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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

Anderson School
Staatsburg, New York

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-133664


CC Docket No. 96-45


CC Docket No. 97-21



                             ORDER
Adopted:   November 21, 2000            Released:  November 24, 2000
By the Common Carrier Bureau:
1.     The Bureau has under consideration a request for review filed by the Anderson School
(Anderson), Staatsburg, New York on May 30, 2000.  Anderson seeks review of a funding
commitment decision issued by the Schools and Libraries Division (SLD) of the Universal Service
Administrative Company (Administrator) pursuant to a funding request for internal connections. 
For the reasons set forth below, we deny Anderson'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 Anderson's Funding Year 2 application
for discounted internal connections, Funding Request Number (FRN) 198586.  In its FCC Form
471, filed on March 17, 1999, Anderson sought support in a single funding request for internal
connections services or products which it valued at $1,083,559 for 28 of its campus buildings. 
SLD denied Anderson's funding request, concluding that the funding request included internal
connections valued at $658,852 for 21 ineligible residential dormitory buildings.
4.     Anderson filed an appeal with SLD on January 5, 2000, claiming that Anderson
School is a large, single campus not traversed by a public right of way, and, therefore, the services
purchased are wholly eligible under the rules.  In response, SLD affirmed its decision, stating that
a significant portion of the funding request includes a request for wiring and equipment in dorm
facilities that are ineligible to receive funding based on program rules.
5.     Anderson filed the instant appeal with the Commission on May 30, 2000. In this
appeal, Anderson claims that the classification of these facilities as "dorms" is faulty and that these
"[f]acilities will include a study center whereby students can complete homework assignments and
have access to the internet for research, and other educational explorations with resident
counselors who are available to assist the individual students with homework and give learning
assistance."  Anderson further argues that the fact that these facilities additionally contain dorm
facilities or other non-classroom facilities is irrelevant to a funding decision.
6.     Although Anderson contends that its buildings containing residential dormitories also
will contain "study centers," we find no basis upon which to grant Anderson's appeal.  These
study centers are not traditional classrooms or computer learning centers, but will be used for
homework and research with assistence from residential counselors. The Commission has found
that a given service is eligible for support as a component of the institution's internal connections
only if it is necessary to "transport information all the way to the individual classroom."  The
Commission stated in its Fourth Order on Reconsideration that this focus on access to
classrooms followed from the conclusion that "Congress intended that telecommunications and
other services be provided directly to classrooms."  The Commission clarified its position that
discounts are not available for internal connections in non-instructional buildings unless those
internal connections are essential for the effective transport of information to an instructional
building or library.  
7.     Based on our review of the record before us, Anderson's classrooms are contained in
buildings physically separated from the 21 residential dormitory buildings, and the internal
connections to the residential dormitory buildings are not necessary for the effective transport of
information to Anderson's classrooms. The record shows that the seven non-residential buildings
on the Anderson School campus provide traditional classrooms and computer learning centers. 
Consistent with Commission precedent, we conclude that Anderson requested funding for
ineligible services when it sought discounts on internal connections in the 21 residential
dormitories.  
8.     Moreover, we uphold SLD's decision to deny Anderson's funding request in its
entirety because 60 percent of that request was for ineligible services.  If more than 30 percent of
the request is for funding of ineligible services, SLD ordinarily denies an application in its
entirety.   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.  The program's rules state repeatedly that universal service
funds support only eligible services.  Anderson should have been aware that it was seeking discounts
for ineligible internal connections.  We conclude SLD appropriately applied its 30 percent policy based
upon the facts of this case.
9.     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 May 30, 2000, by Anderson School, Staatsburg, New York, IS
DENIED.

                         FEDERAL COMMUNICATIONS COMMISSION



                              Carol E. Mattey 
                           Deputy Chief, Common Carrier Bureau