) services it was currently providing Falcon, in exchange for winning the bid for voice
over IP (VOIP) services.18 Thus, consistent with precedent, we correctly found in the Charlton County


13 See, e.g., 47 C.F.R. 54.503(a) (note); Marana Order, 27 FCC Rcd at 1532-33, paras. 12-13; Central Islip Order,
26 FCC Rcd at 8636, para. 14; MasterMind Order, 16 FCC Rcd at 4033, para. 10.
14 See Schools and Libraries Sixth Report and Order, 25 FCC Rcd at 18799, para. 86.
15 See 47 C.F.R. 54.503(a) (2013). See also 47 C.F.R. 54.504(a) (2004).
16 See supra n.1. See also Charlton County Order, 27 FCC Rcd at 2010, para. 1.
17 There were numerous communications from June through September of 2004 between Gary Gaessler from
Trillion and Alfred Green from Falcon. We list a few of those communications here as examples. See, e.g., Email
from Gary Gaessler, Trillion Partners, Inc., to Alfred Green, Technology Coordinator, Falcon School District 49
(dated Aug. 10, 2004) ("Subject: Trillion Falcon SD #49 proposal" stating "Attached is your Trillion WWAN and
IP-Shortel proposal. I noticed we may be missing Ridgeview ES? Please confirm this and let me know if there are
any other sites that need to be added. I hope this reaches you in time for your meeting with your manager this am.
Roger and I are planning on attending your board meeting this Thursday."); Email from Gary Gaessler, Trillion
Partners, Inc., to Alfred Green, Technology Coordinator, Falcon School District 49 (dated Jul. 28, 2004) (stating
"Finishing up on your Trillion proposal and left you a voicemail for the items below . . . 1. Do you want your quote
to include our bundled services: (portal, email, DNS, Firewall, Filtering and VPN)? We can quote with or without
(erate eligible) 2. Current phone system questions: a. make/manufacturer b. # of trunks/ c. Trunk types? d. Phone
system station count: analog? i. # multiline? ii. # display? iii.# wireless? iv. # e. Quest/LEC facilities/Type &
quantity: POTS lines? i.# PRI's? ii. # Centrex? Iii. # 3. Do you want Airspace Wireless Lan quote also?"); Email
from Alfred Green, Technology Coordinator, Falcon School District 49, to Gary Gaessler, Trillion Partners, Inc.
(dated Jul. 14, 2004) (stating "Answers for some of your questions follow. Question 1. August 12th Question 2. Yes
Question 3. Powers Corridor PTPs a. Central Admin to Evans Elem: $402.43 b. Central Admin to Remington Elem:
$402.43 Central Admin to Springs Ranch Elem: $492.00 d. Central Admin to Stetson Elem: $402.43 e. Central
Admin to Ridgeview Elem: $492.00 g. Central Admin to Horizon Middle: $402.43 g. Central Admin to Skyview
Middle: $402.43 Central Admin to Sand Creek High: $402.43 Falcon Area PTPs i. Central Admin to Special
Services: $216.00 j. Central Admin to Falcon Elem: $216.00 k. Central Admin to Woodmen Hills Elem: $216.00
Central Admin to Meridian Ranch Elem: $216.00 m. Central Admin to Falcon Middle: $216.00 n. Central Admin to
Falcon High: $216.00 Question 4. Presently one T-1 from Central Administration to Quest POP Monthly recurring
cost is $1100. No term agreement to the best of my knowledge, but I'll follow-up on that. Question 5. Estimated
number of students 9,250 (official count from last Oct. is 8,860) Number of teachers is approx. 550. Total staff
include administrators, etc. is approx. 1,100. Question 6. Lets talk. Question 7. A. District avg: 15.4% b. Break
down by school (1) Evans Elem: 37.8% (2) Falcon Elem: 27.7% (3) Horizon Middle: 19.3% (4) Ridg[e]view Elem:
18.7% (5) Remington Elem: 16.5% (6) Stetson Elem: 16.5% (7) Falcon Middle: 14.8% (8) Skyview Middle: 12.6 %
(9) Sand Creek High: 10.5% (10) Falcon High: 10.4% (11) Springs Ranch Elem: 7.0% (12 Woodmen Hills Elem:
6.9% (13) Meridian Ranch Elem: 0.0% (New School...no data yet) Question 8. 20, Full question 9. Need to check
on this. Question 10. Don't know of any that we have access too, but there appears to be two towers approx. 3-5
miles SSE of Central Admin. See attached graphic").
18 See, e.g., Email from David Bond, Falcon School District 49, to Barbara Cannan, Schools and Libraries Division,
USAC (dated June 18, 2009) (stating that "We requested that Trillion respond to a bid solicited through the form
470 we submitted with a submission that year that would include services that would replace our existing wide-area
network services and provide voice over IP phone service. If their proposal was the successful submission, we
would void the existing contract for wide-area network services and internet connections services in lieu of the new
(continued...)
3

Federal Communications Commission

DA 13-1529

Order that Falcon violated the Commission's competitive bidding rules by providing information to
Trillion that was not available to other bidders and demonstrating a preference towards Trillion by giving
it an unfair advantage over other potential bidders.19 While Trillion argues that the Charlton County
Order
failed to provide a reasoned analysis,20 we find that our denial was fully supported by cited
precedent which clearly prohibits the actions taken by the petitioners here.21
5.
We therefore deny Falcon's and Trillion's petitions for reconsideration on the merits. The
petitioners agree that the E-rate competitive bidding process should be fair and open, and they do not
dispute that they had communications with each other.22 The petitioners instead claim the
communications were only to "clarify specifications and the existing infrastructure,"23 and included
information available to the broad public pursuant to Colorado state law.24 Furthermore, Falcon claims
that "Trillion did not have advance knowledge of project information."25 We disagree with the
petitioners' characterization of the breadth and nature of the communications. The record demonstrates
that the petitioners discussed subjects that provided Trillion with information such as Falcon's exact
technical requirements, infrastructure and solutions for specific school sites.26 The petitioners also had
discussions about what to include in Trillion's proposal for the district.27 Moreover, the communications
were between Trillion, a potential service provider, and Falcon's FCC Form 470 contact person who had
influence in Falcon's competitive bidding process.28 Falcon attempts to justify its communications with
Trillion by arguing that its FCC Form 470 contact person also met with representatives of other services
providers and provided them with the same information.29 However, there is no evidence in the record
(Continued from previous page)


contract for enhanced wide-area network services and voice over IP phone service. . . If Trillion was not the
successful bidder, the existing contract would remain in place for the existing services. WE also evaluated the
submission against alternative solutions that were not E-rate eligible"); Email from David Bond, Falcon School
District 49, to Michael Deusinger, Schools and Libraries Division, USAC (dated June 12, 2010) ("Trillion had
previously agreed to provide lower rates and enhanced quality of service for the WAN services for which they were
already under contract if they were the successful bidder for VOIP services. In order to put the new rates and
enhanced quality of service into effect and make them biding, we signed a contract with the altered provisions. . .
The District was and is not aware of any provisions of the E-rate program that precludes a service provider from
making beneficial changes to the rates or quality of service provided within one category of service contingent on
successfully securing a contract in another category of service.").
19 See Charlton County Order, 27 FCC Rcd at 2010, para. 1.
20 See Trillion Petition for Reconsideration at 3-4.
21 See Charlton County Order, 27 FCC Rcd at 2010, para. 1.
22 See, e.g., Trillion Petition for Reconsideration at 6; Falcon Petition for Reconsideration at 2.
23 See, e.g., Trillion Petition for Reconsideration at 5.
24 See, e.g., Falcon Request for Review at 5-6; Trillion Petition for Reconsideration at 6.
25 See Falcon Request for Review at 5.
26 See supra n.17.
27 See id.
28 See FCC Form 470 Falcon School District 49 (posted Dec. 14, 2004) (listing "Al Green" as Falcon's contact
person). The record includes emails which demonstrate Alfred Green's influence in Falcon's competitive bidding
process. See, e.g., Email from Alfred Green, Technology Coordinator, Falcon School District 49, to Gary Gaessler,
Trillion Partners, Inc. (dated Aug. 10, 2004) ("Subject: Re: Trillion Falcon SD #49 proposal" stating "Gary, got it!
I'm prepping my presentation that I will be showing my boss this morning. I'll touch base with you this
afternoon.").
29 See Falcon Request for Review at 5.
4

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DA 13-1529

demonstrating that Falcon's shared the same information with all other potential bidders as it shared with
Trillion. Instead, the record shows that Falcon provided Trillion with information and preferential
treatment that were not provided to all other potential bidders, in violation of the Commission's
competitive bidding requirements.30 Finally, Falcon failed to present any special circumstances that
would justify a waiver of the Commission's rules.31 We, therefore, affirm our Charlton County Order,
and deny the petitions for reconsideration from Falcon and Trillion.
6.
For the same reasons discussed above, we also deny Falcon's and Trillion's requests for
review related to Falcon's applications for funding years 2012.32 Falcon's funding year 2012 applications
relied on the same competitive bidding process conducted for funding year 2008.33 Thus, USAC, relying
on our Charlton County Order, denied Falcon's funding year 2012 application.34 Because we are now
upholding our decision with respect to funding years 2008 through 2010, we also find it appropriate to
deny Falcon's and Trillion's requests for review for funding year 2012.35
7.
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, 1.3, 1.106, and 54.722(a) of the Commission's rules, 47 C.F.R. 0.91, 0.291, 1.3, 1.106 and
54.722(a), that the petitions for reconsideration and requests for review filed by Falcon School District 49
and Trillion Partners, Inc., as identified in Appendices A and B, ARE DENIED.
8.
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 sections 0.91,
0.291, and 1.106 of the Commission's rules, 47 C.F.R. 0.91, 0.291, 1.106, that USAC SHALL


30 See supra n.1.
31 Generally, the Commission's rules may be waived if good cause is shown. 47 C.F.R. 1.3. The Commission
may exercise its discretion to waive a rule where the particular facts make strict compliance inconsistent with the
public interest. Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (Northeast
Cellular
). In addition, the Commission may take into account considerations of hardship, equity, or more effective
implementation of overall policy on an individual basis. WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir.
1969); Northeast Cellular, 897 F.2d at 1166. Waiver of the Commission's rules is appropriate only if both (i)
special circumstances warrant a deviation from the general rule, and (ii) such deviation will serve the public interest.
Northeast Cellular, 897 F.2d at 1166.
32 See Appendix B.
33 See Falcon Request for Review at 4. See also FCC Form 471 Falcon School District 49 (dated Feb. 23, 2012)
(identifying the FCC Form 470 Falcon School District 49 which was posted Nov. 29, 2007, as the applicable FCC
Form 470 for funding request numbers (FRN) 2273728 and 2273735).
34 See Letter from USAC, Schools and Libraries Division, to Virginia Bryant, Trillion Partners, Inc. (dated Nov. 29,
2012) (regarding Falcon School District 49 FY 2012 FCC Form 471 application number 838063, FRNs 2273728
and 2273735) (stating that "[c]onsistent with FCC Order DA 12-260, the FCC has determined that your competitive
bidding process was flawed due to improper service provider involvement in the competitive bidding process that
[led] to this contract. Therefore, funding is denied.").
35 Falcon's funding year 2012 application relied on the same competitive bidding process conducted for funding
years 2008-2010. See supra n.33.
5

Federal Communications Commission

DA 13-1529

CONTINUE its recovery actions against Falcon School District 49 and Trillion Partners, Inc., to the
extent provided herein.36
FEDERAL COMMUNICATIONS COMMISSION
Kimberly A. Scardino
Chief
Telecommunications Access Policy Division
Wireline Competition Bureau


36 See Demand Payment Letter from USAC, Schools and Libraries Division, to Trillion Partners, Inc. (dated Feb. 28,
2012) (regarding funding year 2005 FCC Form 471 application number 466641, FRN 1299916, seeking recovery
for $60,366.60); Demand Payment Letter from USAC, Schools and Libraries Division, to Trillion Partners, Inc.
(dated Feb. 28, 2012) (regarding funding year 2006 FCC Form 471 application number 532406, FRNs 1472041 and
1472101, seeking recovery for $26,410.14 and $117,356, respectively); Demand Payment Letter from USAC,
Schools and Libraries Division, to Trillion Partners, Inc. (dated Feb. 28, 2012) (regarding funding year 2007 FCC
Form 471 application number 577449, FRNs 1606490 and 1606940, seeking recovery for $136,215.51 and
$38,377.80, respectively).
6

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DA 13-1529

APPENDIX A

Petitions for Reconsideration Denied

Petitioner

Application

Funding

Date Request for

Numbers

Years

Review/Waiver Filed

Falcon School District 49
466641
2005
Mar. 22, 2012
Falcon, CO
532406
2006
Mar. 22, 2012
577449
2007
Mar. 22, 2012
627866
2008
Mar. 22, 2012
662600
2009
Mar. 22, 2012
717469
2010
Mar. 22, 2012
Trillion Partners, Inc.
466641
2005
Mar. 22, 2012
Austin, TX
532406
2006
Mar. 22, 2012
(Falcon School District 49
577449
2007
Mar. 22, 2012
Falcon, CO)
627866
2008
Mar. 22, 2012
662600
2009
Mar. 22, 2012
717469
2010
Mar. 22, 2012

APPENDIX B


Requests for Review Denied

Petitioner

Application

Funding

Date Request for

Number

Year

Review/Waiver Filed

Falcon School District 49
838063
2012
Jan. 28, 2013
Falcon, CO
Trillion Partners, Inc.
828542
2012
Jan. 18, 2013
Austin, TX
(Falcon School District 49
Falcon, CO)
7

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