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Sunday, September 23, 2012

Price wars

Well, looky what's in the News Brief: lowest corresponding price (LCP).  As I blogged back in May, LCP is a requirement that service providers give E-Rate applicants their lowest rate.  E-Rate applicants are supposed to get the lowest price for a particular service offered to any other customer in the service area.

LCP has been sitting in a corner, largely ignored by the E-Rate program.  The FCC put the regs in place back when the program started, and then nothing happened.  Ever hear of USAC or the FCC demanding a service provider lower its price to the LCP?  Me neither.

Well, someone at the Justice Department read the regs recently,and  took legal action  in Indiana, Wisconsin, Michigan and New York.  The only settlement so far is with AT&T in Indiana, where the violations were discovered by a lawyer working for the state. Feds 0, states 1.

So a little while after the 2009 Indiana settlement, which cost AT&T $8.3 million, the FCC got a petition from the telecom lobbying groups to "clarify" (meaning "hamstring") the LCP rules.  The FCC quickly responded with a request for comment in May 2010.  And then LCP returned to its dark little corner.

Then on May 1, 2012, ProPublica publishes an article about the failure of USAC and the FCC to enforce the lowest corresponding price rule.  And whaddayaknow, in the service provider training a scant 10 days later, there are several slides about LCP; in previous trainings, there was no mention of LCP.  Of course, since no one at USAC had given any thought to LCP, the slides basically just quoted the regs.

Now a cynic might say that USAC was trying to fill a News Brief, and as it scraped the bottom of the barrel, it came across the LCP slides, reformatted them, and put them in the brief.  But I am even more cynical, which makes me optimistic.  More cynical in that I believe if USAC and the FCC intended to continue to ignore LCP, they would have spiked the News Brief story.  Because applicants who macheted their way through the dense underbrush of regulatory prose discovered an ancient paradise they never knew existed.

Now that the cat's out of the bag, I am hopeful that many service providers will be hit with requests for LCP. Unfortunately, applicants don't have any way to find out what the CPs are, so they can't really tell if theirs is L.

So will USAC start enforcing LCP?  How?  If it were part of PIA, that would reduce demand.  Just sayin'.

2 comments:

  1. It seemed pretty clear from the USAC training that enforcement of LCP will be directed at service providers, not applicants.

    And I heard a rumor that some big phone companies are thinking about pulling out of the E-Rate program until the LCP matter is resolved.

    My first thought: Is a service provider's refusal to participate in the E-Rate program enough justification to get an Operational SPIN Change?

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  2. Anonymous8:44 AM

    I was mentioned several times in the Propublica articles in May 2012. I find it amusing that nothing is being done with pricing as I scour through current billings for schools & libraries and find that LCP violations continue. I have been considering expanding business to include LCP validation as there is a serious need to attack this problem while it's fresh.

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