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Wednesday, July 02, 2014

Modernizing the Facts

Let's take a look at the FCC's analysis of the effect of the proposed reforms.  Of course, my analysis is hampered by not knowing what the reforms actually are, but you know me, always happy to give my opinion without having all the facts.

"get high-speed Internet to all classrooms and libraries by 2019."  Wait, the plan is to cover all buildings in 5 funding years, starting in 2015-2016.  That means the last classrooms will be covered in 2020-2021.

"only 43 percent of public school districts report that their internal connections are capable of supporting a one device...per student...."  Almost accurate.  What 43% of tech directors said was that a typical school could support 1:1.  Not all the schools in their district.

"50 percent of schools lack the internal wiring...."  Just plain wrong.  The survey results showed that 50% of schools have Cat5 cable, which can support for 1000BaseT but is not preferred.  That same survey says that 77% of buildings have Cat5e.  So at most, 23% of school lack wiring to get them to gigabit speeds.  And some of those 23% may have Cat6 (which that survey says is in 61% of buildings).  So you can say "50% of buildings have Cat5 wiring, which is not preferred for gigabit speeds."  That would be deceptive, since most of those buildings also have Cat5e and Cat6 (and fiber, though presumably not to the desktop), but at least it wouldn't be incorrect.

"In Funding Year 2013, no funding was available for Priority 2 requests."  Not true.  About $200 million was available, but that was nowhere near enough to fund all the requests from 90% applicants, so rather than follow the rules, which say applicants at that discount level should have received a pro-rated portion of the remaining funding, the FCC followed tradition (and common sense) and didn't fund anyone in that band.  Mind you, Chairman Wheeler had just announced his plan to leverage an extra $2 billion out of the fund, so he could have opted to use some of that to fund P2 for 2013.  For that matter, since they were already ignoring the rules, they could have given all the 90% applicants a per-student allocation of, say, $150.

The graphs on page 3 certainly show the abject failure of the 2-in-5 Rule.  But where did they get those library numbers?   I spot-checked the number of library locations on applications in 2012.  I found 78  471s where the applicant was a library.  4 of those applicants had 2 applications that year, so I took a look at 74 unique 471s.  The total number of entities listed on the Block 4 of those applications is 362.  Not 177.  I'd want to double-check my number before I published it in a report, but I'm sure that 177 is way off.  Also the majority of libraries choose not to apply for P1 funding, so it seems unfair to use the total number of libraries for the big bar every year.

How much will we save by tossing those services listed on page 4?  (Hint: it's not the $1.2 billion claimed.)  Let's look at USAC's most recent analysis. Pagers: $0.001 billion.  Email: $0.01 billion.  Voice: $0.57 billion ($0.55 billion if you take VoIP out).  What else can we toss in there?  They didn't mention webhosting, but I'm sure that's on the chopping block: $0.027 billion.  Let's toss voicemail: $0.0002 billion.  The Chairman suggested chucking DNS hosting: oops, too small to be listed.  I'm not even halfway to $1.2 billion.  And those numbers are approvals, not disbursements, so the actual savings will be even smaller.  Plus, if you leave VoIP in the program, then the voice dollars will just flow to VoIP, and the savings will be less than $0.03 billion.

The table starting on page 7 is false.  The school column is just optimistic, assuming that every school that was on a 471 last year will be getting Wi-fi funding.  It's true that setting aside for Wi-Fi, then doling out a certain amount per student, you can theoretically give Wi-Fi funding to all those schools.  Not as much funding as they need, but some funding.  But there are 132,270 schools out there, so even if you give a little money to the 116,000 schools that applied for funding last year, you're still missing 16,000 schools.  You won't get to 99% of students if you leave out 12% of the schools.

But where the table is flat-out false is the "Additional Libraries" column.  It assumes that just because Wi-Fi funding becomes available, all libraries will get some.  Wrong for two reasons.
  1. Only about 40% of public libraries apply for funding.  The majority of libraries just leave E-Rate money on the table.  And I expect that the percentage of libraries applying will drop when voice is thrown out of the program, because that's the only funding some libraries get.  
  2. CIPA.  Many librarians in this country value our constitutional rights more than a little federal funding, so 29% of libraries don't apply for E-Rate because of CIPA.  That's not going to change just because the FCC's going to toss them a one-time bone of a few thousand to get Wi-Fi. 
Wow, I did not expect this to turn into a fact-checking mission, but there were so many glaring errors.

1 comment:

  1. As the CIO for a school district here in Colorado, and, being a floor funded school district in Colorado (well below the national average per student funding), we heavily rely on the E-rate program to provide necessary, basic services such as voice for all of our schools. With the proposed changes in E-rate by the FCC, we look at having to find approximately $200,000.00 to fill in for the shortfall that E-rate program will no longer provide for. I agree that there needs to be more to provide more broadband to schools but, being part of a county local broadband planning committee, I don't feel that E-rate is going to cut it unless something is done to get the services into under-served rural areas where broadband services are near to non-existent. WiFi is great and all but if there is no broadband services in the local areas to tap into, WiFi is just a thing that won't do much. To bring broadband services into an area, there needs to be competition. The funds that were used by the FCC to subsidize monopolized CLEC organizations to provide services to under-served rural areas didn't do much to increase broadband capabilities. Conduits for high speed broadband in and out of communities to provide redundant, reliable, and affordable broadband services are still way behind. I don't feel that changes to modernize E-rate is going to help much unless something is done to get the infrastructure into the communities in place first.