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Marana Unified School District, Marana, AZ

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Released: July 25, 2013

Federal Communications Commission

DA 13-1638

Before the

Federal Communications Commission

Washington, DC 20554

In the Matter of
)
)
Petitions for Reconsideration by
)
)
Marana Unified School District
)
File Nos. SLD-531607 et al.
Marana, AZ
)
)
Trillion Partners, Inc.
)
File No. SLD-611726
Austin, TX
)
)
Schools and Libraries Universal Service
)
CC Docket No. 02-6
Support Mechanism
)

ORDER ON RECONSIDERATION

Adopted: July 25, 2013

Released: July 25, 2013

By the Chief, Telecommunications Access Policy Division, Wireline Competition Bureau:
1.
Consistent with precedent,1 we deny petitions for reconsideration filed by Marana Unified
School District (Marana)2 and its service provider, Trillion Partners, Inc. (Trillion),3 (collectively,
petitioners). The petitions seek review of our Marana Order, which affirmed the decisions of the
Universal Service Administrative Company (USAC) to rescind Marana's funding commitments and seek


1 See, e.g., Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd
8776, 9076-80, paras. 570-80 (1997) (subsequent history omitted) (requiring applicants to conduct a fair and open
competitive bidding process when seeking support for eligible products and services); 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) (Schools and Libraries Third Report and Order)
(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); Requests for Review of Decisions of the Universal
Service Administrator by Approach Learning and Assessment Center et al.; Schools and Libraries Universal Service
Support Mechanism
, CC Docket No. 02-6, Order, 23 FCC Rcd 15510, 15511, para. 4 (Wireline Comp. Bur. 2008)
(stating that after submitting an FCC Form 470, the applicant must wait 28 days before making commitments with
the selected service providers).
2 Letter from Heather K. Gaines and Spencer A. Smith, Counsel to Marana Unified School District, to Marlene H.
Dortch, Secretary, Federal Communications Commission, CC Docket No. 02-6 (filed Mar. 14, 2012) (Marana
Petition for Reconsideration).
3 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. 14, 2012) (Trillion Petition for Reconsideration).

Federal Communications Commission

DA 13-1638

recovery of funding already disbursed under the E-rate program (more formally known as the schools and
libraries universal service support program) for funding years 2006 though 2010.4
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.5 E-rate program rules
provide that these entities must seek competitive bids for services eligible for support.6 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.7 The applicant must describe the
requested services with sufficient specificity to enable potential service providers to submit bids for such
services.8 After submitting an FCC Form 470, the applicant must wait 28 days before making
commitments with the selected service providers.9
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.10 Additionally, 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.11 The Commission has determined that a service provider participating in the competitive bidding
process may not be involved in the preparation of the entity's technology plan, FCC Form 470 or an
associated request for proposal (RFP).12 The Commission has also determined that all potential bidders
must have access to the same information and must be treated in the same manner throughout the
procurement process.13
4.
In the Marana Order, we found that Marana violated the Commission's competitive
bidding rules by providing information to Trillion that was not available to other bidders and by allowing


4 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
(Wireline Comp. Bur. 2012) (Marana Order) (finding that the service provider, Trillion, assisted in the preparation
of the applicant's technology plan and FCC Form 470 in violation of the Commission's competitive bidding rules).
See also infra Appendix.
5 47 C.F.R. 54.501-54.502 (2006); see also 47 C.F.R. 54.501-54.502 (2011). In this Order on
Reconsideration, we describe the requirements of the E-rate program as they currently exist, but because we address
applications from funding years 2006 through 2010, 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.
6 47 C.F.R. 54.504 (2006-2010); see also 47 C.F.R. 54.503 (2011).
7 Id.
8 Id.
9 Id.
10 47 C.F.R. 54.504, 54.511 (2006-2010); see also 47 C.F.R. 54.503, 54.511 (2011).
11 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 (2011).
12 See, e.g., MasterMind Order, 16 FCC Rcd at 4033, para. 10.
13 See generally, e.g., MasterMind Order. See also Schools and Libraries Sixth Report and Order, 25 FCC Rcd at
18799, para. 86.
2

Federal Communications Commission

DA 13-1638

Trillion to assist in the preparation of Marana's technology plan and FCC Form 470.14 Specifically, we
determined that Marana and Trillion engaged in numerous discussions regarding the applicant's
technology needs and RFP.15 We thus concluded that Marana effectively selected Trillion as its service
provider prior to posting its FCC Form 470 in violation of the Commission's fair and open competitive
bidding rules.16 Accordingly, we denied Marana's and Trillion's appeals, relying on Commission
precedent prohibiting service providers from assisting with the preparation of the applicant's FCC Form
470, technology plan, or RFP, as well as precedent requiring all potential bidders to have access to the
same information and to be treated in the same manner throughout the procurement process.17 We also
relied on Commission rules requiring applicants to wait 28 days from the date the FCC Form 470 is
posted to select a service provider to provide the desired services.18
5.
On reconsideration, the petitioners argue that Marana's competitive bidding process did not
violate E-rate program rules and that the email communications between Marana and Trillion referenced
in the Marana Order did not taint the competitive bidding process or give an unfair advantage to Trillion
over other potential bidders.19 The petitioners claim that any possible advantage that Trillion could have
gained as a result of the referenced email exchanges was neutralized by Marana's vigorous vendor
selection process.20 We disagree with the petitioners' characterization of the breadth and nature of the
communications at issue. Contrary to the petitioners' assertions, the record shows that the petitioners
had numerous discussions about what to include in Marana's technology plan, the FCC Form 470 and
Trillion's bid response.21 There is no evidence in the record to indicate that the information given to
Trillion by Marana was provided in a manner accessible to all potential bidders. Thus, we find that our
decision in the Marana Order was supported by cited precedent which clearly prohibits the actions taken
by the petitioners.22 Further, we find that the petitioners have failed to present any special circumstances
that would justify a waiver of the Commission's rules.23 We therefore affirm our decision in the Marana
Order
and deny the petitioners' requests for reconsideration.


14 See Marana Order, 27 FCC Rcd at 1529-30, para. 8.
15 Id. at 1530-34, paras. 10-15 nn.40-53.
16 Id. at 1530-32, paras. 10-11.
17 Id. at 1529-33, paras. 8-13 (citing MasterMind Order; Schools and Libraries Third Report and Order, 18 FCC
Rcd at 26939, para. 66; Request for Review of the Decision of the Universal Service Administrator by Ysleta
Independent School District et al.; Federal-State Joint Board on Universal Service; Changes to the Board of
Directors of the National Exchange Carrier Association, Inc.
, CC Docket Nos. 96-45, 97-21, Order, 18 FCC Rcd
26407 (2003)).
18 Marana Order, 27 FCC Rcd at 1529-30, para. 8; 47 C.F.R. 54.504 (2006-2010); see also 47 C.F.R. 54.503
(2011).
19 See Trillion Petition for Reconsideration; Marana Petition for Reconsideration.
20 Id.
21 See Marana Order, 27 FCC Rcd at 1530-33, paras. 10-12.
22 See generally Marana Order; supra n.1.
23 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.
3

Federal Communications Commission

DA 13-1638

6.
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 of the Commission's rules, 47 C.F.R. 0.91, 0.291, 1.3, 1.106 and
54.722, that the petitions for reconsideration filed by Marana Unified School District and Trillion
Partners, Inc., concerning the applications identified in the Appendix, ARE DENIED.
FEDERAL COMMUNICATIONS COMMISSION
Kimberly A. Scardino
Chief
Telecommunications Access Policy Division
Wireline Competition Bureau
4

Federal Communications Commission

DA 13-1638

APPENDIX

Petitioner

Funding Years

Application

Funding Request

Date of Appeals

Numbers

Numbers

Marana Unified School District
2006
531607
1468437
Dec. 9, 2010
Marana, Arizona
1468735
Mar. 28, 2011
1468603
Apr. 12, 2011
1469006
2007
569965
1573238
1587171
1587223
1587335
2008
611726
1731902
1731952
1731993
1732011
2009
661850
1867213
1867259
1867293
1867329
1907563
2010
743075
2006044
2006074
2006105
2006140
Trillion Partners, Inc.
2006
531607
1468437
Nov. 3, 2010, Dec. 9, 2010
Austin, TX
1468735
1468603
1469006
2007
569965
1573238
Nov. 3, 2010, Dec. 9, 2010
1587171
1587223
1587335
2008
611726
1731902
Nov. 3, 2010, Dec. 9, 2010,
1731952
Apr. 29, 2011
1731993
1732011
2009
661850
1867213
Nov. 3, 2010, Dec. 9, 2010
1867259
1867293
1867329
1907563
2010
743075
2006044
Nov. 13, 2010, Dec. 9, 2010
2006074
2006105
2006140
5

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