Federal Communications Commission.
In this document, the Federal Communications Commission has under consideration a Request for Immediate Relief filed by the State of Tennessee (Tennessee). Tennessee seeks approval to change its service provider for Funding Year 2002 of the schools and libraries universal service support mechanism, before the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC) has issued a Funding Commitment Decision Letter (FCDL) to Tennessee for Funding Year 2002. For the reasons set forth below, we grant Tennessee's Petition in part, and instruct USAC to process Tennessee's request.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Romanda Williams, Attorney, Telecommunications Access Policy Division, Wireline Competition Bureau, (202) 418-7400, TTY: (202) 418-0484.End Further Info End Preamble Start Supplemental Information
This is a summary of the Commission's Order in CC Docket Nos. 96-45 and 97-21; FCC 03-161 released on July 2, 2003. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth Street, SW., Washington, DC, 20554.
1. The Federal Communications Commission has under consideration a Request for Immediate Relief filed by the State of Tennessee (Tennessee). Tennessee seeks approval to change its service provider for Funding Year 2002 of the schools and libraries universal service support mechanism, before the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC) has issued a Funding Commitment Decision Letter (FCDL) to Tennessee for Funding Year 2002. For the reasons set forth below, we grant Tennessee's Petition in part, and instruct USAC to process Tennessee's request in accordance with this Order.
2. We conclude that it is appropriate to grant, in part, Tennessee's request by modifying the Good Samaritan policy in this limited instance. We direct USAC to process Tennessee's application and Good Samaritan election in accordance with the conditions set forth in this Order.
3. The Commission takes seriously all allegations of waste, fraud, and abuse. We are fully committed to maintaining the integrity of the schools and libraries support mechanism so that we adequately discharge our statutory obligation to preserve and advance universal service. At the same time, we recognize that inaction on a funding request during the pendency of a criminal investigation may have the effect of penalizing parties that are in no way implicated in potential wrongdoing. Based on the circumstances presented, we conclude that it is justified in this instance to allow Tennessee to substitute service providers for purposes of passing through payments to subcontractors.
4. In reaching this decision, we find several factors persuasive. First, we are not aware of any allegations of waste, fraud, abuse, or other wrongdoing relating to any of the subcontractors that have provided service under the Education Networks of America, Inc. (ENA) contract, or, for that matter, the award of the specific ENA contract itself. The relevant subcontractors have provided service in good faith to the schools of Tennessee, in reliance on the contractual agreement between ENA and Tennessee. Second, in granting the requested relief to Tennessee, the risk of improperly paying a potential wrongdoer is diminished because, as discussed more fully below, no funds will be paid to ENA pending further developments in the ongoing investigation. Third, we find it significant that Tennessee was not in a position to take any action to protect its ability to receive universal service discounts in Funding Year 2002. The investigation involving ENA was made public five months after the commencement of the funding year, long after the filing window for Funding Year 2002 has closed, and long after Start Printed Page 43473Tennessee had entered into a contract with ENA for that funding year.
5. We conclude that, in light of the specific circumstances and the enumerated safeguards, it is appropriate to apply a modification of the Good Samaritan policy in this instance. We instruct USAC to grant Tennessee's request to substitute a common carrier as its Good Samaritan service provider for Funding Year 2002, consistent with its existing procedures for Good Samaritan providers and to process Tennessee's funding request. USAC shall determine whether the selected common carrier meets its existing criteria for identifying a substitute service provider. If USAC determines that Tennessee's application for Funding Year 2002 otherwise complies with the rules of the schools and libraries program, USAC shall issue a funding commitment to Tennessee. Upon determining that all of the invoices submitted by ENA's subcontractors comply with program rules and procedures, USAC then may disburse funds to the designated common carrier for payment to ENA's subcontractors. USAC should determine the identities of the subcontractors, their portion of the contract, and the portion associated with services provided by ENA. USAC should ascertain what services have been rendered, the total cost of those services, and the amount that Tennessee has actually paid for the services rendered. USAC may disburse funds for services delivered until the end of Funding Year 2002.
6. We also instruct USAC to set aside on ENA's account any funds that would have been paid to ENA to compensate it directly for its services under the Tennessee contract, but we do not authorize any payment to ENA at this time. We do not know how long the pending investigation may continue, and cannot predict its ultimate resolution. Absent an indictment or other public action, it may be difficult to determine whether the relevant authorities have concluded their investigation. We therefore cannot specify at this time the circumstances under which it would be appropriate for Tennessee or ENA to petition for reimbursement of funds owed to ENA for services rendered pursuant to ENA's Funding Year 2002 contract with Tennessee. At the same time, we expressly contemplate that ENA should have the opportunity to make its case at some future date that the remaining funds should be released to it for services rendered. If, however, ENA ultimately is found either civilly or criminally liable for any actions arising out of its participation in the schools and libraries program, the Commission shall initiate debarment proceedings pursuant to the rules adopted in the Commission's most recent order relating to the schools and libraries universal service mechanism.
7. We deny Tennessee's request that payments be made to its selected Good Samaritan provider to cover the salaries of certain key ENA employees who are necessary to keep the network operational for the remainder of the school year. We remain concerned about any funds going to persons currently employed by ENA at this point, especially given the percentage of funding that Tennessee asserts is required to pay these individuals. We encourage Tennessee to explore alternative arrangements to ensure that its network continues to support the educational mission of the state.
8. In reaching this decision, we seek to balance USAC's proper caution in acting on a funding request that may be associated with a law enforcement investigation with the equally important objective of avoiding potentially harmful effects on third parties. We recognize that the circumstances surrounding other investigations may vary significantly. In granting this petition, we emphasize the narrowness of this fact-specific determination. We do not intend our action today to affect the efficient administration of this universal service support mechanism.
9. In conclusion, we emphasize that we seek to guard against waste, fraud and abuse, while ensuring that universal service is preserved and advanced. We recognize that the ongoing investigation may call into question compliance with Commission rules and requirements. If it is ultimately determined that Tennessee, ENA, or other party has violated any program requirements, the Commission shall take all appropriate actions to address that wrongdoing, including, if merited, seeking reimbursement of disbursed funds. It remains incumbent upon the applicant to ensure its compliance with all program rules. But we decline to relegate the Tennessee Funding Year 2002 application to limbo indefinitely, during the pendency of this ongoing investigation.
III. Ordering Clause
10. Pursuant to sections 1-4, and 254 of the Communications Act of 1934, 47 U.S.C. 151-154 and 254, and § 54.503 of the Commission's rules, that the Petition for Immediate Relief filed by the State of Tennessee on April 17, 2003, is granted to the extent provided herein. We instruct SLD to process Tennessee's Funding Year 2002 application and, if appropriate, disburse funds to the designated Good Samaritan provider, as provided herein.Start Signature
Federal Communications Commission.
William F. Caton,
[FR Doc. 03-18640 Filed 7-22-03; 8:45 am]
BILLING CODE 6712-01-P