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Sunday, September 30, 2007

Oh, happy day!

I got a little piece of sunshine in the mail yesterday: a pink envelope from USAC. True, it was a remailing of a 486 that had been returned due to an address error, but it gives me some small hope that colorful envelopes are not going the way of the dodo.

Thursday, September 27, 2007

The side with the most suits

Let's hope the side with the most suits win in this one. While the FCC brought five people to a recent "ex parte meeting" (think "private audience"), which I think is more than usual, but SECA (the State E-Rate Coordinators Assoc.) brought a whopping 28. What issues brought people from all over to the FCC? And what do I think of them.
  1. It seems that SECA asked to have the Form 471 online application go live before the filing window opens. Not a good idea in my mind. I'd rather give USAC all the time we can to add new features to the online form. Mel Blackwell mentioned that they want the online 471 to pre-populate as many fields as possible. If they would be able to have a "duplicate last year's 471" button, I'd be willing to wait until January.
  2. Clarification of when FCC rulings apply to all applicants, and when they apply only to the appellants. Yes! Actually, it is usually pretty clear, but it took forever for USAC to acknowledge that the FCC was saying that two dates are not necessary on a contract. More clarity is always better.
  3. SECA reiterated the request in their ESL comments that USAC let applicants slide on whether they put the right Category of Service on the Form 470. I don't see how the FCC can go along with this one. If I don't check on the 470 that I want Telecom Services, how are potential telecom bidders supposed to find me? On the other hand, the Form 470 is all but useless as a tool to promote competition anyway, so why be a stickler?
  4. "Procedural clarification of status of Comprehensive Reform NPRM." I hope that the 28 people at the meeting will let the rest of us know if the FCC said anything of note about this. [I know some of you SECA members read this blog; how about posting a comment? You can remain anonymous.] This thing is like the Sword of Damocles. Conscientious applicants are starting to file 470s, and a month from now, the FCC could say that 470s are no longer required for FRNs under $3,000 (see paragraph 40 of the NPRM). That's most of the FRNs in the program.
  5. SECA requested that the amount of rollover funds be announced before the start of the funding year. I'm all for that. It's not as good as my scheme to use rollover funds to set the denial threshold at the start of the filing window, but it's a big improvement over the current chaos.

Way to go, SECA! But if you know, please tell us if the other shoe from the Comprehensive Reform is going to drop for the 2008-2009 funding year.

Tuesday, September 18, 2007

New Form 486 online

For those of you that haven't heard, the new online Form 486 is available.

I took it for a little spin this afternoon, and I like it. I got a couple of errors, but that's not unusual for me; I must have some security setting somewhere that doesn't agree with the USAC's applications, because I get an error most of the time when I use the "Submit a Question" system, and occasionally get them when I use other tools.

The bottom line: I was able to submit and certify a Form 486 pretty quickly. Much more quickly than the old fill-in PDF or the Interview.

A feature I'd like to see in version 2.0: automatically pre-populate Item 7, so I don't have to type in anything. If Item 7 listed all the FRNs for the applicant, with a start date of July 1, 90% of applicants would just click "Next" and be done. For the few that need to take out an FRN or change a date, that would be much quicker than adding an FRN.

(By the way, at the USAC training last week, Mel Blackwell said that he wants more pre-population in all the application tools. Bravo!)

One big problem: The "Display" button will only display forms that were submitted using the new tool. So there is still no way to display a 486 that was entered in the past. That's got to be fixed, preferably in version 1.1.

But all in all, kudos to the USAC IT folks on another tool well done.


The unkillable "two-signature/two-date" rule (2s/2d) is finally really dead. I couldn't see how it could survive the Adams County Order, but it had survived many other attempts to kill it.

Many of us had been whining for years that it is common for a contract to have two signatures, but only one date. However, USAC had taken the position that the Fifth Report and Order required that all contracts have two dates. The Adams County Order cleared that up.

But USAC has gone further than anyone expected. Now contracts only need one signature, if that is allowable under state law. So we're down to 1s/1d.

New letters

As always, the Q&A sessions at the USAC training last week in DC were too short. Here is the most burning question that I did not get to ask at the recent USAC training: What color will the envelopes be?

I've been on this issue for a while. I just want the envelopes to match the paper.

Apparently, letters from USAC will soon be printed on both sides of the paper (and 3-hole-punched), then folded in half and put in 6x9 envelopes instead of the 9x12 envelopes. I'm not looking forward to the 2-sided letters, since my copier doesn't do 2-sided copies, but I think it's worth it to save some trees. It's also going to cut USAC's costs, which is all good.

But would it cost so much to make the envelopes brightly colored?

Monday, September 17, 2007

FCC meets the heavy hitters

On Sept. 13th, the FCC got a visit from AT&T, Verizon, Embarq, Sprint and Qwest. I can't keep up with all the mergers and splits among telcos, but I'm sure that covers most of the phones in the country.

So they came bearing a bunch of ideas for reforming the E-Rate. I was prepared to hate the ideas, as I have in the past, but I kind of like them. Here's my scorecard:

E-Rate accounts
Description: Instead of having applicants (or service providers) invoice USAC, once funding is approved, it goes into an account that applicants can use to pay bills.
My Assessment: It's outside the box, which I like, but the idea's no good. It's a cash flow nightmare: USAC would have to pay a huge amount up front, and some applicants would have to return funding at the end of the year (which they wouldn't do, so USAC would have to chase down that money).

Short-circuit BEAR payment loop
: Send BEAR reimbursement checks to applicants, instead of ricocheting all checks off the service providers.
My Assessment: Yes, yes, yes.

Require separate 471s
: Require that Priority 2 funding requests be on a separate 471 from Priority 1 requests.
My Assessment: This suggestion isn't bad, and was made for all the right reasons, but I hate new requirements. And the whole problem would go away if PIA would just get comfy with "As Yet Unfunded."

Form 471C
: Create a separate Form 471 for the continuation of multi-year contracts, kind of like the 1040-EZ.
My Assessment: I'm on the fence about this one. Multi-year contracts are a little tough, but a whole new form? I'd rather see smart pre-population of the 471: you click a button on the online form, and all your FRNs from the previous year pop in, and any multi-year contracts you submitted come in nicely.

Close 470 window early
: Make 12/31 the deadline for submitting the 470.
My Assessment: No. The idea is to give applicants more time after the 470 to file the 471, but let's get real: most applicants need one day to file the 471, and it will be the last day they're allowed to file. And if you take a step back, one of the big-picture problems with this program is that it forces applicants to make technology decisions 6-18 months before the technology will be implemented. Let's not make that any worse by pushing deadlines further away from the implementation date.

Early ESL
Description: Release the Eligible Services List by June 1 every year.
My Assessment: If I could turn my E-Rate dreams into lucid dreams, this would be one of the first.

The final score: 2-3-1. But there were two lovely proposals, and none that I hated.

Follow the money

I took a glance at the contribution factor proposal for Q4 2007. The only part I found interested was the table on page 2, which breaks down costs for each program. I can see why there's so much excitement about the High Cost program. Back in '96, the E-Rate and High Cost were about the same, I think. Now it looks like High Cost is more than twice as big as E-Rate. Granted, the E-Rate cap, which does not adjust for inflation, means the program is being cut a bit every year, but still....

I dumped the numbers in a spreadsheet because I was interested in what percentage admin costs were of the total for each program. E-Rate comes in around 3%, which I think is quite reasonable.

Here's something that sticks in my craw a little: the admin costs for E-Rate and Rural Health Care (RHC) are about 10 times the cost for High-Cost and Low-Income. What do E-Rate and RHC have in common? The funding goes to someone other than a telco. One message you could take from that is: we trust telcos, but we don't trust schools, libraries and hospitals.

Of course, if I look at where waste, fraud and abuse is being found in the E-Rate program, I can't think of any cases involving telcos.

Thursday, September 13, 2007

Training day

So here I am in DC at the first training. Some impressions from the first day:

So I was checking out my idea that no one says "SLD" any more, only USAC. I think I only heard "SLD" once: when Scott Barash was talking about the history of the program. Mel Blackwell said "Schools & Libraries Corporation" a couple of times when talking about old times.

I hadn't heard Scott Barash speak since he became head of USAC, so I was pleased to hear him refer to applicants and service providers as "our customers." He also said: "We value your input.... We're listening." I know, just because he says it doesn't make it so, but when the leadership of an organization says something, it has an effect. So it was good to hear Mel Blackwell (whom I would call the head of the SLD, but no one says "SLD" any more, so I'm kind of stuck) say, "We're trying to be more friendly and tell you more of what to do."

Mr. Blackwell also said he'd like to get appeals "down to zero," and pointed out that appeals are going down. Not to be a spoilsport, but at least part of that is because there's no point in appealing to USAC any more: just go straight to the FCC. And there will be some upward pressure now that we can include new info in appeals. Long term, though, the number of appeals will go down, because they've finally listened to me, and are going to send out "you're about to be denied, here's why, and here's what to do about it" letters.

Mel also said that he wanted to shorten the window, though not this year. What he really wants to do is move up the 471 deadline, so that they can get a better jump on processing applications. Wrong. Move up the deadline, and applicants will howl. On the other hand, announce that applications will be processed on a "first-in, first-out" basis, and applicants will start filing earlier. It's all about incentives.

If you were hoping for an update on rule changes, you'll have to wait for tomorrow at least.

Wednesday, September 12, 2007


I was just looking at the PowerPoint slides from an ex parte discussion that Embarq made at the FCC. It's all about the E-Rate, so of course I have opinions I'd like to share. Here are the main topics I teased out of it.

Embarq makes the case that in order to get funding from the E-Rate, VoIP vendors should have to follow telecom regulations. Well, yeah, except that VoIP is currently under Internet Access. I'm all for making VoIP a "basic" Telecom Service (and said so in my ESL comments this year), but until that happens....

Embarq wants to tighten up the certifications required of service providers. I'm OK with all their suggestions except the last one: they suggest that all service providers be required to file a Form 473 (the SPAC, which service providers file annually) before taking part in bidding. That might be reasonable if bidding took place close to the start of service, but since bidding has to start at least 6 months before service can start, it seems odd to force service providers to file an annual certification half a year before the annum.

This one I like. Basically the idea is to have more information displayed about service provicers on the USAC Web site.

I don't work for service providers, so I don't know what effect these suggestions would have.

Competitive Bidding Impropriety:
Embarq made a good suggestion and a bad suggestion. The good suggestion: consultants should have to certify that they are not affiliated with any service providers. The bad suggestion: No school district employee or board member should be allowed to serve on the board of any service provider in that state. Just look at the WiscNet travesty, where a bunch of school districts had people on the board of a cooperative that provided Internet access, and got COMADed.

Internet Access Usage:
I'm on Embarq's side here. The slide doesn't say so, but I suspect that they are aiming at applicants who set up a WAN, then hook that WAN to the Internet, and call it all Internet Access. It's not, even under current rules, but the rules need to be clearer on that.

Tuesday, September 11, 2007

A slice of PIA

The business section of our local paper made prominent mention of BearingPoint's stock tanking over 10% in one day to a new all-time low. I took a quick look, and it seems to have lost a third of its value over the last month and a half.

I don't spend too much time trying to read the tea leaves on Wall Street, but it got me wondering: How much BearingPoint stock would I have to buy to create enough of a conflict of interest that BearingPoint wouldn't be able to conduct site visits with my clients?

Which got me thinking, why stop there? Solix (née NECA Services) apparently recently changed its rules so that ownership of stock is no longer restricted to NECA members, so I gotta get me a piece of PIA. But it seems to be closely held, and I don't know any telecom CFOs I can ask for a piece of the action. But I'll keep my eye out for an opportunity.

Monday, September 10, 2007

Training pre-assessment

The SLD has released the slides for the trainings that start this week. My pre-assessment of the training.

The Good:
Sessions devoted to tech planning and competitive bidding. Both of these are areas where applicants often lose funding. Of course, a lot of that is due to bad rules (e.g., the "2-signature/2-date" rule, which was of course never really a rule, but which nevertheless torpedoed millions in funding; or the "sufficient resources" rule, which requires applicants to certify that they have secured funding 3-6 months before their budget is secure).

The Bad:
PowerPoint-as-handout. It's a pet peeve of mine for two reasons:
  1. Slides with enough info to be of any use as a handout induce the presenter to read. I don't want to spend an hour listening to someone read.
  2. Slides cannot contain enough information.When Slide 7 of the Competitive Bidding stack says, "Make sure that you have a Letter of Agency" (LOA), that doesn't tell me in which circumstances I need one, or what it needs to look like. However, since the slides have not been approved by the FCC, there may be statements that are not in alignment with the FCC's thinking, like, for instance, USAC's apparent belief that an LOA is required any time a consultant works on an application, not just when s/he is a contact or signatory on the form. So maybe it's just as well that the handouts don't try to actually spell out the rules.
The Ugly:
Only one hour to cover Eligible Services (which includes Item 21 Attachments and Service Substitutions). 63 slides in 60 minutes. I'd better arrive Friday morning highly caffeinated.

Friday, September 07, 2007

SLD, we hardly knew ye

I've almost entirely stopped using "SLD"; now I use "USAC." It hasn't been anything conscious, and maybe it's been going on for a while, but I just noticed it this week. I'm thinking USAC has stopped using "SLD," but I can't think of a way to check that in under 5 minutes, so it will have to remain a hypothesis. Or maybe I'm spending more time with the invoicing people, who are not, I think, part of SLD.

Or maybe I just like "USAC" more because it sounds like an insult.

Thursday, September 06, 2007

Pretty pictures

Funds for Learning has released a cool new report. Basically, they took performance measures in the FCC's new Report and Order and ran the numbers. My kind of report: almost all pictures. It was interesting to see things like the mean time for PIA to process an application, but only one graph made me say, "Wow!"

On page 12, they show the mean and median amounts for FRNs. Two things jumped out at me:
  1. The median is low. The median has stayed steady at around $3,000, which means that half of all FRNs are requesting less than $3,000 of funding for the year. Now it seems to me that it would be reasonable for the FCC to say, "You know what? FRNs that are less than $2,500 just aren't worth the time it takes PIA to review them. From now on, they'll get PIA Lite." (Yeah, I know, you'd have to have some rule to keep applicants from breaking all their large FRNs into teeny ones.) Instantly, PIA workload would plummet.
  2. The mean is so much higher than the median. Thinking about it, I shouldn't be surprised: the sky is the limit on funding requests. I did a quick check, and for 2007 there were 418 FRNs requesting more than $1 million, and 18 over $10 million. That will drag up your average.

Some other interesting tidbits from the list of monster FRNs (most of these are not approved yet):

  1. The single largest FRN: Dallas, for $57 million.
  2. LA had 5 FRNs over $10 million.
  3. NYC had the largest non-Internal Connections FRN: $25 million for NYC's phone bill.
  4. Largest Internet Access FRN? The statewide network in TN, of Tennessee Order fame.
  5. Largest Basic Maintenance FRN? NYC, for $6 million
  6. Who's really hoping for the Katrina relief to be extended? Jefferson Parish, which stands to have their Internal Connections FRN jump by over $1 million if the FCC decides to give Katrina victims a 90% discount for FY 2007.

Discount madness

Man, USAC needs to do some training on how to calculate your discount. I just saw an appeal by yet another school district extrapolating their NSLP (USDA National School Lunch Program)numbers based on the percentage of NSLP forms returned.

For those of you who don't know, USAC rules allow applicants to send out an income survey, and if you get half of them back, you can make a projection based on the percentage of low-income students in the returned surveys. So if half the kids return the survey, and 75% of them are low-income, then you can say that 75% of the students in the school are low-income. Nice!

But you can't use the NSLP application as a survey and make a projection based on it, and I think this is like the 3rd appeal I've seen where some district did just that.

Why can't you use the NSLP form? Here's an analogy: Let's say you sent a survey home to parents, asking if their child was a boy or a girl, and said that you would give $250 to anyone who returned the survey if their child was a girl, but $0 if it was a boy. Of course 90% of the responses you got would say "girl"; the parents of boys just wouldn't respond

The NSLP form is like that: Low-income families who return the form, you get about $250 worth of free lunches (and maybe free breakfast, too). Families that are not low-income get bupkus. So of course the district doesn't get a random sample. They get almost all the low-income families responding, and almost none of the non-low-income families. It's a non-random sample.

I think the USAC Web site needs to state outright: "You can't use NSLP applications as a survey instrument." And put it in a NewsBrief, too.

Saturday, September 01, 2007

Cloak and dagger

Here's an appeal that burns my butt: a school district files two 470s, picks the wrong one for one of its FRNs, and gets denied.

This district lost funding because PIA clings to secrecy, whether it's warranted or not. The PIA reviewer did ask the district to confirm the establishing 470. (Those of us who do this for a living know that if you are asked to confirm anything, you're about to lose funding.) The unsuspecting applicant made the same mistake twice, and confirmed the wrong 470. Denied.

How should this have happened? The PIA reviewer should have said, "Your establishing 470 doesn't have this service listed. Either give me another 470 number or you'll lose funding." It would have saved everyone a lot of time, effort and heartburn, because you know the FCC is going to remand this one.

Why the secrecy? What could the applicant have done, knowing that the 470 was wrong? I cannot imagine a way for the applicant to use that information to defraud the program.

You want to know what great customer service would have been in this case? The PIA reviewer has access to the 470s filed by that applicant. S/he could have looked it up and said, "It looks like you picked the wrong 470 for this FRN. Did you mean to pick this other one? If you switch now, everything will be fine. If you don't switch, you'll lose funding."

Why do I hear John Lennon singing "Imagine" in my head?

The secrecy is creating a lot of waste. OK, I can see why PIA doesn't want to release, say, the algorithm it uses to select applicants for Selective Review; people would take steps to avoid being selected by the algorithm. (Of course, if you built a solid algorithm, it would serve as a deterrent to waste, fraud and abuse; people would avoid Selective Review by not being greedy, having service providers "help" file the 470, etc.) But it is just ludicrous that PIA reviewers don't say anything to applicants other than canned requests for information.