What Happened
The FCC’s Wireline Competition Bureau has denied both the appeal and waiver request filed by Child Development Resources of Ventura County, Inc. (CDR) related to an Emergency Connectivity Fund (ECF) application for Wi‑Fi hotspots.
CDR had sought reimbursement for 1,502 hotspots at $249.99 each, plus 12 months of service, intended for pre‑K students and staff in its Head Start centers.
USAC initially committed the funding but later denied the service provider’s reimbursement invoices and rejected CDR’s appeal; CDR then asked the FCC to review and waive the rules, which the Bureau declined to do.
Why the FCC Denied the Request
1. Hotspots Were Never Used
CDR acknowledged that the hotspots were received without any mobile service activated, meaning the devices were never actually used by students or staff.
ECF rules expressly prohibit applicants and service providers from requesting reimbursement for equipment or services that are not being used, so seeking support for unused hotspots violated sections 54.1711(a)(1)(viii) and 54.1711(a)(2)(vi).
2. Price Was Not Shown to Be Reasonable
CDR requested $249.99 per hotspot but did not provide documentation showing that this amount reflected the actual or reasonable market cost.
The Bureau pointed out that the average ECF‑funded hotspot price in Windows 1 and 2 was $107.80, and that the particular hotspot model (Alcatel LinkZone 2) carried a manufacturer’s suggested retail price of $90 in June 2020—roughly one‑third of the requested amount.
Simply citing supply‑chain issues and submitting an invoice was not enough; the FCC emphasized that applicants must be prepared to explain and support their pricing choices with concrete evidence, such as contemporaneous quotes or market research.
3. Unmet Need and 1:1 Initiative Concerns
ECF support is available only to address actual unmet need—students and eligible staff who lack adequate devices or broadband to participate in remote learning.
CDR requested 1,502 hotspots for approximately 1,294 pre‑K students and 208 staff, which looked like a 1:1 initiative without proof that each recipient lacked sufficient connectivity.
CDR referenced informal family surveys, but did not provide detailed data or methodology showing how unmet need was determined at the time of the funding and reimbursement requests.
The “updated deployment plan” submitted with the FCC appeal contemplated future surveys and distribution, beyond the June 30, 2024 ECF sunset date, indicating unmet need had not been properly established during the program’s allowable period.
4. Ineligible Staff Included
The staff list CDR discussed with USAC included non‑teaching personnel, such as classroom aides, site supervisors, and health & nutrition coordinators, as potential hotspot recipients.
Under ECF rules, only school staff who provide educational services to students (e.g., teachers and para‑professionals) and who themselves have unmet need are eligible to receive ECF‑funded equipment and services.
Why the Waiver Was Also Denied
CDR argued that the denial of funds would harm vulnerable children and families and that its purchases represented good‑faith efforts during a public health emergency and supply‑chain disruptions.
The Bureau reaffirmed longstanding FCC precedent that general financial hardship or negative impact on students does not, by itself, constitute “special circumstances” required to waive the rules.
The FCC also stressed that it is not in the public interest to waive rules where there is evidence of waste—here, reimbursement requests for equipment that was never used.
Because CDR did not demonstrate special circumstances or compliance with core ECF requirements, the waiver request was denied.
Practical Takeaways for Our Clients
This decision offers clear compliance lessons for all ECF (and similar program) participants:
- Only request reimbursement for equipment and services that are actually deployed and in use by eligible students and staff during the relevant funding period.
- Document unmet need up front with clear surveys or other records that can be shared on request; informal or after‑the‑fact plans are not sufficient.
- Do not treat ECF as a blanket 1:1 device or hotspot program; support is limited to individuals who lack adequate connectivity or devices.
- Be ready to justify pricing as reasonable with contemporaneous documentation, including quotes, market comparisons, and product pricing information.
- Limit staff recipients to those who provide educational services to students and who themselves have unmet need, not all employees.
ECF Compliance Checklist (Hotspots & Devices): Are You Audit‑Ready?
Use this to review past ECF funding and to guide similar programs going forward.
1. Usage and Deployment
- Equipment tied to ECF funding is documented as distributed and in active use (logs, sign‑out sheets, asset records).
- No reimbursement was requested for devices that were never activated or connected to service.
- Any inventory on hand at the time of invoicing was excluded from reimbursement requests.
2. Unmet Need Documentation
- Written process exists for determining unmet need (survey, intake form, tech needs assessment).
- Completed surveys or records show which students/staff lacked adequate home broadband or devices at the time of service.
- ECF quantities requested do not exceed the number of individuals with documented unmet need.
- Needs assessments were conducted during the ECF funding period, not planned only for the future.
3. 1:1 Initiatives and Quantities
- If you operate a 1:1 program, ECF was only used for those without adequate existing access, not for all students.
- Funding requests can be mapped to specific students/staff and their unmet need, not just enrollment totals.
- Documentation distinguishes between general 1:1 initiatives and ECF‑supported, need‑based allocations.
4. Eligible Staff Only
- List of staff recipients is limited to those providing educational services (teachers, para‑professionals, instructional staff).
- Non‑instructional staff (administrative, supervisory, health, nutrition, etc.) were not included unless clearly providing instructional services and documented as such.
- Staff‑level unmet need (e.g., no adequate home broadband) is documented for each staff recipient.
5. Cost Reasonableness and Price Support
- For each device type, you have evidence showing the price is reasonable (quotes, bid responses, price lists, comparable offers).
- You can explain why selected prices may be higher than typical market averages (e.g., features, bundled items, timing), with documentation.
- You understand that FCC “reasonable cost” caps (e.g., $250 for hotspots) are ceilings, not automatic reimbursement amounts; invoices reflect actual market‑based pricing.
6. Timing and Program Limits
- All purchases and services were received or delivered by the June 30, 2024, ECF sunset date.
- Deployment and usage occurred within the applicable ECF funding period.
- Invoices and appeals were filed within required deadlines and align with documented deployment and need.
7. Certifications and Records
- Program certifications (on applications and reimbursements) accurately reflect use, unmet need, eligibility, and pricing.
- Documentation is organized and retrievable in case of USAC or FCC review (surveys, deployment logs, invoices, contracts, pricing research).
- Internal review confirms you did not “willfully or knowingly” request reimbursement for unused or ineligible equipment or services
This summary reflects the FCC’s recent ECF appeal decision and key compliance lessons from DA 26‑138 Click Here
