Ch-ch-ch-ch-ch-changes

I feel like I already gave my opinions about the NPRMaFNPRM draft in  6 blog posts (1 2 3 4 5 6); I'm not going to rehash all that for the final version. I'll just shoot my mouth off about the differences. And I'm too lazy to read through the final version looking for changes, so I'm leaving it up to Claude. Here are the differences Claude found that I think are interesting, and my ill-considered opinion of them.

The first change is small in size, big in consequence: the comment period was doubled from 30 to 60 days; the reply comment period remained 30 days. 60/30 is pretty standard, and should give advocates enough time to get the word out in hopes of a comment tsunami moving the Commission away from some of the more damaging ideas in the doc.

In the final, the Commission asks, "Does the Commission have the authority to limit or sunset the E-Rate program?" (paragraph 12). That's what I wondered when I read the draft. I'm no lawyer, but my common sense (aka evidence-free gut feeling) says that if Congress created the program, only Congress can sunset it. The FCC can grow or shrink the program, and has done so repeatedly. (The overall program cap, for example, would keep the program small, if the FCC hadn't implemented stingy C2 budgets and kicked voice out of the program. More recently, the FCC added bus Wi-Fi and home hotspots, only to yank them away.) So limit yes, sunset no. A more considered opinion from an ex parte by an ad hoc group called E-Rate Advocates follows in paragraph 13.

Then the Commission asks about the arguments made ex parte by former Commissioner Furchtgott-Roth. Yikes! This guy wants to outlaw the BEAR and only allow payments to "eligible telecommunications carriers." Goodbye, C2. He's right that the program has morphed in some unexpected ways, but I hope his ideas don't get any traction.

Some of Mr. Furchtgott-Roth's ideas get more traction because of the Supreme Court's recent overruling of Chevron deference; now courts can supplant an agency's reasoning with the court's at will. I hope we're not going to start seeing more lawsuits trying to hem in the E-Rate.

Can the "evolving level of telecommunications" statement in the law allow the FCC to shrink the eligible services list in addition to expanding it? Sure. I mean, they actually kicked voice services off the eligible services list, even though only voice services pay into the fund.

Paragraph 27 brings up §254(b)(3), which says that "consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services ... that are reasonably comparable to those services provided in urban areas and .. at rates that are reasonably comparable to rates charged for similar services in urban areas." Hey! That's the High Cost program's problem! The E-Rate is in §254(b)(6). If you want to improve service and lower costs to remote areas, start encouraging leased fiber with special construction and self-provisioned fiber in rural, insular, and high cost areas; build competition. (The Commission asked if they should limit competition in paragraph 22.)

AI rears its head in paragraph 24: "Does the E-Rate program advance or otherwise impact that policy goal" (of teaching and using AI in the classroom). Yes, it does. Schools will need ever fatter pipes to reach the data centers where AI lives.

Paragraph 29: "...some suggest that screen time may be used in the classroom to calm or reward students.112 Should these uses be considered 'educational purposes' as contemplated by the Communications Act?" I would say that calming and motivating students certainly serves an educational purpose. I'm not an educator, but if I were, I'd want a classroom full of calm, motivated students.

 Paragraph 30 asks "whether E-Rate funding should be conditioned on the imposition of screen time limits in schools and libraries...." What?! No. Just another example of lawyers trying to put controls on how educators educate. Leave decisions on whether and how much to limit screen time to parents, districts and teachers.

 Paragraph 31 proposes requiring that parents be given an opportunity to opt their kids out of screen time. Again, let districts handle this. Parents can bring their concerns to their elected local representatives on the school board and policy can be made at that level rather than some one-size-fits-all requirement developed by some lawyers in DC.

Paragraph 58 asks if resellers and the like should be excluded from the definition of "consultant." In my experience, the reseller (or channel partner or whatever) is the service provider. I can't think of a time when I dealt with a reseller who was not the service provider. 

 LCP suddenly appeared (paragraphs 85-88). I'm happy to see LCP appear every now and then, hoping that service providers will pay attention to the rule. I'd love to see the rule enforced somehow, but I don't have a practical solution for that. Here's a weird sentence in the middle of paragraph 86: "Should we require that the LCP be the median of all available rates for functionally similar services?" Uh, would that be the "Median Comparable Price"? Let's strive for lowest.

Eligible?

 With all the brouhaha about the NPRMaFNPRM, will anyone notice that the draft Eligible Services List is out? We don't have much time to comment ("file comments on or before July 30, 2026, and reply comments on or before August 14, 2026."), and most of us will be focusing our attention on the NPRMaFNPRM.

The draft ESL is usually a snorefest, anyway, so perhaps it's OK that the comment period falls in the midst of our existential crisis.

This year, the FCC really is asking for comments on two items:

1. MIBS. Nothing new here; they were asking questions about MIBS last year, too. And they targeted it in the NPRMaFNPRM (paragraph 84). I think maybe it's the end of MIBS as we know it. I'm not betting on total MIBSageddon, but they'll put such restrictions on it that the few applicants that were using it will be unable to shoehorn their service into the new definition of MIBS. But perhaps a service provider will contort their offering to fit the new definition.
2.  Network-as-a-service (NaaS). Basically, a WAN where the circuits are dynamic, increasing and decreasing bandwidth to meet demand, with a concomitant increase or decrease in the cost. I don't see a great way to apply for this in E-Rate. You'd have to guess at the max bandwidth you'll need, and use the cost of that for the year, which would certainly mean actually spending less than you applied for. Not a problem unless everyone does it, then the annual Demand Estimate will be inflated. I don't see the "heavy administrative burdens" that the FCC says come with NaaS, and it would probably lower disbursements from the program (though probably increase commitments). Let some applicants try it and see how it goes.

Can we take fractional T-1s and Switched Multimegabit Data Service off the list? Has any applicant out there used either of those in the last 25 years? And telephone dial-up? Can you imagine trying to connect a school or library at 0.000056 Gbps? (You can check me on the number of zeros there; my brain seized up.) And that's assuming you could still get an analog phone line; the phone companies are all trying to get rid of their analog copper in favor of digital connections with voice riding over IP.

They've integrated the new definition of C2 to include connections between buildings on one campus from the recent Report and Order and Order on Reconsideration. Good, more clarity is better.

Is anybody paying for caching equipment? Every now and then I see someone offering a caching solution, but it usually turns out to be caching in the cloud, not in the closet. Still, no harm in leaving it on there, and maybe one day it will make sense to put a caching device in your rack. (If it makes sense anywhere, it will be at a school: "All right, everyone go to....") But it will probably be part of your firewall, further tangling the eligibility of the firewall.

 Is it just me, or does the ineligibility of "unbundled warranties" feel like rubble left over from a fight long ago? It seems to me that the FCC just moved unbundled warranties into IC where they're treated like licenses. Or does the FCC think "warranty" only means "hardware replacement"? At least some clarification is in order.

Is anyone getting "support for data plans or air cards for mobile devices"? Hard to see how that's going to be cost-effective when cellular hotspots can serve multiple devices for the same cost.

Wait a minute. Under the preamble to Category Two (p. 7), it says: "broadband connections used for educational purposes within, between, or among instructional buildings that comprise a school campus" is C2. That agrees with the recent reconsideration order. But under "Connections between buildings of a single school" (p. 9). it says: "Connections between different schools with campuses located on the same property (e.g., an elementary school and middle school located on the same property) are considered to be
Category One data transmission services, unless they share the same building." The reconsideration order changed the §54.500 definition of Internal Connections to: "A service is eligible for support as a component of an institution’s 'internal connections' if such service is necessary to transport or distribute broadband within one or more instructional buildings of a single school campus or within one or more non-administrative buildings that comprise a single library branch. Multiple schools with the same billed entity may share a single school campus." Doesn't that mean connections between schools on a single campus is Internal Connections?

 As usual, more questions than answers. 

SHLB speaks

 For those of you who didn't find my 6 blog posts (1 2 3 4 5 6) on the NPRMaFNPRM to be enough, or perhaps wanted a more reasoned take, check out what SHLB had to say. Of course, they said it to the Commissioners, while I just ranted into the ether.

For those of you who are applicants, check out the last page: it has a list of questions that SHLB thinks the FCC should be asking. When you send your comments to the FCC (and you should), those questions make a good outline for your comments. 

Thank you for your contribution

Another record-setting contribution factor: 38.8%. No surprise, really. We're just going to keep hitting new records until Congress or the FCC changes the contribution base. Let's hope we get some action from Congress soon.

The path to a portal begins

 I'm guessing it's USAC's first step towards the bidding portal: they're "hosting an Industry Day ... to provide context on the E-Rate program, present an assessment of EPC’s current state, share USAC’s modernization direction, and hear from vendors with relevant expertise."

I'd love to be a fly on the wall for that meeting, just to watch the vendors' reaction when USAC says that they want a complete bidding portal integrated with EPC ready to go live in one year. I imagine heads nodding as USAC describes what they need to build and how it needs to connect to EPC, and how many bids it will have to handle, and then when they say, "...and it all needs to be ready to go in a year," vendors start looking at each other and holding whispered conversations.

I think it's good for applicants that USAC seems to be envisioning the bidding portal as a part of EPC, rather than a separate system, but it makes the development more complicated, which makes the timeline tighter.

As I've said before, I think we'll see USAC forced to take the option in footnote 67 of the Portal Order, and just require document submission for FY 2028-2029 rather than have the whole portal go live.

Not seeing the streamlining

For my final post on the new NPRMaFNPRM, I'll shoot my mouth off about the "Further Streamlining E-Rate Administration" section.

Use of Existing Contracts:  Oh no, don't take the Kalamazoo Reconsideration Order. Not only was it useful, it was fun to say. "What?! Another client who forgot to mention to us that they were signing a new ISP contract? Oh well, let's hope we can Kalamazoo that baby." (We could only hope that Kalamazooing would work because there was always the risk that the contract would not be the most cost-effective bid.)

But really, it's not terrible. Instead of going through the bidding treating the new contract as a bid, we'll have to go through the bidding process and ask the existing vendor to bid. On the plus side, we can make the new contract start July 1, so we won't run into this problem again.

It's hardly streamlining the process, though.

Service Substitutions: New requirements for applicants and USAC. How is this streamlining?

June 30th Deadline for SPAC Form:  Oh, no. A lot of (most?) applicants file one BEAR per funding year, and since you can't file the BEAR until the final invoice is paid, that BEAR gets filed in July or August (later if the AP clerk drags their feet on collecting the invoices). And the filing of the BEAR is when applicants discover that the SPAC has not been filed. If the deadline to file the SPAC is set at June 30th, there will be BEARs that can't be paid. That seems unfair: the service provider fails to timely file the SPAC, and the applicant gets punished. And how will setting a deadline encourage service providers to file timely? Having had to beg for the SPAC, I can say that some service providers have a very lackadaisical attitude towards the SPAC. Can we set up some punishment for service providers that fail to file by the deadline? How about this: the FCC fines them double the amount of any BEARs submitted, and then uses half the fine to make applicants whole. Of course, the applicant would then have to find a new service provider, because that provider would leave the program right quick.

FCC Form 479 Revisions:  OK, seems reasonable. But don't require that consortium members file online. Leave that option open, but allow consortium leads to collect them in any way they want. Adding some certifications doesn't add much administrative burden (it's not more forms or more signatures, just more certifications to check).

Other Form Revisions: The changes seem fine. I don't see how it's streamlining anything, though.

Cost-Effectiveness Requirements: Nope. I don't see how "the recently adopted competitive bidding portal will assist the Commission and USAC in providing transparency into whether there are patterns or characteristics of entities that receive one or no bids." I can tell you what characteristics are common to applicants that get one or no bids: they are generally 1) small and 2) remote. And if necessary, I could prove that using data already in OpenData.

The ideas for ensuring cost-effectiveness are terrible. If the FCC investigates the pricing of a service provider, that provider is more likely to withdraw their bid than go through an investigation. And if the FCC tries to apply pricing from one remote area to another remote area, the provider will withdraw their bid. And if the FCC tries to apply pricing from one client to another client who may not be the same size or the same distance from a NOC (or, for MIBS, from the engineers' home base), the provider will withdraw their bid. And none of these suggestions streamline anything.

You know what would work for Internet access at least? Reclassify Internet access as a Title II telecommunications service. Then you can regulate the hell out of the price. Otherwise, no amount of FCC interference is going to create a fair market for small remote applicants.

I really didn't see much streamlining in there. How about just calling this section "Further Changing E-Rate Administration"?

For the children

From the NPRMaFNPRM: "...does the Commission have any statutory obligation beyond CIPA or responsibility as a good steward of the limited E-Rate funds to assess how E-Rate-funded networks and services may be contributing to these potentially detrimental effects on children and minors?"

No. Just no.

For heaven's sake, leave those decisions to the professionals in the schools and libraries. The NPRM says, "experts have recommended limits on screen time for children and minors based on age," but the footnote points to a single review of studies by one expert, who recommended more research, not limits on screen time. Is the FCC thinking of making districts "demonstrate learning benefits through independent, replicated trials before" getting E-Rate funding? Or "requir[ing] public disclosure of evidence standards, conflicts of interest, and performance claims" on the Form 470? Because that's what the expert recommends.

Let's wait until the science is settled, and then trust educators to do what's best for children.