Imagining early denials

It’s been an exciting week in Washington for the E-Rate, and Funds for Learning released a nice summary. Aside from the GAO report and the USAC board meeting, which I’ve already blogged about, a new FCC Commissioner was nominated, and Congressional action on the E-Rate.

I really don’t know anything about the new nominee, except that she’s got telecommunications chops and a father in Congress. Sounds good to me.

The Congressional action is a mixed bag. On the plus side, a bill has been put forth to exempt the E-Rate from the Anti-Deficiency Act (ADA). That’s good news on two fronts. First, we won’t ever again have to worry about a repeat of 2004, when the ADA shut down new funding commitments for several months.

Second, USAC will be able to return to the practice of committing funds above the cap, knowing that not all commitments become disbursements. This will cut down on undisbursed commitments, which will make the GAO happy, but it will also make possible much quicker determination of the Priority Two denial threshold.

Currently, USAC is committing only what they can fund. For Priority Two, that means that the denial threshold can only be set after essentially all commitments have been made. And so every year we end up in a situation where funding requests which are close to the denial threshold (this year, applicants at 86% and 87%) are not approved until the funding year is more than half over (this year, 87% applicants are still waiting).

Without ADA, USAC will be able to estimate disbursements in March, and set a denial threshold at that point (which will be lower than with ADA, because it will be based on estimated disbursements, not commitments). I don't really expect the denial threshold to be set in March, but maybe it can be set before the start of the funding year.

Imagine a world where USAC announces the denial threshold in June, and it's below 80%. The permanent end of ADA makes that a possibility.