Pro-rate the E-Rate?

CoSN (the Consortium for School Networking) has weighed in on the funding shortfall for 2012-2013 in their monthly Washington Update.  They seem more pessimistic than my prognostication: "it appears extremely unlikely that there will be enough funding to fully fund even the 90% level for Priority II applications."  They also raised the pro-rating specter.

Here's a statement I disagree with: "With the Program Year beginning July 1, USAC and the Commission will have to decide quickly on a strategy for handling this funding crunch."  The FCC should decide quickly, but they don't have to, and I don't think it will.  Heck, they waited until 2 months after the *end* of FY 2010-2011 to toss money back into that year.

I expect the FCC to look at the ceiling and whistle, waiting until enough rollover funding accumulates to cover the ninety-percenters for 2012-2013, and then do the rollover.  Of course, the funding year will be over by then, but that seems to be OK with the FCC.  The problem with that strategy is that before the rollover fund gets big enough, we'll see the demand for 2013-2014, and the FCC is going to be looking at the same problem only worse.

I have a cynical new addition to my list of possible reasons for August's funding tossback
4) The FCC depleted the fund on purpose to precipitate the current crisis, so that we can revisit making some services (like Web hosting and telephone service) ineligible for E-Rate funding.  Or maybe make some more fundamental overhaul.