Federal Communications Commission FCC 10-33 Before the Federal Communications Commission Washington, DC 20554 In the Matter of ) ) Schools and Libraries Universal Service ) CC Docket No. 02-6 Support Mechanism ) ORDER AND NOTICE OF PROPOSED RULEMAKING Adopted: February 18, 2010 Released: February 19, 2010 Comment Date: (30 days after publication in the Federal Register) Reply Comment Date: (45 days after publication in the Federal Register) By the Commission: Chairman Genachowski and Commissioners Copps, McDowell and Clyburn issuing separate statements I. INTRODUCTION 1. This item enables schools that receive funding from the E-rate program (more formally, the schools and libraries universal service support program) to allow members of the general public to use the schools’ Internet access during non-operating hours. In the order, we waive, on our own motion and through funding year 2010 (which ends June 30, 2011), rules that currently discourage public use of resources funded by E-rate. 1 In the notice of proposed rulemaking (NPRM), we seek comment on revising our rules to make the change permanent. This change will leverage universal service funding to serve a larger population at no increased cost to the E-rate program. The general public will be able to use the Internet access already present in schools, at the schools’ discretion, for purposes such as job searches and applications, digital literacy programs, and online access to governmental services and resources. 2. Currently, Commission rules require schools to certify that they will use E-rate funded services solely for educational purposes, defined as activities that are integral, immediate, and proximate to the education of students. As a result, services and facilities purchased by schools using E-rate funding remain largely unused during evenings, weekends, school holidays, and summer breaks. Waiving the relevant rules will maximize the use of facilities and services supported by E-rate by giving schools the option to open their E-rate funded facilities to members of the public during non-operating hours. Increasing community access to the Internet is particularly critical to communities in which residential adoption of broadband Internet access has historically lagged, including many rural, minority, and Tribal communities. Moreover, the waiver we grant today is consistent with the use of E-rate funding by libraries, which provide Internet access to members of the general public as part of their mission. Finally, by making Internet access available to more members of the public, this waiver furthers the goals of universal service and the congressional directive to encourage access to advanced telecommunications and information services.2 3. We limit this waiver to the 2009 and 2010 funding years, ending on June 30, 2011. This waiver is subject to the following conditions: (1) schools participating in the E-rate program are not 1 See 47 C.F.R. §§ 54.504(b)(2)(v); 54.504(c)(1)(vii). 2 See 47 U.S.C. § 254(b). Federal Communications Commission FCC 10-33 2 permitted to request more services than are necessary for “educational purposes”;3 (2) any community use of E-rate funded services at a school facility is limited to non-operating hours, such as after school hours or during times when the students are out of school; and (3) consistent with the Communications Act of 1934, as amended by the Telecommunications Act of 1996 (the Act), schools’ discounted services or network capacity may not be “sold, resold, or transferred by such user in consideration for money or any other thing of value.”4 In the NPRM, we seek comment on revising our rules to enable schools to allow the use of services and equipment funded under the E-rate program by the community during non- operating school hours. We also seek comment on conditions that should be established to guard against potential additional costs being imposed on the E-rate program and to reduce the likelihood of waste, fraud, and abuse. II. BACKGROUND 4. Under the E-rate program, eligible schools, libraries, and consortia that include eligible schools and libraries may apply for discounts for eligible telecommunications services, Internet access, internal connections, and basic maintenance of internal connections.5 The Act provides that discounts should be given to eligible schools and libraries for educational purposes.6 To implement this provision, in the Universal Service First Report and Order, the Commission required schools and libraries to certify, among other things, that services obtained through discounts from the E-rate program would be used solely for “educational purposes.”7 The Commission noted that all of the certification requirements were intended to encourage accountability on the part of schools and libraries.8 Subsequently, in the Schools and Libraries Second Report and Order, the Commission clarified the meaning of “educational purposes” as “activities that are integral, immediate, and proximate to the education of students, or in the case of libraries, integral, immediate, and proximate to the provision of library services to library patrons.”9 As a result, use of services and facilities funded by E-rate for non-educational purposes would not be an eligible use, and schools are required to reduce their funding request by the amount of the ineligible use.10 3 See 47 C.F.R. § 54.500(b) (defining “educational purposes” as “activities that are integral, immediate, and proximate to the education of students, or in the case of libraries, integral, immediate, and proximate to the provision of library services to library patrons.”). 4 47 U.S.C. § 254 (h)(1)(B). 5 47 C.F.R. §§ 54.501-54.503. 6 47 U.S.C. § 254 (h)(1)(B). 7 47 C.F.R. § 54.504(b)(2)(v) (requiring applicants to certify on their FCC Form 470 that services obtained through discounts from the E-rate program would be used solely for educational purposes); Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report and Order, 12 FCC Rcd 8776, 9079, para. 577 (1997) (Universal Service First Report and Order), aff’d in part, rev’d in part, remanded in part sub nom, Texas Office of Public Utility Counsel v. FCC, 183 F.3d 393 (5th Cir. 1999), cert. denied, 530 U.S. 1210 (2000), cert. dismissed, 531 U.S. 975 (2000). This requirement was originally codified in section 54.504(b)(2)(ii) of the Commission’s rules. See 47 C.F.R. § 54.504(b)(2)(ii) (1998). Subsequently, in the Schools and Libraries Fifth Report and Order, the Commission codified the requirement that applicants must also certify on their FCC Form 471 that services obtained through discounts from the E-rate program would be used solely for educational purposes. See Schools and Libraries Universal Service Support Mechanism, CC Docket 02-6, Fifth Report and Order and Order, 19 FCC Rcd 15808, 15831, para. 68 (2004); 47 C.F.R. § 54.504(c)(1)(vii). 8 Universal Service First Report and Order, 12 FCC Rcd at 9076, para. 570. 9 Schools and Libraries Second Report and Order, 18 FCC Rcd at 9208, paras. 17-18; 47 C.F.R. § 54.500(b). 10 47 C.F.R. § 54.504(g). Federal Communications Commission FCC 10-33 3 5. In the Alaska Order, the Commission granted a limited waiver of section 54.504(b)(2)(v) of the Commission’s rules to the State of Alaska to allow members of certain rural remote communities in Alaska to use excess service obtained through the E-rate program when the services were not in use by Alaskan schools and libraries.11 In granting this waiver to the State of Alaska, the Commission found that nothing in the Act prohibited it from granting a waiver of the “educational purposes” certification to expand the use of such services so long as, in the first instance, they are used for educational purposes.12 Thus, the Commission granted the State of Alaska’s waiver request dependent upon the implementation of certain conditions, including that any use of underutilized service by the community would be limited to non-operating hours.13 The Commission found that, consistent with the Act, maximizing the use of services obtained from the E-rate program by permitting such rural remote communities to use the excess service furthered the goals of universal service.14 6. In November 2009, the Commission sought comment on various issues related to broadband access and usage in education as part of the Commission’s development of a national broadband plan.15 In addition, the Commission sought comment on how it could modify the E-rate program to improve broadband deployment to schools and libraries and how the program could be a vehicle to stimulate the adoption of broadband more widely in communities.16 The Commission also sought comment on whether and how the E-rate program could be structured to more effectively distribute available funding.17 As part of this public notice seeking comment on issues related to the E- rate program, the Commission specifically sought comment on whether the program could be modified to allow for the use of broadband facilities at schools by the general community rather than just by students 11 Federal-State Joint Board on Universal Service, Petition of the State of Alaska for Waiver for the Utilization of Schools and Libraries Internet Point-of-Presence in Rural Remote Alaska Villages Where No Local Access Exists and Request for Declaratory Ruling, CC Docket No. 96-45, Order, 16 FCC Rcd 21511 (2001) (Alaska Order). As noted above, this requirement was originally codified in section 54.504(b)(2)(ii) of the Commission’s rules. See supra n.7; 47 C.F.R. § 54.504(b)(2)(ii) (1998). In granting Alaska’s waiver request, the Commission: (1) limited the application of the waiver to Alaskan communities where there was no local or toll-free dial-up Internet access; (2) disallowed eligible schools and libraries from requesting more services than were necessary for educational purposes; (3) limited the waiver to communities where the services used by the schools were purchased on a non- usage sensitive basis; (4) limited local community usage to hours in which the school or library was not open; and (5) provided that excess services were to be made available to all capable service providers in a neutral manner that did not require or take into account any commitments or promises from the service providers. Id. at 21516-18, paras. 12-17. 12 Id. at 21514-15, para. 8. 13 Id. at 21516-18, paras. 12-18. 14 Id. at 21514, para. 7; 47 U.S.C. § 254; see also Section 706 of the Act, reproduced in the notes under 47 U.S.C. § 157. Section 706 directs the Commission and the states to utilize various regulatory methods to “encourage deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans[.]” 15 Schools and Libraries Universal Service Support Mechanism, CC Docket No. 02-6, National Broadband Plan Public Notice #15, Comment Sought on Broadband Needs in Education, Including Changes to E-rate Program to Improve Broadband Deployment, DA 09-2376 (rel. Nov. 3, 2009) (NBP Public Notice #15). 16 Id. 17 Id. Federal Communications Commission FCC 10-33 4 and faculty.18 Comments were due by November 20, 2009, and reply comments were due by December 11, 2009.19 III. DISCUSSION 7. For the reasons discussed below, we grant, on our own motion, to all schools participating in the E-rate program a waiver of sections 54.504(b)(2)(v) and 54.504(c)(1)(vii) of our rules, which require applicants to certify on their FCC Forms 470 and 471 that the services requested will be used solely for educational purposes.20 This limited waiver is subject to the conditions discussed below and extends through the close of funding year 2010 (June 30, 2011). Specifically, this waiver allows schools the option to open their facilities to the general public to utilize services and facilities supported by E-rate during non-operating hours, such as after school hours, on the weekends, on school holidays, or during the summer months when schools are not in session, for other purposes, such as adult education, job training, digital literacy programs, and online access to governmental services and resources.21 We believe that this limited waiver will encourage greater use of schools’ Internet access and other supported services while furthering community access to these valuable resources. As a result of this waiver, schools choosing to allow the community to access their services and facilities purchased with E-rate funding will not be required to cost-allocate between community use and school use of the facility. 8. The Commission may waive any provision of its rules on its own motion and for good cause shown.22 A rule may be waived where the particular facts make strict compliance inconsistent with the public interest.23 In addition, the Commission may take into account considerations of hardship, equity, or more effective implementation of overall policy on an individual basis.24 In sum, waiver is appropriate if special circumstances warrant a deviation from the general rule, and such deviation would better serve the public interest than strict adherence to the general rule.25 9. We agree with commenters that waiving section 54.504(b)(2)(v) and 54.504(c)(1)(vii) of our rules for less than 18 months for schools participating in the E-rate program satisfies the conditions 18 Id. at 6; see also Schools and Libraries Universal Service Support Mechanism, CC Docket 02-6, Notice of Proposed Rulemaking, 17 FCC Rcd 1914, 1932-33, paras. 45-47 (2002). 19 Id. at 1. 20 47 C.F.R. §§ 54.504(b)(2)(v); 54.504(c)(1)(vii). 21 See, e.g., West Virginia Department of Education (WV DOE) NBP Public Notice #15 Comments at 6-8 (stating that “the education of adults as members of the school community is part of the education mission of schools and adult literacy is critical in that it develops these individuals to become productive members of society”); State E-rate Coordinators Alliance (SECA) NBP Public Notice #15 Comments at 15 and WV DOE NBP Public Notice #15 Comments at 6-8 (citing the No Child Left Behind Title II, Part D, which identifies 12 criteria that must be addressed by schools, specifically, requiring a description of how programs will be developed, where applicable, in collaboration with adult literacy service providers to maximize the use of technology). We note that this waiver applies to community members who access the Internet while on a school’s campus. See Requests for Review of Eagle Hill School, et al., Schools and Libraries Universal Service Support Mechanism, File Nos. SLD-84941, et al., CC Docket No. 02-6, Order, 24 FCC Rcd 12714 (Wireline Comp. Bur. 2009). 22 47 C.F.R. § 1.3. 23 Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (Northeast Cellular). 24 WAIT Radio v. FCC, 418 F.2d 1153, 1157, (D.C. Cir. 1969), affirmed by WAIT Radio v. FCC, 459 F.2d 1203 (D.C. Cir. 1972). Accord NetworkIP, LLC v. FCC, 548 F.3d 116, 127 (D.C. Cir. 2008). 25 Northeast Cellular, 897 F.2d at 1166. Federal Communications Commission FCC 10-33 5 for waiver.26 Specifically, we believe that this waiver will promote broadband access across the nation and increase the efficiency and cost-effectiveness of services and facilities funded under the E-rate program. We conclude that granting this limited waiver to schools participating in the E-rate program will serve the public interest by promoting community access to available services currently under- utilized after school hours or when schools are closed, such as evenings, weekends, school holidays, or during the summer months. That is, by allowing schools the option to open their networks to the public to use computer rooms and Internet access during non-operating hours for the purpose of job training, tutoring, or other purposes, we will leverage E-rate funding to serve a larger population. We also find that this waiver serves the goals of universal service by making Internet access available to more members of the general public.27 It is also consistent with the Commission’s directive from Congress to encourage access to advanced telecommunications and information services.28 Further, the waiver is consistent with the use of services funded through E-rate for libraries, which are open to the public for more general purposes, such as access to Internet services.29 10. We also conclude that special circumstances exist to justify a waiver of our rules. During this time of high unemployment and limited resources, many people across the nation lack access to or have limited access to affordable Internet services for job training and educational opportunities, particularly in rural, minority, and Tribal communities.30 Further, many employers no longer accept 26 47 C.F.R. §§ 54.504(b)(2)(v); 54.504(c)(1)(vii). See generally, Oregon Department of Education (OR DOE) NBP Public Notice #15 Comments at 6 (recommends allowing community use of the network at school for school-hosted events, non-profit events, such as job fairs, vaccination clinics); Alaska Department of Education and Early Development (AK DOE) NBP Public Notice #15 Comments at 71 (recommends allowing use of school networks as public computer centers after school); American Association of School Administrators and Association of Educational Service Agencies (AASA & AESA) NBP Public Notice #15 Comments at 5 (asserts that students should be able to access the school’s network after hours for homework, etc. E-rate should not be expanded to new applicants); Dell, Inc. (Dell) NBP Public Notice #15 Comments at 3-4 (asserts that the use of E-rate subsidized broadband connections should be accessible by the entire community; broad access facilitates employee training, job searches, and other uses that stimulate economic activity); Kellogg and Sovereign Consulting (KS) NBP Public Notice #15 Comments at 8 (believes that expanding access to the general community would make a significant impact on the community as a whole); University of Alaska (Univ. Alaska) NBP Public Notice #15 Comments at 2- 3 (supports expanding the definition of “educational purposes” to allow use of E-rate services by communities during non-school hours); Wisconsin Department of Public Instruction (WIDPI) NBP Public Notice #15 Comments at 2-3 (asserts that communities should be allowed to open schools during non-instructional times to provide Internet access for the public); Funds for Learning (FFL) NBP Public Notice #15 Comments at 2-9 (believes that allowing schools the option to open up their networks to the public is good public policy because it allows the full utilization of the E-rate supported broadband and allows community groups to take advantage of the high-speed Internet access); SECA NBP Public Notice #15 Comments at 11 (recommends that schools be given the option to expand the use of their E-rate subsidized computer facilities after hours and allow them to be used as public computing centers; this is one way to leverage E-rate resources and increase broadband access nationwide); WV DOE NBP Public Notice #15 Comments at 6-11 (supports expanding eligible use of Internet access within schools to allow schools to continue their mission of education within the community); National Association of Telecommunications Officers and Advisors (NATOA) NBP Public Notice #15 Reply Comments at 7 (agrees with the strong consensus that facilities should be made available to users other than students and teachers after hours). 27 See 47 U.S.C. § 254. 28 See 47 U.S.C. § 254(b). 29 See 47 C.F.R. § 54.500(b); Schools and Libraries Second Report and Order, 18 FCC Rcd at 9208, paras. 17-18 (defining “educational purposes” for libraries as activities that are integral, immediate, and proximate to the provision of library services to library patrons). 30 See Bureau of Labor Statistics, Unemployment, at 7 (last viewed Jan. 14, 2010). The unemployment rate was 9.8% as of October 2009. Id.; Unemployment Rate, at http://useconomy.about.com/od/economicindicators/p/unemploy_rate.htm (last viewed Feb. 18, 2010). Additionally, for example, in comments submitted by Connected Nation and The National Coalition on Black Civic Federal Communications Commission FCC 10-33 6 paper resumes.31 Thus, community access to Internet services is critical in facilitating job placement, career advancement, and other uses that help to stimulate economic activity.32 Therefore, given these special circumstances, it is appropriate to maximize the use of school facilities and services supported by E-rate funding by allowing communities to utilize these facilities and services, consistent with the conditions described below. 11. In order to reduce the likelihood of waste, fraud, and abuse, and to guard against potential additional costs being imposed on the E-rate program, we set forth certain conditions regarding other uses of school facilities for those schools that choose to allow the community to use their E-rate funded services. First, schools participating in the E-rate program are not permitted to request funding for more services than are necessary for educational purposes. Specifically, although under this waiver schools are permitted to allow use of their facilities by the community during non-operating hours, they shall not seek funding for more services than necessary under the E-rate program to serve their current student population. We do not intend for this waiver to allow schools to request additional capacity to allow for additional uses. Any additional use of the services purchased under the E-rate program must be incidental Participation-Black Women’s Roundtable (Connected Nation and NCBCP-BWR), they report that, in Tennessee and Ohio, children in low-income families, minority families, and single-parents families all report lower-than-average rates of computer ownership and broadband adoption. See Connected Nation and NCBCP-BWR NBP Public Notice # 15 Comments at 5-6; see also comments filed in response to A National Broadband Plan for Our Future, GN Docket Nos. 09-47, 09-51, 09-137, National Broadband Plan Public Notice #16, Comment Sought on Broadband Adoption, DA 09-2403 (rel. Nov. 10, 2009) (NBP Public Notice #16). Specifically, ALA notes that, for families with an income under $25,000, home adoption is about 25 percent; among African-American households, the adoption rate is approximately 45 percent; and among Hispanic households, the adoption rate is approximately 45 percent. ALA NBP Public Notice #16 Comments at 2-3 (citing the Pew Internet & American Life Project, Home Broadband Adoption 2009, at 3-4 (2009), http://www.pewinternet.org/~/media//Files/Reports/2009/Home- Broadband-Adoption-2009.pdf (last viewed Feb. 18, 2010)). Further, Connected Nation (CN)’s research shows that only 47 percent of minorities subscribe to broadband at home compared to 52 percent of non-minority residents. Home broadband adoption among low-income minorities is only 20 percent. In urban areas, where access to broadband facilities is nearly ubiquitous, broadband adoption among minorities is 47 percent compared to 60 percent of non-minorities. In rural areas, 33 percent of minorities subscribe to broadband compared to 40 percent of non-minorities. CN NBP Public Notice #16 Comments at 10-12. Further, the Native Public Media, National Congress of American Indians, Southern California Tribal Chairmen’s Association, and New American Foundation, in response to A National Broadband Plan for Our Future, GN Docket Nos. 09-47, 09-51, 09-137, National Broadband Plan Public Notice #5, Comment Sought on Broadband Deployment and Adoption on Tribal Lands, DA 09-2093 (rel. Sept. 23, 2009) (NBP Public Notice #5), support community use of existing E-rate facilities and services noting that the E-rate program could be used as the basis to provide funding to Tribal anchor institutions to serve as hubs for community adoption of broadband. See Letter to Marlene H. Dortch, Secretary, Federal Communications Commission, from Loris Ann Taylor, Native Public Media; John Crigler and James E. Dunstan, Garvey Schubert Barer; Jacqueline Johnson Pata and Geoffrey C. Blackwell, National Congress of American Indians; Matthew R. Rantanen, Southern California Tribal Chairmen’s Association; and Sascha D. Meinrath and Benjamin Lennett, New America Foundation, Docket Nos. GN Docket Nos. 09-47, 09-51, 09-137 (filed Dec. 24, 2009). 31 See One Economy Corporation National Digital Literacy Initiative NBP Comments at 10 (commenting that those without digital literacy skills will be at a distinct competitive disadvantage in the global marketplace: for instance, 80 percent of all Fortune 500 companies only accept applications online); ALA NBP Public Notice #16 Comments at 5 (stating that libraries are experiencing first-hand the impact of federal and state programs switching to online applications for services, employers requiring resumes sent via email, and more students taking online courses to fit around work schedules); see also Doyle, Alison, Online Employment Applications: Online Job Applications vs. Paper Resumes, http://jobsearch.about.com/od/jobapplications/a/onlineapplicat.htm (last viewed Feb. 18, 2010); How to Apply Online and Get an Employer’s Attention, http://www.jobweb.org/resumesample.aspx?id=868 (last viewed Feb. 18, 2010). 32 See, e.g., Dell NBP Public Notice #15 Comments at 3-4. Federal Communications Commission FCC 10-33 7 to the primary purpose of the E-rate funds.33 Per USAC’s deadline for submission of funding year 2010 FCC Form 471 applications, schools should have timely submitted their funding year 2010 requests to USAC by February 11, 2010.34 Pursuant to the Commission’s Bishop Perry Order, any subsequent changes to such requests by applicants may only be as a result of an error when submitting their original requests and must be received by USAC within 15 days of the date of the FCC Form 471 Receipt Acknowledgement Letter.35 Therefore, the Universal Service Administrative Company (USAC) should ensure that any subsequent changes to a request by an applicant are truly errors and that they are not seeking to add additional capacity to their funding requests to meet the needs of their community. Therefore, there should be minimal chance of fraud and abuse by schools attempting to increase their funding requests simply to serve the public in addition to their students. However, if there is any question regarding whether an increase in a funding request is due to a ministerial or clerical error, we direct USAC to request documentation from the school to demonstrate the necessity for the additional services. We believe that this will help to further reduce the likelihood of fraud and abuse by enabling USAC to efficiently assess whether additional requests are truly associated with ministerial and clerical errors or if such requests are seeking services beyond those necessary for educational purposes. 12. Second, any community usage of E-rate funded services at a school facility is limited to non-operating hours, such as after school hours or during times when the students are out of school. Consistent with the Act, services and equipment supported by E-rate funds must, in the first instance, be used for educational purposes and students shall always get first priority in use of the schools’ resources.36 By limiting use by the community to non-operating hours for schools, we comply with the intent of the Act and guard against abuse by eliminating the possibility that community usage may interfere with usage of services as intended by the Act. We emphasize that schools are not required, pursuant to this order, to open up their facilities for community use. We also leave it to schools to establish their own policies regarding specific use of their services and facilities, including, for example, the hours of use.37 33 See, e.g., WV DOE NBP Public Notice #15 Comments at 10; SECA NBP Public Notice #15 Comments at 15. 34 See USAC Website, Schools and Libraries, FY2010 Application Filing Window Dates Established, at http://www.usac.org/sl/tools/latest-news.aspx#120309 (last viewed Feb. 18, 2010). 35 See Request for Review of the Decision of the Universal Service Administrator by Bishop Perry Middle School, et al., Schools and Libraries Universal Service Support Mechanism, File Nos. SLD-487170, et al., CC Docket No. 02- 6, Order, 21 FCC Rcd 5316, 5326-27, para. 23 (2006) (Bishop Perry Order). USAC issues a FCC Form 471 Receipt Acknowledgment Letter (RAL) to both the applicant and service provider upon successful data entry of the FCC Form 471 application and certification. Applicants should review the RAL and submit allowable corrections to USAC. See USAC website, Schools and Libraries, Submit Application for Support, http://www.usac.org/sl/applicants/step07/default.aspx (last visited Feb. 18, 2010); USAC website, Schools and Libraries, Form 471 Receipt Acknowledgement Letter, http://www.usac.org/sl/applicants/step07/receipt- acknowledgement-letter.aspx (last viewed Feb. 18, 2010). 36 47 U.S.C. § 254 (h)(1)(B). 37 As required by the Children’s Internet Protection Act (CIPA), under current program rules, schools receiving E- rate discounts must certify that they are using “technology protection measures” to block access to inappropriate content by minors. See Consolidated Appropriations Act, 2001, Pub. L. No. 106-554 §§ 1701 et seq. Section 1721 of CIPA amends section 254(h) of the Act. 47 U.S.C § 254(h); 47 C.F.R. §54.520(c)(1)(i) (“The Internet safety policy adopted and enforced pursuant to 47 U.S.C. 254(h) must include a technology protection measure that protects against Internet access by both adults and minors to visual depictions that are obscene, child pornography, or, with respect to use of computers by minors, harmful to minors.”). While supporting community use of E-rate funded facilities and services, AT&T questions whether such filters will continue to be in place for adults using such equipment and who will be responsible for turning the filters off. See AT&T NBP Public Notice #15 Comments at 6. As long as the schools are in compliance with the CIPA requirements, we leave these kinds of matters up to the schools to address as part of their policies. Federal Communications Commission FCC 10-33 8 13. Lastly, consistent with the Act, schools’ discounted services or network capacity may not be “sold, resold, or transferred by such user in consideration for money or any other thing of value.”38 Specifically, schools cannot charge for the use of services and facilities purchased using E-rate funds. 39 We agree with SECA, however, that while schools cannot sell or transfer the use of any E-rate services, network capacity, or facilities, schools should be able to charge reasonable fees to cover overhead costs for using school services and facilities – such as electricity, security, and heating – necessary to maintain the building during such periods of use.40 As noted by commenters, charging reasonable fees will help schools minimize any additional overhead costs.41 Further, organizations using school services and facilities during non-operating hours of the school shall be permitted to charge program participants for their services to recover related costs, such as curriculum development and presentation costs.42 14. Therefore, because we find that special circumstances exist and this waiver is in the public interest, we find good cause, on our own motion, to grant a waiver of sections 54.504(b)(2)(v) and 54.504(c)(1)(vii) of our rules, subject to the conditions provided above. This waiver is limited in that it only extends through the end of funding year 2010 and schools that choose to open their services and facilities supported by E-rate funding to the community must adhere to the forgoing conditions. Schools must continue to submit complete and accurate information to USAC in a timely fashion as part of the application review process and must adhere to the E-rate rules and USAC procedures. In addition, we note that the Commission intends to issue a notice of proposed rulemaking this year seeking comment, among other things, on ways to improve the E-rate program and to better maximize the use of broadband connections funded under the E-rate program. 15. Finally, we emphasize that we are committed to guarding against waste, fraud, and abuse and ensuring that funds disbursed through the E-rate program are used for appropriate purposes. Although we grant a waiver of our rules in this order, to the extent the Commission finds that funds were not used properly, the Commission will require USAC to recover such funds through its normal processes. We emphasize that the Commission retains the discretion to evaluate the uses of monies disbursed through the E-rate program and to determine on a case-by-case basis that waste, fraud, or abuse of program funds occurred and that recovery is warranted. The Commission remains committed to ensuring the integrity of the program and will continue to aggressively pursue instances of waste, fraud, or abuse under the Commission’s procedures and in cooperation with law enforcement agencies. IV. NOTICE OF PROPOSED RULEMAKING 16. As indicated above, consistent with the Act, the Commission requires schools and libraries to certify, among other things, that services obtained through discounts from the E-rate program will be used solely for educational purposes.43 In the Schools and Libraries Second Report and Order, the Commission clarified the meaning of educational purposes as “activities that are integral, immediate, and 38 47 U.S.C. § 254 (h)(3); see also 47 C.F.R. §§ 54.504(b)(2)(v); 54.504(c)(1)(vii). 39 See WV DOE NBP Public Notice #15 Comments at 10; SECA NBP Public Notice #15 Comments at 15. 40 See SECA NBP Public Notice #15 Comments at 14-15. 41 See, e.g., SECA NBP Public Notice #15 Comments at 14-15; WV DOE NBP Public Notice #15 Comments at 6, 9. 42 See SECA NBP Public Notice #15 Comments at 14-15. For example, if an organization offered a digital literacy course to parents or other members of the community using the Internet access purchased using E-rate funds and charged a nominal fee for the course, such fee would be allowed under this waiver. 43 See supra para. 4; 47 U.S.C. § 254 (h)(1)(B); 47 C.F.R. § 54.504(b)(2)(v); 47 C.F.R. § 54.504(c)(1)(vii). Federal Communications Commission FCC 10-33 9 proximate to the education of students, or in the case of libraries, integral, immediate, and proximate to the provision of library services to library patrons.”44 In November 2009, as part of the Commission’s development of a national broadband plan, the Commission sought comment on whether the E-rate program could be modified to allow for the use of broadband facilities at schools by the general community rather than just by students and faculty.45 17. In this NPRM, we specifically seek comment on whether we should revise sections 54.504(b)(2)(v) and 54.504(c)(1)(vii) of our rules to allow schools to use underutilized services and equipment funded under the E-rate program for other, secondary purposes, instead of solely for “educational purposes”as is now required under our rules. Specifically, we propose to revise sections 54.504(b)(2)(v) and 54.504(c)(1)(vii) of our rules to require applicants to certify that “[t]he services the applicant purchases at discounts will be used primarily for educational purposes . . . ” 46 We tentatively conclude that, if we revise sections 54.504(b)(2)(v) and 54.504(c)(1)(vii) of our rules to allow schools to use underutilized services and equipment funded under the E-rate program for other, secondary purposes, consistent with the Act, E-rate funds must, in the first instance, be used for educational purposes and students shall always get first priority in use of the schools’ resources.47 Any additional use of the services purchased under the E-rate program thus must be incidental to the primary purpose of the E-rate funds. 18. We propose these rule revisions for several reasons. As we noted above in our order granting a waiver of our rules requiring that services and facilities supported by E-rate be used solely for educational purposes through the end of funding year 2010, we believe changing these rules will leverage E-rate funds to serve a larger population at no increased cost to the E-rate program.48 Currently, services and facilities purchased using E-rate funding remain unused during evenings, weekends, school holidays, and summer breaks. Moreover, many people lack access or have limited access to affordable Internet services for educational and job training opportunities, particularly, for example, in rural, minority, and Tribal communities. Thus, by opening up these facilities to members of the public to use during non- operating hours, we will maximize the use of facilities and services supported by E-rate funding and increase community access to the Internet. Further, we find that these rule changes are consistent with the goals of universal service by making Internet access available to more members of the general public. We also believe these rule changes are consistent with the use of E-rate funding by libraries. Libraries currently provide access to the Internet to members of the general public as part of their mission. Allowing schools to do the same, at their discretion, would simply provide more opportunities for public access to Internet services. Finally, these rule changes would further the Commission’s directive from Congress to encourage access to advanced telecommunications and information services.49 We also invite comment on whether we should modify our definition of educational purposes.50 Commenters should address whether modification of that definition would accomplish the objectives of maximizing the use of facilities and services supported by E-rate funding and reducing the likelihood of waste, fraud, and abuse. 44 Schools and Libraries Second Report and Order, 18 FCC Rcd at 9208, paras. 17-18; 47 C.F.R. § 54.500(b). 45 See NBP Public Notice #15 at 6. 46 See 47 C.F.R. §§ 54.504(b)(2)(v), 54.504(c)(1)(vii) as adopted herein; Appendix A. 47 47 U.S.C. § 254 (h)(1)(B). 48 See supra paras. 7-10. 49 See 47 U.S.C. § 254(b). 50 47 C.F.R. § 54.500(b). Federal Communications Commission FCC 10-33 10 19. In granting the waiver above, in order to reduce the likelihood of waste, fraud, and abuse, and to guard against potential additional costs being imposed on the E-rate program, we set forth certain conditions regarding other uses of school facilities that choose to allow the community to use their E-rate funded services.51 The conditions are that : (1) schools participating in the E-rate program are not permitted to request funding for more services than are necessary for educational purposes; (2) any community usage of E-rate funded services at a school facility is limited to non-operating hours, such as after school hours or during times in which the school is not open; and (3) consistent with the Act, a school’s discounted services or network capacity may not be “sold, resold, or transferred by such user in consideration for money or any other thing of value.”52 If we revise our rules, we tentatively conclude that we would continue to impose these conditions. We seek comment on that conclusion. Furthermore, we seek comment on whether there are any additional conditions to guard against waste, fraud, and abuse that we should impose on schools that allow community use of their E-rate funded services and equipment. For example, should the Commission require additional certifications to ensure that applicants do not request extra capacity to serve the general public? Lastly, we seek comment on any practical or operational implications such a change in our rules would have on schools and the community at large. V. PROCEDURAL MATTERS A. Initial Paperwork Reduction Act Analysis 20. This notice of proposed rulemaking does not contain proposed information collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified “information collection burden for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). B. Initial Regulatory Flexibility Analysis 21. As required by the Regulatory Flexibility Act of 1980, as amended,53 the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) for this notice of proposed rulemaking (NPRM), of the possible significant economic impact on a substantial number of small entities by the rules proposed in this NPRM. The IRFA is found in appendix B. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.54 In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register.55 C. Ex Parte Presentations 22. These matters shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission’s ex parte rules.56 Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substance of the presentations and not merely a listing of the subjects discussed. More than a one or two sentence description of the views and 51 See supra paras. 11-13. 52 Id.; 47 U.S.C. § 254 (h)(3). 53 5 U.S.C. § 603. 54 See 5 U.S.C. § 603(a). 55 Id. 56 47 C.F.R. §§ 1.1200-1.1216.