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                           Before the
               Federal Communications Commission
                     Washington, D.C. 20554



In the Matter of

Request for Review of the
Decision of the
Universal Service Administrator by

Ubly Community Schools
Ubly, Michigan

Federal-State Joint Board on
Universal Service

Changes to the Board of Directors of the
National Exchange Carrier Association, Inc.
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File No. SLD-113262


CC Docket No. 96-45


CC Docket No. 97-21



                             ORDER

   Adopted:  July 7, 2000               Released: July 10, 2000

Before the Common Carrier Bureau:

     1.   The Bureau has under consideration a Letter of Appeal filed by the Ubly
Community Schools (Ubly), Ubly, Michigan on February 28, 2000.  Ubly seeks review of a
funding commitment decision issued by the Schools and Libraries Division (SLD) of the Universal
Service Company (Administrator) pursuant to a funding request for internal connection services.
For the reasons set forth below, we deny Ubly's appeal.

2.        Under the schools and libraries universal service support mechanism, eligible
schools, libraries, and consortia that include eligible schools and libraries, may apply for
discounts for eligible telecommunications services, Internet access, and internal connections.  In
order to receive discounts on eligible services, the Commission's rules require that the applicant
submit to the Administrator a completed FCC Form 470, in which the applicant sets forth the
school's technological needs and the services for which it seeks discounts.  Once the school has
complied with the Commission's competitive bidding requirements and signed a contract for
eligible services, it must file an FCC Form 471 application to notify the Administrator of the
services that have been ordered, the carrier with whom the school has signed the contract, and an
estimate of funds needed to cover the discounts to be given for eligible services.  This
information is generally provided in Block 5 of FCC Form 471.  Among other information,
Block 5 requires the applicant to indicate services requested, the name of the service provider,
the type of service or product for which support is sought, and the estimated total annual pre-
discount cost.  Using information provided by the applicant in its FCC Form 471, the
Administrator determines the amount of discounts for which the school is eligible.  Approval of
the application is contingent upon the filing of FCC Form 471, and funding commitment
decisions are based on information provided by the school or library in this form.
     3.   The instant appeal arises from SLD's denial of Ubly's Year 2 application for
discounted internal connections, Funding Request Number (FRN) 167256, on the grounds that a
significant portion of Ubly's funding request included products ineligible for discounts.  In its FCC
Form 471, filed on March 18, 1999, Ubly sought support in a single funding request for internal
connections services or products which it valued at $36,167.63 and which were to be provided by
Hi-Tech System Service, Inc.  On March 19, 1999, Ubly filed with SLD a Pre-Discount Cost
Calculation Worksheet which indicated that Hi-Tech System Service was providing three different
services in the internal connections funding request: 1) computer lab wiring ($6,452); 2) a Novel
network server ($14,586); and 3) a CD-Net server ($15,127).  On July 8, 1999, SLD denied
funding for the requested internal connections, stating that a significant portion of FRN 167256
included ineligible products, such as the CD-Net server and certain software. 

     4.   Ubly filed an appeal with SLD on July 22, 1999, claiming that it believed that it
could include, in a single funding request, multiple services from one vendor, and then depict a
breakdown of the services in the Pre-Discount Cost Calculation Worksheet.  Along with its appeal,
Ubly filed a new FCC Form 471 which divided into three separate requests the three internal
connection services   the computer lab wiring, the Novell network server, and the CD-Net server  
that Ubly sought to purchase from Hi-Tech System Service.  SLD denied Ubly's appeal on
January 31, 2000, explaining that, "[n]o additional funding requests could be created beyond those
included on the original 471."  

       5. Ubly filed the instant appeal with the Commission on February 28, 2000. 
       In this appeal, Ubly claims that a SLD representative instructed it to file all three Hi-
       Tech System Service requests in a single funding request, and break out the services
       separately in a Pre-Discount Cost Calculation Worksheet.  Ubly also states that it was
       unaware that the CD-Net server was ineligible for funding, and it had included the
       request for the server's funding with the other requests at SLD's urging.  To remedy
       this predicament, Ubly requests that the Commission allow it to divide FRN 167256
       into three separate requests, as described above.  Ubly indicates that it expects to
       receive funding for only the two new funding requests related to computer lab wiring
       and the Novell server, but not for the CD-Net server.

6.   We find no basis upon which to grant Ubly's appeal.  In the instant appeal, Ubly
requests relief on the grounds that it was not aware that CD-Net servers were ineligible for support
and that SLD provided incorrect information on how to structure its application.  Ubly, however,
should have been aware that it was seeking discounts for ineligible services.  The program's rules
state repeatedly that universal service funds support only eligible services.  SLD's web site
contains a list of eligible services, including a section on the servers that are eligible for discount,
and information tips on how to file an application.  Included in such information is a notation that
applications containing ineligible services will be denied funding.   As to Ubly's assertion that it
received misleading information from SLD, we find that such statements are insufficient to exempt
Ubly from having to comply with our policies regarding ineligible services.  We note that rules
and policies are enforced, even where a party has received erroneous advice from a government
employee, and the Commission is not estopped from enforcing its rules in a manner that is
inconsistent with the advice provided by the employee, particularly when the relief requested
would be contrary to an applicable statute or rule.  In light of the thousands of applications that
SLD reviews and processes each funding year, it is administratively necessary to place on the
applicant the responsibility of understanding all relevant program rules and procedures.  Ubly's
misunderstanding of program rules provides no basis for deviating from the Commission's policy
of placing on the applicant the responsibility for understanding program rules and procedures. 

7.   We also decline to grant Ubly's request that the Commission allow it to correct its
FCC Form 471 by dividing a single funding request (FRN 167256) into three separate funding
requests.  With this request, Ubly intends to locate a costly ineligible service (the CD-Net server)
in one of the new funding requests and concomitantly reduce the percentage of ineligible services in
the two remaining funding requests, thereby rendering them potentially eligible for funding.  Ubly's
requested relief, however, contravenes SLD's policy that applicants shall not be permitted to amend
completed Form 471s to remove ineligible service requests after the closure of the filing window
deadline.  If applicants were permitted to make such corrections, SLD would face significant
additional administrative burdens.  Therefore, we cannot permit Ubly to amend its FCC Form 471.

     8.   ACCORDINGLY, IT IS ORDERED, pursuant to authority delegated under
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 Letter of Appeal filed February 28, 2000, by Ubly Community Schools, Ubly,
Michigan, IS DENIED.

                              FEDERAL COMMUNICATIONS COMMISSION




                              Carol E. Mattey
                              Deputy Chief, Common Carrier Bureau