[Code of Federal Regulations]
[Title 47, Volume 3]
[Revised as of October 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 47CFR54.504]

[Page 137-140]
 
                       TITLE 47--TELECOMMUNICATION
 
        CHAPTER I--FEDERAL COMMUNICATIONS COMMISSION (CONTINUED)
 
PART 54_UNIVERSAL SERVICE--Table of Contents
 
      Subpart F_Universal Service Support for Schools and Libraries
 
Sec. 54.504  Requests for services.

    (a) Competitive bid requirements. Except as provided in Sec. 
54.511(c), an eligible school, library, or consortium that includes an 
eligible school or library shall seek competitive bids, pursuant to the 
requirements established in this subpart, for all services eligible for 
support under Sec. Sec. 54.502 and 54.503. These competitive bid 
requirements apply in addition to state and local competitive bid 
requirements and are not intended to preempt such state or local 
requirements.
    (b) Posting of FCC Form 470. (1) An eligible school, library, or 
consortium that includes an eligible school or library seeking to 
receive discounts for eligible services under this subpart, shall submit 
a completed FCC Form 470 to the Administrator. FCC Form 470 shall 
include, at a minimum, the following information, to the extent 
applicable with respect to the services requested:
    (i) The computer equipment currently available or budgeted for 
purchase for the current, next, or other future academic years, as well 
as whether the computers have modems and, if so, what speed modems;
    (ii) The internal connections, if any, that the school or library 
has in place or has budgeted to install in the current, next, or future 
academic years, or any specific plans for an organized voluntary effort 
to connect the classrooms;
    (iii) The computer software necessary to communicate with other 
computers over an internal network and over the public 
telecommunications network currently available or budgeted for purchase 
for the current, next, or future academic years;
    (iv) The experience of, and training received by, the relevant staff 
in the use of the equipment to be connected to the telecommunications 
network and training programs for which funds are committed for the 
current, next, or future academic years;
    (v) Existing or budgeted maintenance contracts to maintain 
computers; and
    (vi) The capacity of the school's or library's electrical system in 
terms of how many computers can be operated simultaneously without 
creating a fire hazard.
    (2) FCC Form 470 shall be signed by the person authorized to order 
telecommunications and other supported services for the eligible school, 
library, or consortium and shall include that person's certification 
under oath that:
    (i) The schools meet the statutory definition of elementary and 
secondary schools found under section 254(h) of the Act, as amended in 
the No Child

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Left Behind Act of 2001, 20 U.S.C. 7801(18) and (38), do not operate as 
for-profit businesses, and do not have endowments exceeding $50 million;
    (ii) The libraries or library consortia eligible for assistance from 
a State library administrative agency under the Library Services and 
Technology Act of 1996 do not operate as for-profit businesses and whose 
budgets are completely separate from any school (including, but not 
limited to, elementary and secondary schools, colleges, and 
universities).
    (iii) All of the individual schools, libraries, and library 
consortia receiving services are covered by:
    (A) Individual technology plans for using the services requested in 
the application; and/or
    (B) Higher-level technology plans for using the services requested 
in the application; or
    (C) No technology plan needed because application requests basic 
local and/or long distance service and/or voicemail only.
    (iv) The technology plan(s) has/have been approved by a state or 
other authorized body; the technology plan(s) will be approved by a 
state or other authorized body; or no technology plan needed because 
applicant is applying for basic local, cellular, PCS, and/or long 
distance telephone service and/or voicemail only.
    (v) The services the applicant purchases at discounts will be used 
solely for educational purposes and will not be sold, resold, or 
transferred in consideration for money or any other thing of value.
    (vi) Support under this support mechanism is conditional upon the 
school(s) and library(ies) securing access to all of the resources, 
including computers, training, software, maintenance, internal 
connections, and electrical connections necessary to use the services 
purchased effectively.
    (vii) All bids submitted will be carefully considered and the bid 
selected will be for the most cost-effective service or equipment 
offering, with price being the primary factor, and will be the most 
cost-effective means of meeting educational needs and technology plan 
goals.
    (3) The Administrator shall post each FCC Form 470 that it receives 
from an eligible school, library, or consortium that includes an 
eligible school or library on its website designated for this purpose.
    (4) After posting on the Administrator's website an eligible 
school's, library's, or consortium's FCC Form 470, the Administrator 
shall send confirmation of the posting to the entity requesting service. 
That entity shall then wait at least four weeks from the date on which 
its description of services is posted on the Administrator's website 
before making commitments with the selected providers of services. The 
confirmation from the Administrator shall include the date after which 
the requestor may sign a contract with its chosen provider(s).
    (c) Filing of FCC Form 471. An eligible school, library, or 
consortium that includes an eligible school or library seeking to 
receive discounts for eligible services under this subpart, shall, upon 
signing a contract for eligible services, submit a completed FCC Form 
471 to the Administrator. A commitment of support is contingent upon the 
filing of FCC Form 471.
    (1) FCC Form 471 shall be signed by the person authorized to order 
telecommunications and other supported services for the eligible school, 
library, or consortium and shall include that person's certification 
under oath that:
    (i) The schools meet the statutory definition of elementary and 
secondary schools found under section 254(h) of the Act, as amended in 
the No Child Left Behind Act of 2001, 20 U.S.C. 7801(18) and (38), do 
not operate as for-profit businesses, and do not have endowments 
exceeding $50 million.
    (ii) The libraries or library consortia eligible for assistance from 
a State library administrative agency under the Library Services and 
Technology Act of 1996 do not operate as for-profit businesses and whose 
budgets are completely separate from any school (including, but not 
limited to, elementary and secondary schools, colleges, and 
universities).
    (iii) The entities listed on the FCC Form 471 application have 
secured access to all of the resources, including

[[Page 139]]

computers, training, software, maintenance, internal connections, and 
electrical connections, necessary to make effective use of the services 
purchased, as well as to pay the discounted charges for eligible 
services from funds to which access has been secured in the current 
funding year. The billed entity will pay the non-discount portion of the 
cost of the goods and services to the service provider(s).
    (iv) All of the schools and libraries listed on the FCC Form 471 
application are covered by:
    (A) An individual technology plan for using the services requested 
in the application; and/or
    (B) Higher-level technology plan(s) for using the services requested 
in the FCC Form 471 application; or
    (C) No technology plan needed; applying for basic local and long 
distance telephone service only.
    (v) Status of technology plan(s) has/have been approved; will be 
approved by a state or other authorized body; or no technology plan is 
needed because applicant is applying for basic local, cellular, PCS, 
and/or long distance telephone service and/or voicemail only.
    (vi) The entities listed on the FCC Form 471 application have 
complied with all applicable state and local laws regarding procurement 
of services for which support is being sought.
    (vii) The services the applicant purchases at discounts will be used 
solely for educational purposes and will not be sold, resold, or 
transferred in consideration for money or any other thing of value.
    (viii) The entities listed in the application have complied with all 
program rules and acknowledge that failure to do so may result in denial 
of discount funding and/or recovery of funding.
    (ix) The applicant understands that the discount level used for 
shared services is conditional, for future years, upon ensuring that the 
most disadvantaged schools and libraries that are treated as sharing in 
the service, receive an appropriate share of benefits from those 
services.
    (x) The applicant recognizes that it may be audited pursuant to its 
application, that it will retain for five years any and all worksheets 
and other records relied upon to fill out its application, and that, if 
audited, it will make such records available to the Administrator.
    (xi) All bids submitted were carefully considered and the most cost-
effective bid for services or equipment was selected, with price being 
the primary factor considered, and is the most cost-effective means of 
meeting educational needs and technology plan goals.
    (2)[Reserved]
    (d) Mixed eligibility requests. If 30 percent or more of a request 
for discounts made in an FCC Form 471 is for ineligible services, the 
request shall be denied in its entirety.
    (e) Rate disputes. Schools, libraries, and consortia including those 
entities, and service providers may have recourse to the Commission, 
regarding interstate rates, and to state commissions, regarding 
intrastate rates, if they reasonably believe that the lowest 
corresponding price is unfairly high or low.
    (1) Schools, libraries, and consortia including those entities may 
request lower rates if the rate offered by the carrier does not 
represent the lowest corresponding price.
    (2) Service providers may request higher rates if they can show that 
the lowest corresponding price is not compensatory, because the relevant 
school, library, or consortium including those entities is not similarly 
situated to and subscribing to a similar set of services to the customer 
paying the lowest corresponding price.
    (f) Service substitution. (1) The Administrator shall grant a 
request by an applicant to substitute a service or product for one 
identified on its FCC Form 471 where:
    (i) The service or product has the same functionality;
    (ii) The substitution does not violate any contract provisions or 
state or local procurement laws;
    (iii) The substitution does not result in an increase in the 
percentage of ineligible services or functions; and
    (iv) The applicant certifies that the requested change is within the 
scope of the controlling FCC Form 470, including any associated Requests 
for Proposal, for the original services.

[[Page 140]]

    (2) In the event that a service substitution results in a change in 
the pre-discount price for the supported service, support shall be based 
on the lower of either the pre-discount price of the service for which 
support was originally requested or the pre-discount price of the new, 
substituted service.
    (3) For purposes of this rule, the broad categories of eligible 
services (telecommunications service, Internet access, and internal 
connections) are not deemed to have the same functionality with one 
another.
    (g) Mixed eligibility services. A request for discounts for a 
product or service that includes both eligible and ineligible components 
must allocate the cost of the contract to eligible and ineligible 
components.
    (1) Ineligible components. If a product or service contains 
ineligible components, costs must be allocated to the extent that a 
clear delineation can be made between the eligible and ineligible 
components. The delineation must have a tangible basis, and the price 
for the eligible portion must be the most cost-effective means of 
receiving the eligible service.
    (2) Ancillary ineligible components. If a product or service 
contains ineligible components that are ancillary to the eligible 
components, and the product or service is the most cost-effective means 
of receiving the eligible component functionality, without regard to the 
value of the ineligible component, costs need not be allocated between 
the eligible and ineligible components. Discounts shall be provided on 
the full cost of the product or service. An ineligible component is 
``ancillary'' if a price for the ineligible component cannot be 
determined separately and independently from the price of the eligible 
components, and the specific package remains the most cost-effective 
means of receiving the eligible services, without regard to the value of 
the ineligible functionality.
    (3) The Administrator shall utilize the cost allocation requirements 
of this subparagraph in evaluating mixed eligibility requests under 
Sec. 54.504(d)(1).
    (h) Filing of FCC Form 473. All service providers eligible to 
provide telecommunications and other supported services under this 
subpart shall submit annually a completed FCC Form 473 to the 
Administrator. FCC Form 473 shall be signed by an authorized person and 
shall include that person's certification under oath that:
    (1) The prices in any offer that this service provider makes 
pursuant to the schools and libraries universal service support program 
have been arrived at independently, without, for the purpose of 
restricting competition, any consultation, communication, or agreement 
with any other offeror or competitor relating to those prices, the 
intention to submit an offer, or the methods or factors used to 
calculate the prices offered;
    (2) The prices in any offer that this service provider makes 
pursuant to the schools and libraries universal service support program 
will not be knowingly disclosed by this service provider, directly or 
indirectly, to any other offeror or competitor before bid opening (in 
the case of a sealed bid solicitation) or contract award (in the case of 
a negotiated solicitation) unless otherwise required by law; and
    (3) No attempt will be made by this service provider to induce any 
other concern to submit or not to submit an offer for the purpose of 
restricting competition.

[62 FR 32948, June 17, 1997, as amended at 62 FR 41304, Aug. 1, 1997; 63 
FR 2129, Jan. 13, 1998; 63 FR 70572, Dec. 21, 1998; 68 FR 36942, June 
20, 2003; 69 FR 6190, Feb. 10, 2004, 69 FR 55109, Sept. 13, 2004; 69 FR 
59145, Oct. 4, 2004]