Copyright© 2004 by School Services of California, Inc.
Volume 17 For Publication Date: December 17, 2004 No. 24
The good news for the California
Teleconnect Fund (CTF) is that SB 1276 was passed by the Legislature and signed
by the Governor on September 28, 2004 (Chapter 547/2004). This bill restored the
approximately $18 million in program funding that had been removed from the
final 2004-05 Budget. However, two other actions will limit discounts and
require additional administrative compliance for CTF participants.
SB 1102 (Chapter 237/2004), a
trailer bill of the 2004-05 Budget Act, requires that CTF discounts be applied
to eligible services only after reducing those costs for E-rate discounts. For
example, $100 worth of eligible services with an E-rate discount of 70% and a
CTF discount of 50% would have the CTF discount applied to $30 (after the
application of the E-rate discount), for a net discount of $15. Therefore, in
the example, a CTF discount that was previously potentially worth $50 would now
generate only $15 in discounts.
The particularly troublesome
provision of the new law is the requirement that the applicable E‑rate
discount for eligible districts be applied prior to the CTF discount, regardless
of whether a district is participating in the E-rate program. Therefore, to
participate in the CTF program, E‑rate-eligible districts must submit to
the California Public Utilities Commission (CPUC) either their actual E-rate
information, if they are receiving E-rate discounts, or, if not participating in
the E-rate program, the information needed by the CPUC to calculate the
E‑rate discount to which the district would otherwise be entitled.
Further, to participate in the CTF program, districts will be required to
provide updated E-rate information annually. The new requirements become
effective January 1, 2006, and wil apply to CTF discounts after that date.
The second item affecting CTF
participants is CPUC Resolution T-16763. This item authorizes telecommunications
providers to suspend CTF discounts for districts that are also receiving
E‑rate discounts if those districts do not provide E-rate information
within 75 days of filing E‑rate Form 486 (Receipt of Service Confirmation)
with the Universal Service Administrative Corporation’s (USAC) Schools and
Libraries Division (SLD). It appears that, under this requirement, E-rate
participants will need to inform CTF service providers of the specific lines,
services, and discount levels they are receiving through the E-rate program. For
CTF participants receiving E-rate discounts for services beginning July 1, 2004,
the Form 486 should have been filed by October 28, 2004. Therefore, the E-rate
information must be provided to the CTF telecommunications providers within 75
days of October 28, 2004, or by January 12, 2005.
So, with the legislative and administrative changes, CTF discounts available to districts will be lower and administrative requirements to keep those discounts will be greater.
—Robert Miyashiro and Jerry Twomey, CPA