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                                                           Before the
               Federal Communications Commission
                     Washington, DC  20554

In the Matter of                   )
                                   )
Request for Review of the          )
Decision of the                    )
Universal Service Administrator by )
                                   )
Clackamas Education Service District    )    File No. SLD-147541
Marylhurst, Oregon                 )
                                   )
Federal-State Joint Board on       )    CC Docket No. 96-45
Universal Service                  )
                                   )
Changes to the Board of Directors of the     )    CC Docket No. 97-21
National Exchange Carrier Association, Inc.  )

                             order

Adopted:  September 26, 2001            Released:  September 27, 2001
           

Before the Common Carrier Bureau:

1.     The Common Carrier Bureau has under consideration a Request for Review filed by
Clackamas Education Service District (Clackamas), Marylhurst, Oregon.  Clackamas requests
review of a decision by the Schools and Libraries Division (SLD) of the Universal Service
Administrative Company (USAC) to deny Clackamas' application for discounted services under
the schools and libraries universal service support mechanism.  For the reasons set forth below,
we remand Clackamus' application to SLD for further review.
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 its
technological needs and the services for which it seeks discounts.  Once the applicant has
complied with the Commission's competitive bidding requirements and entered an agreement for
eligible services, it must file a FCC Form 471 application to notify the Administrator of the
services that have been ordered, the carrier with whom its has entered an agreement, and an
estimate of funds needed to cover the discounts to be given for eligible services.  Approval of
the application is contingent upon the filing of a FCC Form 471, and funding commitment
decisions are based on information provided by the applicant.
3.     On the FCC Form 471, applicants must certify, among other things, that the schools
and libraries they represent have secured access "to all of the resources   necessary to make
effective use of the services purchased" and that they have authority to submit the request on
behalf of the entities included in the application.  Review of the applicant's certifications by
SLD is an important part of SLD's responsibility for reviewing funding applications to ensure
compliance with statutory requirements and Commission rules.  Section 254(h)(1)(B) of the Act
limits discounts to services provided in response to bona fide requests made for services to be
used for educational purposes.  The certification requirement helps achieve compliance with
section 254(h)(1)(B) by ensuring that requests for discounted services are, in fact, bona fide
requests.  In addition, SLD's review of applicants' certifications is an important means by which
SLD curbs waste, fraud, and abuse in the schools and libraries universal service support
mechanism.
4.     Clackamas filed seven applications as a consortium seeking discounts under the
schools and libraries universal service support mechanism for Funding Year 3.  Clackamas
provided to SLD documentation describing its consortium structure.  These documents showed
that Clackamas hosted a statewide program called the Oregon Public Education Network
(OPEN). OPEN consists of Technical (Tech) Centers that provide connectivity to the schools and
school districts. Clackamas explained that it supported the Tech Centers, and the Tech Centers in
turn serve the districts and the schools.
5.     SLD contacted individual schools within the consortium to verify that they were
aware that Clackamas was filing an E-rate application on the schools' behalf.  SLD determined
that at least one school listed as a member of the consortium was unaware that an application for
discounts under the universal service mechanism for schools and libraries had been submitted on
its behalf.  SLD then contacted Clackamas by phone and asked Clackamas to provide letters of
agency for each school district for which it was requesting funding.  Clackamas asked SLD if it
could provide letters of agency from the Technical Centers that served the school district.  SLD
did not respond to this inquiry.  Finding that Clackamas did not have permission to act on
behalf of entities listed in the consortium application, SLD determined that Clackamas did not
qualify for funding, and accordingly, by letter dated March 9, 2000, SLD denied funding for each
of Clackamas' applications. 
6.     Clackamas then filed an appeal with SLD on April 6, 2000.  In its appeal,
Clackamas again explained its consortium structure.  Clackamas stated that it supports the
Technical Centers, and the Technical Centers in turn serve the districts and the schools. 
Clackamas stated that it did not directly serve the schools for which SLD sought letters of
agency.  By letter dated, September 15, 2000, SLD denied Clackamas' appeal.  SLD explained
that the applicant certifies on the FCC Form 471 that the entities it represents have secured
access to adequate resources to make effective uses of the discounts.  SLD further explained
that it is the responsibility of the applicant to provide documentation to support that certification,
if requested.   In response, Clackamas filed the instant Request for Review with the
Commission. 
7.     We have reviewed the record before us.  Initially, we note that in requiring Clackamas
to submit letters of agency for consortium members, SLD was acting within its authority to
implement procedures to ensure compliance with Commission rules and regulations.  
However, we find that Clackamas' application involved a complex multi-tier consortium.  Upon
determining that at least one school within the consortium was unaware that an application had
been filed on its behalf, SLD denied funding to every member of the consortium. We are
cognizant of the need for SLD to establish efficient procedures to ensure that applicants comply
with our rules and SLD's procedures.  In this case, however, because of the complexity of the
multi-tiered consortium, we conclude that a more thorough examination of the Clackamas
application is warranted.  SLD may find, upon review of the letters of agency from the Tech
Centers, and additional information from the school, that the school districts have properly given
authority to the Tech Centers to act on the school's behalf, and that the Tech Centers exercised
that authority by participating in the OPEN consortium.  Because SLD did not respond to
Clackamas' request to provide letters of agency from the Tech Centers, the record is insufficient
to determine whether Clackamus, through the Tech Centers, had actual authority to act on behalf
of the school districts listed in the consortium.  We, therefore, remand Clackamas' application to
SLD for further fact-finding.  However, we make no determination has to whether any members
of the consortium are ultimately entitled to discounts.
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 Request for Review filed by Clackamas Education Service District, Marylhurst, Oregon,
on October 13, 2000, IS REMANDED to SLD for further review consistent with this opinion.
                              
                              FEDERAL COMMUNICATIONS COMMISSION



                              Carol E. Mattey
                              Deputy Chief, Common Carrier Bureau