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Saturday, December 30, 2006

Block 16 frustrations

I realize that the online forms can't be convenient for all applicants, since we all have different needs, but Block 16 on the Form 470 is starting to get under my nerves. Part of that block is a list of all the area codes and exchanges for all applicants.

First of all, are there any service providers out there actually using this info? Every provider that contacts me has me resend that info, and usually they want the whole CSR.

Second of all, there are blanks for about 50 area codes. That means I have to scroll, scroll, scroll. Even for statewide applications, the state with the most area codes is CA, which has 34 (or maybe it's 36 now). Are there consortia that span state lines and actually use all 50 blanks? I think not. How I wish it were like Items 8-11; you get a certain number of lines (3 is probably enough for 99% of applicants), and if you need more, you click an "Add more area codes" line, and you get another 10.

Can you tell I've been staring at too many Forms 470 today?

Thursday, December 21, 2006

Terminate the terminal server

A new appeal popped up that reminded me of a shortcoming in the Eligible Services List that has had me grinding my teeth for years: terminal servers.

The rules around server eligibility are terrible, anyway. You buy a server to be a Domain Controller in your Microsoft network. Sure, you toss DHCP on there, because some server has to do it. Now the server is spending 90% of its time authenticating users, handing out Group Policies, and all the other overhead that goes with being a DC. Heck, make it the Global Catalog server, too. Now it's going to spend a miniscule amount of time doing DHCP, but hey, the server is 100% eligible. But move DHCP to some other server, and now it's totally ineligible. Ugly.

The really bad part about the server rules is that over the course of their useful lives, servers get repurposed. OK, if you have a server that's doing only DHCP, you can stick that thing in a corner and it will be able to do that job until the motherboard cracks from age or the hard drive seizes up. But an email server is different. Email is a resource hog, so you want a mighty machine doing that. Three years later, it's no longer mighty, so it's time to buy a new email server, and put the old one out to pasture as a file server or backup DC or something. But no, the E-Rate rules say that you have to turn off that perfectly useful server, put it in a corner and not use it for a dozen years or so, at which point it has no value and the district can dump it. (Because state laws don't allow districts to give away useful equipment, and E-Rate rules don't allow districts to sell surplus equipment.)

The solution? Set a useful life of 3 years for a server. The 2-in-5 rule basically says that you can replace your entire infrastructure every 3 years. So expand that rule a bit to say that you can only buy an email server (or servers, if your network is large enough) every 3 years. One Web server every 3 years. One infrastructure (DHCP/DNS) server every 3 years. And at the end of 3 years, the server can be sold, repurposed, whatever.

But back to terminal servers. I still don't understand the eligibility of terminal servers. They've been eligible for years, but for what use? Apparently the only allowable use is to provide a Web browser for thin clients. (I suppose providing an email client would be OK, too.) It's not clear what the eligibility is if the terminal server is providing a Web browser and other applications.

The appeal is from a company that installed a terminal server that provided access to applications. I never thought such a server would be eligible, but the Eligible Services List at the time sure made it look like it was. The current ESL is better, but I'd still like to see it made more specific.

Even better, dump terminal servers off the list. If I can't get E-Rate funding for the cost of a Web browser if it's installed on a client machine (yes, there are browsers that cost money), why can I get money for a server to provide that software to clients? Terminal servers do not facilitate the distribution of data. Thin clients that want to access the Internet send packets to the switches and routers directly. The only thing that that terminal server provides is end-user software.

Saturday, December 16, 2006

My Christmas list

I'd like to invite everyone to post their E-Rate Christmas lists. [Blogmaster's note: an anonymous note here is really anonymous. Unlike the SLD, I can't collect your IP address and trace it back to you.]

Let's see, what would be on mine?
  • COMADs only for Waste, Fraud, Abuse, not errors
  • New online Form 486
  • Even better, no Form 486
  • All FCC appeals decided within 90 days
  • Publish the secret 700-page PIA manual
  • How about publishing 200 pages of it?
  • How about just telling us what triggers a Cost Effectiveness Review?
  • Don't take the Data Request Tool offline at night
  • At least let us know when the DRT will be offline
  • At the very least, let us know that the DRT is offline. As it stands now, you just get a message that no records were found.
  • A "copy" button on the 470 and 471 which lets you import all the info from last year's forms [For most small, low-discount applicants, those forms are identical year in and year out, and for all applicants, many elements are identical.]
  • "Two-signature/two date" finally put to rest
  • Let applicants edit BEARs after they've been sent to service providers, so we can correct errors the service providers find
  • An online tech plan tool that applicants can use, set up so that it will generate plans that the SLD won't later decide are inadequate
  • A list describing the most outrageous requests. You know that PIA reviewers must pass around really hilarious requests. Let us all in on the joke.
  • Block 4 information in the Data Request Tool
  • Registration of consultants
  • The discount matrix topping out at 80% for equipment
  • Dark fiber eligible
  • An "about us" page for the SLD. There aren't that many people there, and I'd just love to see a brief resume for each of them.
  • The same PIA reviewer 2 years in a row
  • Mel Blackwell in a red suit and beard, flying all over the country, handing out Priority Two funding to applicants with a 40% discount. Ho ho ho.

Fix the 486 already!

Arrgh! I've complained in the past about the online 486 requirement that you use Adobe Reader version 5 to use the online Form 486, and I've heard Macs are not supported at all.

Recently I pondered whether version 5 will be available much longer, since version 8 is due out soon.

Now I have a new gripe. I've upgraded to Internet Explorer 7, and it doesn't play nicely with Adobe Reader 5. I would say that most of the time I'm viewing PDFs, a freeze occurs at some point. I'm not talking about just the online Form 486; any time I'm using PDFs, I can expect a freeze. When the freeze happens, it usually freezes all the tabs in that particular IE window, though I can usually (not always) continue to work in other IE windows. At some point, though, I have to force IE to quit, closing whatever windows I was browsing.

The other PCs in the office haven't been upgraded to IE 7, and we'll have to hold off now. But I'm stuck with a gimpy computer just so that I can fill out online 486es. So I'm actually considering buying an entire computer that sits in the office and does nothing but fill out 486es. I'll load it with the most ancient version of IE I can find, put Adobe Reader 5 on it, and just leave it in the corner where whoever is doing a 486 can sit.

Of course, I'll have to put it in our network's DMZ, because I won't be able to get current security patches for it, so it will be very vulnerable to a variety of malware.

How much could it cost to hire some company to create an online form more similar to the 470 and 471? I say the FCC should let USAC suck another $20,000 out of the fund to get it done. Since they'd just be building a new front end to the SLD database, I wouldn't think it would cost much more than that.

Saturday, December 09, 2006

Online BEAR first look

So I'm reading through the latest SLD News Brief about the online BEAR form. blah blah blah, then I read "If you need to review your previous invoices (paper and online), use the Bulk Download feature on the online BEAR."

So I logged right in to check that out. Did I space out during the part of the SLD training where they mentioned that you could use the Online BEAR tool to look at old BEARs? It's very handy for me to be able to look at old BEARs. Now if I could just grab all that data across all my clients. That's one of those features that I would like, but can't expect, since it would help consultants, but not individual applicants, and the SLD should stay focus on making things easier for applicants.

Something seems to be wrong, though: I don't see the approval status, neither online nor in the download. I checked a couple of different clients, BEARs that were approved, BEARs that were denied, and none of them showed the approval status.

Still, though, what an unexpected bonus.

Friday, December 08, 2006


Ever notice how if you "Submit a Question" at the SLD, the email response comes with an email address of It's a common practice for companies to have an email address like that when they want to avoid replies, but in this case I find it exceptionally apt, since the notes that I get are usually no reply at all to my question.

This used to get me burned, until I realized that the folks at the SLD don't have the answers to most of my questions, since they have not been given the answer by the FCC. So in a way, it is more honest for them to quote back some rule that I know than to try to actually answer my question.

Today's example was really bad, though. I asked about co-location and maintenance of co-located servers. My questions were specific yes/no questions. The response?

"Thank you for your inquiry. Here is a direct link to the Eligible Services List:"

That's it. And that response took 24 days to deliver. It took several deep breaths before the urge to send a snitty reply passed.

It would be much better for the SLD to say: "We have no specific guidance from the FCC on co-location. In the past we have denied funding requests for co-location, but none of those denials has been appealed to the FCC. If you apply for funding for co-location, your request will be denied, but we cannot predict what would happen if you appeal that decision to the FCC." That explains the situation much more clearly, and avoids the applicant sending more and more emails seeking clarification that the SLD cannot provide.

Wednesday, December 06, 2006

Web hosting eligibility rumblings

I hear a rumor that the SLD is going to start doing cost allocation for Web hosting the same way they do it for servers. Ick.

First, I have to say that the SLD has to do something because of the "value-added" Web hosts have been providing unrealistic cost allocations.

"Value-added" Web hosts are a good thing: districts pay extra to get a prefab structure for their content. You want teacher homework pages? OK, here are some templates to choose from, and the permissions scheme is set up to allow teachers to publish only to their own pages. Sports schedules? Yup, there's a module for that. So these value-added Web hosts make it easy to have a current, useful Web site. Many of my clients use them, and most are very happy.

But let's get real about the cost allocation figures. Go to any normal Web hosting site(1&1, GoDaddy, etc.), and the costs range from $3-$30 per month, depending on features, etc. You would be hard-pressed to find a hosting plan that costs more than $20 without ineligible features like databases, e-commerce, etc. That's $240 per year.

Meanwhile, the cheapest value-added host I've seen is $2400 per year. Some are running well over $10,000. [Hey, if that's what it takes to get staff to update the site regularly, it's worth the money, and a lot cheaper than hiring a Webmaster.] So the vast majority of the cost comes from the content management system and the service, right? But the value-added hosts claim that 84%-100% of the cost is for Web hosting. I guess the SLD has finally had enough of that.

This new cost allocation guide isn't good, though. They're saying that if you offer a combination of eligible and ineligible services, you divide the number of eligible services by the total number of services. Most value-added Web hosts would be 50% eligible: 1 eligible service (Web hosting) and 1 ineligible service (content management). If they also offer email, now they're 67% percent eligible, since they now have 2 eligible services.

So why is that bad? Well, for one thing, 50% of some of the more expensive value-added hosts is still too much. For another, it makes ASPs 50% eligible. Schools that are paying for Web-based fiscal systems would be able to claim 1 eligible service (Web hosting) and 1 ineligible service (application hosting). Now a $30,000 piece of software with a hosting cost of less than $1,000 will be eligible for E-Rate funding on $15,000 of the cost.

A better solution? Perhaps the brightline that the FCC has mentioned, but never implemented. Give a school district E-Rate funding on up to $1,000 for Web hosting. Or to reduce the howls from the larger districts, make it $1 per student. That way the E-Rate doesn't end up paying for lots of Web-based applications.

Thursday, November 30, 2006

End of an era

I hear that Phil Gieseler is leaving the SLD. I can't say I'm happy about that. I often disagreed with Phil, but I always appreciated that he was willing to explain his thinking and to listen to mine. (Or at least appear to listen.)

But what I remember Phil for best was the epiphany he gave me at the beginning of my consulting career. After having submitted applications for school districts for years, I had, shall we say, an ill opinion of the SLD, finding them capricious and intractable. Then I went to the old "Train-the-Trainer" session in DC. (For those new to the program, training used to be given to 4 representatives from each state who were then to turnkey the training to the applicants in their state.) I remember when Phil got up to give his presentation, I was all excited. Here was the guru of eligibility, the ultimate arbiter of appropriateness. Finally, I could get straight answers to my many questions on eligibility, straight from the horse's mouth.

But then in his introductory remarks, he said something like: "I think I have a pretty good handle on the FCC's thinking on eligible services." My jaw dropped, and my spirits fell; where could I get answers to my questions?

Then the scales fell from my eyes, and I finally understood: the SLD was not making capricious decisions, they were just trying to figure out what the FCC wanted. That one sentence changed my whole approach to the SLD. The SLD is not the enemy, they are just trying to do what the FCC wants. They cannot give straight answers to simple questions unless the FCC has given that straight answer, and like me, they are groping in the fog. The SLD doesn't get to make the decision they think is right, they follow the rules set down by the FCC as best they can. No longer do I try to convince them that I am right. Instead, I try to convince them that the FCC wants whatever it is I'm asking for. And now I have a nice relationship with the SLD, and I like my job better.

So thanks for that, Phil. That one sentence was more important to my understanding of this program than anything you could have said about eligible services. You made my professional life much more pleasant. Best wishes.

One thing I've been wondering since that fateful Train-the-Trainer: were Phil and Sam Waterston separated at birth?

Wednesday, November 22, 2006


Just when it looked like the FCC was going to let us get away with anything, we get the Kan-Ed decision. While the FCC was able to say they partially granted Kan-Ed's appeal, in reality they affirmed the unfortunate rules that exist concerning consortia, and gave Kan-Ed some time to get their house in order. Saying they granted Kan-Ed's appeal is like saying the Ysleta decision granted the appeal, just because the applicants got a do-over.

I don't think the decision is wrong, but it does continue to encourage the opposite of the behavior that the FCC wants. The FCC has stated from the beginning that it wants to "encourage schools and libraries to aggregate their demand with others to create a consortium with sufficient demand to attract competitors and thereby negotiate lower rates." In fact, the E-Rate rules do just the opposite. Whenever I get a client which is part of a consortium, I encourage them to break up the consortium. The E-Rate rules make it significantly more difficult to apply as a consortium than as a passle of independent entities.

I don't have a solution, though. (Those of you who have been reading this blog for a while must be surprised to hear me admit that I don't have all the solutions.) The LOAs used to be kind of pointless, since all a consortium really does is use its members NSLP numbers, and that doesn't seem to be a problem. LOAs address a problem that doesn't exist. The fraud in the program is by service providers, usually with some applicant complicity (or at least applicant ignorance). Of all the consortia I know, I can't imagine any trying to defraud the E-Rate, because there is no one in a consortium that would be able to benefit personally, and personal benefit is the only reason that fraud happens.

But now that we're stuck with the 2-in-5 rule, a consortium can now burn those years for its members. LOAs are a poor instrument for warning applicants about that possibility, but they're better than nothing.

The Jason rule

Here's my mask for next Halloween. It will certainly scare E-Rate applicants. The "two-signature/two-date" (2s/2d) rule is like Jason in the horror movies: every time there is an FCC ruling, I think it's dead, but it just keeps coming back. I thought the FCC killed it with the Richmond County order. But it still came back. Then I thought it got the wooden stake in the Gayville-Volin decision. But now I read an appeal which includes a letter from the SLD invoking 2s/2d on October 25, 2006.

I'm no expert on the Jason movies, but a quick IMDB search reveals that the 10th in the series (not counting Jason v Freddy, I think) takes place in space 500 years after the series "finale." Let's hope 2s/2d is not so tenacious.

I guess what we need is for the FCC to explicitly tell the SLD that a valid contract is a valid contract, regardless of how many dates are written on it.

Tuesday, November 21, 2006

I'll see your remand and raise you

I love a juicy appeal. I never write appeals that are fun to read; mine are as respectful as I can stand to be, because of the whole honey/vinegar thing. And most applicants who file their own appeals are the same, coming to the FCC as a supplicant. But man, when the lawyers get involved, they sling around words that the rest of us find rude, and just hammer their points home over and over, casting everything in black (the SLD) and white (their poor, agrieved client). Always over the top.

What appeal got me going? The recent SEND Technologies appeal. It's full of words and phrases like 'unconscionably," "infirmities," "ignored the facts," "cannot be trusted to make fair and impartial decisions," "unalterably closed mind to the facts," and "students should no longer be made to suffer because of USAC's myriad failings." Fun reading.

Some interesting tidbits:
Is the Cynthia Schultz who filed the appeal the same Cynthia Schultz who was working for the SLD when these applications were originally denied? She wouldn't have had anything to do with the denials, I think, but it is an interesting note.

SEND claims that over the 5 years that the appeals have been going on, over $1,000,000 has been spent on legal fees. Gadzooks.

Pure speculation:
I'm wondering if the SLD is finally fed up with the FCC clearing their ginormous appeal docket by remanding every appeal in sight, often with little guidance on how to handle the case, but with tight deadlines. Oh, and no extra funding for USAC. The FCC remand order in this case said that "pattern analysis" was not sufficient evidence of improper service provider involvement in preparing the 470, but did not say what would be sufficient evidence. I wonder if the SLD just did a quick investigation and batted the case back into the FCC's court, hoping that the FCC would decide the case rather than re-remand it. Or maybe they just decided that with the resources they had, a real investigation of the matter was not possible in 60 days.

So what's the FCC to do? Perhaps send some OIG folks down to Louisiana to do a full audit of the applicants? Or an audit of the service provider? I can't recall a service provider ever being audited. Which is odd when you look at the list of debarred people and organizations; not too many applicants in that list.

Friday, November 17, 2006

Hurray for New Hampshire!

Kudos to the NH Dept. of Ed. They have provided a resource that every state should provide, and the SLD as well. They have provided a list of exemplary tech plans.

At every opportunity I get (which is not many), I have asked the SLD to post good and bad examples of tech plans. They don't have to be real plans, and they could scrub out district names if they had to, but I would think that any district would be happy to be the poster child for good tech planning. Even better, the SLD could annotate the plan (the way my high school teachers annotated my essays).

A couple of years back, I actually started to compile a Board of Shame: I asked the USAC auditors to send me audit results for some districts that had failed audits due to their tech plans, and started to compile negative examples of tech plans. But I stopped before I completed the project because I realized:
  1. tech plans are really boring, and
  2. I needed to focus on work than someone was actually going to pay me for.

But someone should do that work.

Thursday, November 16, 2006

No tech plan? No problem!

Another day, another appeal granted. Ho-hum. Two (mildly) interesting parts:
  1. The appeal was filed July 18, 2002. It's been sitting at the FCC for 4 years. Amazing.
  2. The FCC waived the tech plan requirement. I think this is new territory. And the FCC stuck to its new standard for appeals: No waste/fraud/abuse, no foul.

Wednesday, November 15, 2006

2-in-5 Tool not the sharpest in the shed

Actually, I think the new 2-in-5 Tool is pretty good, but I couldn't resist the catchy title. Pretty good, but I don't see myself using it that much. I'm sure I'll find uses for it, but it would be a lot more useful if:
  1. I could put in a district BEN and see the information for all locations in that district. I know I can put in the list of entity numbers in the little box, but in the time it takes to do that, I'll go to a query in my own database and get much more useful numbers.
  2. "Funded" and "Eligible" didn't have the same green background. Knowing which years were funded is very important. If anything, make "Not requested" and "Eligible" have the dark green, and give the light green to "Funded." Even better, give "Funded" a nice mauve background.
  3. The browser "Back" button worked. (What does the SLD have against the "Back" button, anyway? All over the site, you try to go back and it just won't let you. ) At least it has "cookie crumb" navigation links above the table which allow you to go back to the previous screen.
  4. We could see more than 10 rows per screen. A minor nuisance for small districts, but a major pain for any large school district. And who would need a tool like this most? A large school district. But since they can't use the district BEN to pull up all locations, the tool is already hamstrung.
It's nice, though, to see the SLD put up a tool which is designed solely for applicant convenience and actually uses color and visual layout to convey information, rather than large blocks of impenetrable text. Now if they'd just gotten a visual design professional involved, maybe we'd have the mauve background. Can you tell I have a soft spot for mauve? Not the color, just the word.

Tuesday, November 14, 2006

E-Rate important or unused

I just got an email from E-Rate Central with a link to a survey of ed tech done at the T+L conference this year. Of course I skimmed everything until I reached the E-Rate questions.

So how important is the E-Rate? Over 40% of the respondents said "very important." And that's why the E-Rate has survived 6 years of a hostile President and Congress; the typical Congressman would have to show real fortitude to cut a program that's helping so many kids in her/his district.

But more interesting: almost 20% of attendees said they don't apply. Understand, this is a technology conference. Luddite districts do not send teams. Any yet, among these tech-savvy districts, 20% don't apply. That is a shame. The process has to get easier. Either that or I need to improve my marketing efforts until On-Tech is managing the E-Rate for all those districts.

There was also a question about improving the E-Rate, and I was surprised to see that one-third of respondents thought sanctions against wrong-doers would improve the program. Real abuse of the program takes a tiny fraction of the funding, so if every ne'er-do-well was thrown in jail, we really wouldn't see any positive effect for the rest of us. I don't even think that the amount of fraud would go down: in most cases, the people who have been caught thought they had come up with a new scam that would work.

Also, I'm not in favor of punishing people who make mistakes, and then you have the difficulty of saying what's a mistake and what's a scam. Take the Ysleta case, where IBM and several school districts (including Ysleta) created a purchasing process that they thought complied with E-Rate rules, but allowed them to avoid the traditional competitive bidding process. I don't think the people involved thought they were scammers; they were just trying to do what was best for the district given the E-Rate's bad bidding rules. Yet looked at another way, districts colluded with a vendor to subvert the competitive bidding process. And since they got away with it one year before the SLD figured out what was going on, you could say they were repeat offenders. I think it would have been a shame for Ysleta or IBM to have suffered sanctions. So how can we draw the line?

The answer is, just the way it's being done: you get convicted of defrauding the program, you're out. I think debarments should last for 10 years or more, instead of the measly 3 years that's being handed out now. But I don't support a separate set of sanctions.

Wednesday, November 08, 2006

We want BEAR notification letter diversity!

So how come 470 RALs, 471 RALs, FCDLs and 486 RALs are all multi-color (which I love), but Form 472 (BEAR) Notification Letters are all white? I'm sure the practical reason is the Billings and Disbursements is separate from the application side of the house, but couldn't they get together on this one thing? I mean, otherwise the letters look the same: impenetrable walls of monospaced text with no sense of design.

Thursday, October 26, 2006

Death of the 30% rule?

Check this out from page 22 of the Eligible Services List, under the "Cost Allocation" entry: "When no cost allocation is provided for funding requests that require cost allocation, USAC will contact the applicant to request such cost allocation."

That seems to fly in the face of the 30% Rule, which says that if USAC finds that ineligible services make up more than 30% of a funding request, the whole request is denied. This ESL says that if USAC finds any ineligible services, they have to contact the applicant and request cost allocation.

Good riddance, I say. Whenever I do presentations and I explain the 30% Rule, attendees' reactions range from disbelief to outrage. Just because you made a mistake and included something that's not eligible, you lose all your funding, for eligible and ineligible items?

And don't give me the "administrative convenience" argument. OK, I agree that it would be heinous if applicants just starting throwing everything including the kitchen sink onto a 471, and made the SLD sort it out, but really, are applicants going to do that? And what's to stop them from putting the kitchen sink in its own FRN? The 30% Rule only hurts innocent applicants who have no idea they're requesting ineligible items.

And it doesn't save the SLD any work. How does a PIA reviewer invoke the 30% Rule? By calculating the cost of the ineligible services. Since s/he has already figured out the value of the ineligible items, it is not really any extra work to just reduce the funding request.

Now if we could just get rid of the "2-in-5" rule.

Wednesday, October 25, 2006

ESL at last

So the Eligible Services List is out at last. The FCC did some good things.

First, VoIP is eligible. Now schools can get E-Rate funding for Vonage. Actually, what seems more likely to me is schools getting local service with no message units through their ISP.

Blackberries are eligible. Now districts can rethink their wireless plans, since they can now get E-Rate funding for wireless Internet service for their mobile devices.

Web hosting looks to be more restricted. The new list seems to be much more restrictive on what's allowed as Web hosting. An entire industry has popped up to provide value-added Web hosting to schools, and the E-Rate has helped. If the definition of Web hosting is narrowed, look for that industry to implode.

More tomorrow.

Saturday, October 07, 2006

Where's the color?

Let me start by saying that I hope the SLD employee that came up with the idea of a different color paper for each program year got a big, fat raise for that brainstorm. And I hope the employee who decided that white should be one of the colors got a reprimand.

So lately all the correspondence from the SLD has been on colored paper, but in a white envelope. Don't like it. For starters, it's aesthetically upleasing to have the yellow paper peeking through the windows of a white envelope. And it was nice to be able to glance at a stack of mail and see if there was something from the SLD.

I'm holding out hope that they decided to take white paper out of the color rotation, so now they're using up all the white envelopes that were lying around.

I think I need some more leisure time. It scares me a little that I'm even thinking about envelope color and what it might mean. I guess after all these years, I just reflexively try to guess what the SLD is up to.

While we're on the subject of correspondence from the SLD, I have two things to say: white space and fonts. The SLD letters are dense blocks of courier type, with no variation of font size. As part of Mel Blackwell's drive to make the correspondence more user-friendly, I hope they have someone with layout experience look at the letters. They need to go to a proportional font (like Times), leave more empty space on the page, and use different font sizes to create section headers. But please, no clip art, no matter what the layout experts say.

Friday, October 06, 2006

More outreach

The SLD is piloting a new outreach program. So far, they’ve only visited two districts, and one of my clients happened to be the second one.

In the pilot phase, they are looking at applicants who had trouble getting funded for a couple of years, then did get funded, and asking them what turned the program around for them. It was a big team: three SLD staffers, two reviewers from BearingPoint, and one other guy whose title I didn't catch, but I think was also from BearingPoint.

There was no investigation of compliance, no documentation required, just questions about what was difficult for the applicant, and how they managed to turn the process around, and what could the SLD do to improve the process. They wanted to talk to anyone in the district who had been or is currently involved in the E-Rate application process. The interview was pretty unstructured (again, perhaps because it was a pilot).

I hope this will turn into a full-blown outreach program, because it looks like it has nothing but an upside for applicants. My understanding is that it will expand to districts that are currently having trouble, so the SLD can help them directly. Excellent news for districts having trouble, but perhaps not so great for those of us who make our living helping districts that are having trouble.

Saturday, September 16, 2006

A new 2-in-5 rule

So I was looking at the Debarments list, thinking about how you can defraud the government every 3 years since the debarment is only 3 years long (unless you're a large corporation and you're really, really sorry, then it's only 6 months). And it occurred to me: maybe they should make allowances for large, multi-year frauds and create a 2-in-5 rule.

New forms a-comin'

What's this new news item on the SLD home page? New versions of all the forms (except the 470 and 471)?! Oh, it's just "slight modifications," which, of course means more certifications. If this trend continues, I'll have to find a new job when some new certification includes the phrase "first-born child."

The FCC is accepting comments, though, and that's hard to resist. (Anyone who would start a blog on something as boring as the E-Rate must have a very high opinion of his own opinions.) So here's my suggestion: dump the 486.

But what about the CIPA certs? Move them to the BEAR and SPI. Of course that would mean that applicants would have to certify the SPI (just as service providers have to certify the BEAR), which would be a prudent measure to prevent waste, fraud and abuse. Think about it: public servants who submit a BEAR requesting reimbursement to a public entity (which has been approved by the state DOE or State Library) have to get their request approved by the service provider, but any company can submit a SPI, and they get funding, no questions asked.

And yes, this has created fraud. Qasim and Haider Bokhari are both on the Debarment list, an elite club of 10 people (like the FBI Most Wanted, only more boring). For those of us who like to create meaningless statistics, fully 20% of convictions for E-Rate fraud could have been prevented by having applicants counter-sign the SPI. (Assuming that anyone actually read those forms, which is a bad assumption.)

However, I'm not sure I can bring myself to propose something that will increase the paperwork for applicants, and delay the invoicing process. So maybe we move the CIPA certifications to the 471, where they wouldn't even be noticed among the 14 or so certifications that are already on that form.

Word to the wise: don't put the draft forms on the Required Forms page next to the real ones. You just know a few confused people are going to use them (meticulously whiting out the "DRAFT" watermark), then the SLD is going to be forced to deny them, and the appeal will go to the FCC, which will whip out its "waived" rubber stamp and remand it, then the SLD will approve it, only now it's six months after the funding year is over and nobody's happy.

Friday, September 15, 2006

Another mass waive

Another FCC ruling, another massive wave of waivers. Only 128 applications covered this time, for late or misfiled 486es. Two reasons I'm feeling happy.

First, Paragraph 8 requires something I've been asking for: the SLD has to notify applicants that a 486 is overdue, and give them a chance to file it. It's always been a sore point with me that the SLD can see in its database that a 486 is coming due, or is overdue, and they don't do anything to let applicants know they're about to lose funding. Some state E-Rate coordinators, like Julie Tritt Schell over in PA, were notifying applicants at risk, and I was doing it for NJ schools when I had the time, but it's nice that the SLD will be doing it for all applicants.

Second, it's made me nostalgic. This decision grants the first appeal I ever wrote (back in 2004, for a school that was in a mess when I arrived). At least I think it's the first. It certainly looks amateurish enough. And I remember when we filed it, I told the applicant not to expect anything, because the FCC never grants appeals. How times have changed.

My favorite parts of the decision: footnotes 35 and 36.

#35 makes it clear that as long as an applicant is making its best effort to respond to the SLD, the 15-day response time is to be extended. The SLD has always been lenient, but it's good to have the FCC explicity state that the SLD is not obligated to deny applicants on the 16th day.

#36 removes a worry that I had: that the FCC was going to grant these giant waivers, then go back to the old "deny, deny, deny" mentality. This footnote implies (I think) that the FCC will continue to give waivers.

Friday, September 08, 2006

Reason #1 to file online

Here's the one fact that should make you file online:

80% of Forms 471 filed on paper are rejected.

So if you file on paper, it is very likely you will be rejected.

File online.

Reason #47 to file online

Yet one more reason to file the 471 online: if you are filing, and an FRN is likely to run afoul of the 2-in-5 rule, a box will pop up with a warning.

There will also be a new 2-in-5 tool that allows you to see where each of your locations stands in terms of the 2-in-5 rule. It won't be available to the public, and it's not going to be all that useful for applicants, but it's a pretty slick tool.

Undo button for 2-in-5 rule

Coming to you live from the SLD training in DC, I have a few things to write about from yesterday.

First, in the presentation about the 2-in-5 rule, I learned that applicants can cancel an FRN (or pull one school out of an FRN) at any time, even after funding is received. Of course, if you've received money, you have to give it back. This is great news for applicants that don't understand the 2-in-5 rule (and won't until it bites them) and have burned one of their years to buy a $1,000 router. Now they can give the funding back and get that year back.

More waiving

The FCC released another waiver. This one is for a district that says it filed its 486, but SLD lost it. Another waive/remand decision is no longer news, but I found two things interesting. First, it was a 486 decision. Some of us are awaiting a blanket 486 decision covering the dozens of pending 486 deadline appeals, so it's surprising to see a one-off decision like this. Second, the decision came 28 days after the appeal was filed. I can't remember that fast a turnaround. I'm thinking maybe the FCC is trying to push slam-dunks through quickly.

Thursday, August 31, 2006

Creaky Adobe

Today I'm setting up my new laptop (the kids, who get the old one, are the most excited about it). It amazes me that I have to dig up a copy of Adobe Reader 5 in order to make USAC's online forms appear correctly.

When will those forms be updated? Even better, chuck the proprietary format, and just use Web forms, like the Form 470.

Adobe Reader is on version 7, and I think when they get version 8, then v5 will no longer be available for download. I haven't read anything on when to expect v8, but the last two versions came out 22 months apart; it's been 20 months since version 7 was released.

Wednesday, August 23, 2006

Ruthless Red Light

One of my clients has Web hosting supplied by TeacherWeb, and the SLD has reversed itself and decided that this particular type of Web hosting is not eligible for funding. A Commitment Adjustment was made for 2004-2005 and 2005-2006, taking away all funding. I appealed that decision to the SLD and the FCC (since two funding years were involved, there were two appealable actions, so I appealed one action to each of them).

But appeal or no appeal, you still have to pay the money. So now the district has to return the funding and wait until the appeal is approved, and then get it back. That wasn't a big deal last year, when the FCC dealt Scroogishly with appeals, but now that the FCC is acting like it's had a visit from the ghosts of Christmas past, present and future, it seems more fair to have the payment requirement suspended until appeals are resolved.

Friday, August 18, 2006

The wooden stake?

Four more appeal decisions today: granted, granted, granted, granted. The synopsis:
School Administrative District 67: SLD asked for the tech plan for the "wrong" year.
Gayville-Volin: A single printed date with two signatures is OK.
Douglas-Omaha: Tech Director quit, so no one did the 486: forgiven.
Zapata County: Tech Facilitator was in Iraq, couldn't respond to PIA: that's OK.

If I worked for USAC, I'd be steamed about paragraph 7 of Zapata, which starts: "Furthermore, it appears that Zapata County may have provided the information in question when it filed its appeal with USAC. While we do not make a finding here as to whether Zapata County has provided all requested relevant Item 21 Attachments, we find that USAC should review the information in its possession to ensure that it actually requires additional information from Zapata County to process its application." If USAC had enough info, the FCC should say so; if not, why ding USAC? I'll bet USAC would have loved to have the FCC say: "The [whatever] supplied by Zapata County was sufficient to demonstrate [whatever]," instead of "may have" and "we do not make a finding."

But the decision that could be interesting is Gayville. When the Richmond County order came out, I declared the death of the "two-signature/two-date" rule; the FCC said a contract with one date is OK. But the 2s/2d rule would not die; USAC took the position that the decision only applied to that one contract.

Could Gayville be the wooden stake in the heart of 2s/2d? The FCC has said once again that a contract with a single printed date and two signatures is a valid contract, and cited Richmond County as precedent. Will it be enough for USAC? I wish the FCC would come out with the explicit statement: "Two handwritten signatures are not required." Or publish an erratum to the Fifth Report and Order, striking the words "and dated" from the phrase "signed and dated by both parties," which gave birth to 2s/2d.

Thursday, August 17, 2006

The FCC denied an appeal!

Two FCC decisions were released yesterday: Providence ( and Academia Discipulos (, which covers 30 appeals.

No surprise, in both cases the FCC sided with the applicants and remanded the funding requests. But wait! One of the 30 appellants in the Academia Discipulos decision was denied! This hasn't happened for months.

The Providence decision doesn't look interesting to me: a vendor put "network monitoring" and monthly reporting in the preamble to its bid, but not in the later section on specific services to be provided.

This stuck out, though: both vendors in the Providence case "maintain that network monitoring and configuration management are not part of their basic maintenance contracts." So don't hire them. Monitoring should be part of any maintenance contract, except under the bizarre rules of the E-Rate. I routinely have to scrub it out of contracts, because every vendor I can think of includes it as part of their standard service. It sounds like Providence and their vendors scrubbed it out, too.

Academia Discipulos deals with competitive bidding violations from Funding Year 2003 and earlier. Apparently USAC applied the bidding requirements from the Ysleta Order, and the FCC said that the standard in the Tennessee Order should be used, since the cases took place before the Ysleta order took effect.

That's a little funky to me. The Ysleta Order denied applications because it said they did not meet competitive bidding requirements. Nowhere in that order does the FCC says it changed the requirements (the ordering clauses at the end make no changes to the regulations). So it seems to me that the requirements in the Ysleta Order have always been the requirements, and that the Ysleta Order merely applied the existing requirements to particular cases (and in doing so, clarified the requirements a bit). In fact, paragraph 72 starts: "We recognize that in certain instances, our rules and past decisions did not expressly address the circumstances presented here. That, however, does not preclude a finding that there has been a violation of our competitive bidding rules." And I think that's been USAC's take, too. Now the FCC is saying that the requirements changed in 2004.

Here's another way to look at it. Ysleta denied applicants in Funding Year 2002, because they violated program rules. The Academia Discipulos decision says that the Yselta standard does not apply to any applications before FY 2004. Huh? That would mean that of all the applications filed before FY 2004, the Ysleta Order applies only to those applications named in that order. I'm not a lawyer, but if I were, I think I'd be contacting IBM (which I think was the vendor in all the cases in the Ysleta Order).

Monday, August 14, 2006

Undetectable deluge

Now I'm steamed.

I just got a batch of emails from PIA with the same purpose: getting written confirmation from me that there are no clerical or ministerial errors in my 471s. The emails all state that PIA couldn't detect any errors, but they want me to confirm it.

My first gripe: The email states: "It is your responsibility to review your Form 471 application and provide corrections to us. " Wrong. The Bishop Perry order states: "USAC shall inform applicants promptly in writing of any and all ministerial or clerical errors that are detected in their applications, along with a clear and specific explanation of how the applicant can remedy those errors."

My second gripe: Applications are going to be held up until I respond.

I just don't see the purpose of holding up applications. If PIA hasn't found any clerical or ministerial errors, then the applications are going to be funded, right? Why do I have to confirm again that there are no errors? My fear is that if an error is detected later, the SLD will try to say, "Sorry, the 15 days have expired." But that's not what the FCC said.

Disclaimer: As I've said ever since the FCC's Grinch-like transformation, I wouldn't want to be the SLD. Perhaps there is some other reason that the SLD needs me to reconfirm that I can't see any errors in my applications.

Undetectable errors

I took a couple of days off last week, so I'm just now reading the latest PIA requests. Since Aug. 11, there is a new section in the boilerplate. It says: "The following items on your Form 471 may contain errors, but we were unable to detect them during our review process:" and then lists all the areas on the Form 471 that might result in denial, and finishes with: "If you detect any errors in these items, you can make corrections during the next 15 days."

When I read the FCC's instructions in the Bishop Perry Order, I wondered: "How is USAC going to do that?" I guess this is the answer. I'm worried that USAC thinks that by listing all the important areas in the application, it is off the hook to later let applicants know if they discover a problem. I think that's wrong.

The spirit of Bishop Perry, it seems to me, is this: USAC shouldn't deny applications without telling the applicant that they are about to deny the application, then giving the applicant 15 days to fix whatever problem there is. I've told anyone who would listen that USAC should operate that way to reduce appeals and delays. Just tell people flat out: "On [date] we intend to deny your application for the following reason: .... If you don't want to be denied, please do the following: ...."

For the serious E-Rate wonks, there are some tea leaves here. Block 2 is left off the list of places to look for undetectable errors, which is the closest I've heard USAC come to acknowledging that the numbers in Block 2 are of no importance in getting an application approved.

On the other hand, "Block 6 – Amount budgeted for ineligible services" is on the list. When that onerous and meaningless* requirement was added to Block 6, I asked point blank at the "Train-the-Trainer" if any applications were going to be denied based on the number entered, and the answer was no. I guess now maybe the answer is yes.

*Tirade alert! Yes, the Item 25 number is meaningless because there is no way to calculate it accurately:
  1. The instructions are vague. "The resources that are necessary for you to support and improve education and library services and to make effective use of the eligible services"? What does that mean? Does "Professional Development" include in-service days on subjects like the district's new IEP system, which is not itself eligible, but which runs over the Internet? Does a district include the cost of the staff salaries for that day?
  2. How do I know what's "necessary"? You'd be crazy to run a network without anti-spam and anti-virus, but the FCC keeps them off the Eligible Services List, so are they "necessary"?
  3. Districts don't track expenses according to their E-Ratability. Who knows how much of the electricians' time was spent installing and maintaining circuits that were required "to make effective use of the eligible services"? (You could drive yourself crazy: should you count the cost of removing asbestos in order to punch through the wall so that you can install an electric circuit to run air conditioning in computer labs to keep ineligible desktops from frying, because those ineligible desktops are necessary to access the Internet?)

Tuesday, August 08, 2006

Time for appeals shortcut?

I recently had a case for appeal. I think the SLD made an error (though I doubt the SLD will agree), so I sent an appeal to USAC first, figuring there's always a chance. But I'll tell you, the new mood at the FCC almost made me skip USAC and go right to the FCC. Nine months ago, I felt like appeals generally had a slim chance with USAC, and no chance with the FCC. Now I think the chances with the SLD are still slim, but the FCC seems to be waiving rules for everyone.

If the FCC continues to be so lenient, I foresee applicants foregoing the 3-month wait for a USAC appeal decision and skipping right to the FCC. I can foresee myself doing it if current trends keep up.

Thursday, August 03, 2006

Ho hum

Two more FCC appeal decisions were released yesterday: Utica, granting a waiver for a 471 filed too late; and Hickory II (since this is Hickory's second appeal decision this year), granting an appeal for non-response to a Selective Review request.

Nine months ago, I would have been all atwitter; the FCC almost never waived deadlines, no matter what the excuse. My reaction today: "Ho hum." It really feels like any denial that doesn't involve waste, fraud or abuse is going to be remanded.

Thursday, July 27, 2006

Bishop Perry costing us

When I read the Bishop Perry Order, I thought, "Great!" Then I thought, "That's going to be expensive!" And now the price tag is in: $3.5 million for this quarter. You've got to figure the cost will go down in future quarters, but I'm thinkin' at least $8 million/year. But I think it's worth it, because it will make the program seem much less capricious to applicants.

Training: there's hope

Two other pieces of news from the USAC board meeting: first, the SLD is going to hire a Training Program Manager. At least it will be good news if it is a sign that the SLD has realized that more attention needs to be paid to training. It won't be good news if it just means there will be someone spending their whole day managing the current meager training budget.

Second, the San Diego training sold out in 3 days. That's the 7th training date, and the really eager people from CA were probably signed up elsewhere, and it still filled up in 3 days. The SLD needs to have a lot more dates. The problem is that it must be tough on the SLD folks to do all that traveling. The solution: Webinars. They are far from ideal, but really, a lecture to 200 people is not interactive. We were not encouraged to ask questions as we went along, and an awful lot of the questions we sent in on those little yellow cards never did get answered because time ran out. But with Webinars, you wouldn't have to do a 1.5-day, one-size-fits-all presentation. You could do a series like the one I ran last year. One- or two-hour seminars on a narrow topic. Something like this:
August: E-Rate overview for applicants
September: Technology planning
October: The Form 470 and competitive bidding
November: E-Rate overview for service providers
December: The Form 471
January: Item 21 Attachments
February: Getting a SPIN and filing the SPAC
March: The PIA process
April: SPIN changes and service substitutions
May: Appeals
June: The Form 486 and CIPA
July: Invoicing for service providers
August: Invoicing for applicants

Maybe also some time in September a workshop for E-Rate vets about recent changes.

What's in a name?

The best name for a department at SLD: the "Dunning & Good Samaritan Unit." I mean, that name has it all: a biblical reference, the word "dun," which we don't see often enough, and a wonderful good cop/bad cop juxtaposition of functions joined by an ampersand and the word "unit."

Hey, it's a blog. Shouldn't I have a completely frivoulous post now and then?

Tuesday, July 25, 2006

"New" VP: thumbs up!

So I've been checking the front page of the SLD Web site to see if they announce the comment period for the Eligible Services List. Still nothing.

But I did see an announcement today that Mel Blackwell has been named by the USAC board to VP for the Schools & Libraries Program. I don't think that's front page news, since the name of the VP doesn't matter a whit to 99% of applicants; they'll never have direct contact with him. And he's been the interim for what, a year already? So it's not really news. But I guess there isn't a Business section on the SLD Web site, so the front page it is.

I'm happy to have him as VP. I don't know if he's a good manager or not, but here's what I like about him: every time I've heard him speak, he's used the phrase "customer service" over and over. It struck me the first time I heard him say it, because it was so at odds with the experience of most applicants. He says it often enough that when I heard him talking this week, I actually noticed when he missed an opportunity to say it. If I were playing "meeting bingo" (where you pass time in a meeting by making a bingo card with an overused word or phrase in each box and Xing out boxes as people say the words and phrases in them until you have bingo) at the SLD, if the VP were going to be in the meeting, I'd definitely want "customer service" on my card.

And that's a good thing. In my mind, one of the tasks of an executive is to affect organizational culture. And I think it has great effect for him to characterize the SLD's relationship with applicants as "customer service." The repitition is important in changing the way people think. And I think I've seen a change in attitude at the SLD (and Solix, the subcontractor that runs PIA). Not that I've had many problems in the past, but I sense a shift in my dealings with PIA: I am the customer.

Or maybe Mr. Blackwell's repitition has changed my perception.

Monday, July 24, 2006

The ESL is here!

At today's Schools & Libraries Committee meeting, Mel Blackwell brought us all good news: the proposed Eligible Services List for 2007-2008 was released on Friday. I just took a glance at it, so I don't have any comments, except that it has slimmed down from 74 pages to 45 pages. Excellent! The layout is a bit better, too. I'm sure I'll have more to say after I read it.

The comment period ends August 4th, a full two weeks. An improvement over last year's 7 days.

Let the comments begin!

Friday, July 21, 2006

VPNs clarified

The latest News Brief from the SLD had some useful info about VPNs: a point-to-point VPN is apparently eligible as a telecommunications service, but not as Internet access. I say "apparently" because the FCC could overrule the SLD or otherwise muddy the water.

My reading was that VPNs were telecommunications, but were "IP-enabled telecommunications," which means they wouldn't be eligible. Of course, now that the FCC has VoIP providers paying into the Universal Service Fund, perhaps the ban on IP-enabled telecommunications will be lifted. If so, I'd look for a gold rush into the education market by the VoIP carriers, which means a slew of responses to all 470s which list telecommunications services.

Where is that Eligible Services List, anyway? By my calculations, it should have been released to the public last month, so unless things get compressed elsewhere, I'd look for the FCC to again waive the 60-day period between ESL approval and the opening of the application window, and the application window to again be shorter than the traditional 80 days.

Thursday, July 20, 2006

Remand, waiver, waiver, remand

Is the FCC ever going to deny an appeal again? Yesterday the FCC gave out two more applicant-friendly decisions.

In the first, an applicant didn't get around to sending the information it had promised to the SLD, but the FCC waived its rules and gave them another 15 days. One day soon, we'll see an appeal from an applicant who misses the deadline on one of these 15-day extensions. What will the FCC do then?

The second appeal was the Henkel Order. Seems some funding was approved for the Little Rock school district to get a video distribution system. Then when the vendor sent in an invoice, the SLD took another look at the system and contradicted its own funding approval, and would not pay for a few components of the system. I can't say I like this SLD practice of using the invoice process to double-check their earlier decisions. From the applicant and service provider perspective, it feels like the SLD is going back on its commitment and taking money away from them. It's not really, of course; the SLD is just adjusting its decision based on new information and withholding funding which would likely be COMADed anyway. But there must be a better way. Like having the FCC approve funding commitments, and have them iron-clad, so if an applicant honestly supplies all the requested information, if a mistake is made, the applicant and service provider don't have to pay for it.

Anyway, back to the Henkel Order. I found three things in the order interesting. First, the FCC gave some information on the eligibility of components of video distribution systems, some of which could be extrapolated to training and end-user components for any internal connections system. No earth-shattering revelations, though.

The second thing I found interesting was that the FCC treated the Eligible Services List for 2003-2004 (the funding year in this case) as if it were part of the program rules, quoting from it as the basis for determining eligibility. Until the Third Report and Order, which came into effect starting with the 05-06 ESL, the ESL was a list compiled by the SLD based on what had been approved and denied in the past. It was a good guideline, but I always treated it as an advisory document. Not until the Third Report and Order did the FCC make it a "safe haven" that applicants could count on to be correct.

It was nice to see the FCC treat an older ESL as authoritative. It's comforting to think that applicants can file appeals based on an old ESL, and the FCC will give it some weight.

Not that applicants need to supply much of a basis for an appeal any more; just ask nicely and the FCC will remand your application. Of course, the SLD then gets the unpleasant job of saying no another time if, like in the Henkel case, the application included end-user applications, which the FCC all but said were ineligible. But the case was remanded to the SLD to do the dirty work of denying that funding.

The third interesting thing is paragraph 12, which seems to say that training of end users is eligible as long as it happens near the time of installation and doesn't include programs of instruction or professional development. This is a reversal: in the past, end-user training was not eligible, only training for systems administrators. In the case of a new phone system, for example, you could get funding for training to teach a couple of people how to add extensions, clear voicemail boxes, etc., but you couldn't train end users how to transfer a call or check their voicemail. This decision seems to make that end-user training OK.

I'm all for training, but it creates an interesting situation. The cost of the end-user software of the video distribution system in this case is apparently not eligible, but training people to use that software is eligible.

Once again, I'm glad I don't work at the SLD.

Thursday, July 13, 2006

Appeal flood rising

Well, as I have been saying, the FCC's recent spate of rule waivers has produced a bumper crop of "me-too" appeals.

Sometimes I just get the urge to read what sort of appeals have been filed. I can't figure out whether I do it out of empathy, schadenfreude, or a search for new appeal ideas.

Anyway, there is a definite uptick in appeals, and two really caught my eye.

One said, basically, that a few months ago when we got denied for missing a deadline, we didn't bother appealing, since the FCC never granted deadline waivers, but now that you've reversed course, we're appealing and we also have to request a waiver for not appealing months back when we got denied.

The second one was for a denial a few years back for a missed deadline. The denial was appealed to the FCC years ago, and back then the FCC stuck to the line: "We're sorry that your tech coordinator was sick/B.A. was fired/dog ate it, but a deadline is a deadline." Now the applicant has come back and said, hey, since everyone and their sister is getting a deadline waiver, will you reconsider your old decision?

I can't wait to see how these turn out. And I'm wondering whether it's worth it to dust off some old appeals....

Caveat applicant

Recently a client was caught in the mass COMADing of all FRNs for a Web hosting product called TeacherWeb. I don't see anything about TeacherWeb that doesn't meet the definition of Web hosting in the Eligible Services List, but I've never used the product, and the definition of Web hosting is vague (as I have pointed out during ESL comment periods).

This blog entry is complaining about a general practice in the E-Rate program. If a vendor assures an applicant that a service is eligible, and the SLD agrees it is eligible and approves the funding, if the SLD later changes its mind, the applicant has to pay. Granted, the applicant is really just returning funding improperly received, but it sets up a situation which promotes abuse. Several vendors have deceived the applicant and the SLD by mischaracterizing their product to squeeze it into eligibility. If they can squeeze it past PIA, it doesn't matter to them if the product is later found ineligible, because they've made the sale. The applicant, which relied on the expertise of the vendor and the SLD, is left holding the bag.

A couple of years back at a "train-the-trainer" session, when we were talking about the Eligible Products Database, I asked this question: If a service provider states that it's product is eligible and submits it for the database, and the SLD reviews it and posts it on their Web site, and it's later determined that the product is not eligible, who will pay? The answer: the applicant.

Applicants have no way of knowing whether a product is eligible. The FCC approving the ESL every year is a start. How about the FCC approving the Eligible Products Database?

Of course, I shouldn't be complaining. The complexity, changes and uncertainty in eligibility are a big factor in the growing demand for my services.

"Two-signature/two-date" won't die

I guess I jumped to conclusions in my June 14th post, saying that with the Richmond County decision, the FCC had killed the SLD rule that all contracts must be signed by both parties and dated by both parties. The SLD is apparently still operating under the belief that the FCC requires two dates.

Why did I think the rule was dead? Because the FCC said: "Based on the evidencesubmitted upon appeal, we find that Richmond County had legally binding contracts with Time Warner Cable and eChalk, LLC in place when submitting its FCC Form 471s. In both cases, Richmond County produced contracts that were signed and dated before the certification date of its FCC Form 471s." (paragraph 6)

The eChalk contract had two signatures, but only one date (as is frequently the case, and as is allowed under contract law). In its decision, the FCC did not say that the eChalk contract was defective, but that it was waiving its requirement for two dates. The FCC said the contract was legally binding. Nowhere in the decision does the FCC say, "All contracts with one signature are valid," but it does say this contract with one date is valid. And since the FCC has never said that a contract with only one date is invalid, I inferred that the FCC does not require two dates.

It seems to me that my reason for inferring that the FCC does not require two dates is much better than the SLD reason for inferring that the FCC does require two dates (based on a mention of "signed and dated by both parties" in a list of documentation required for audits).

I also have the impression that the SLD is viewing the Richmond County order as strictly a waiver, but it looks to me like the FCC granted the appeal for the Time Warner and eChalk contracts, and only waived its rules for the Novell contract.

I'm not dissing the SLD, though: I'd rather see applicants get denied and appeal to the FCC and get funded then have them get funded, then later COMADed.

There is hope: apparently there is a pile of "two-signature/two-date" appeals that the FCC is looking at en masse. Perhaps when that decision comes out, it will explicitly state that the validity of a contract is determined by state law, not FCC order.

Tuesday, July 11, 2006

"Clerical and ministerial"

So the SLD has come out with it list of clerical and ministerial errors required by the Bishop Perry Order. Because I never make errors, it doesn't apply to me, so I didn't read it too closely. The only changes that jumped out at me:
  1. Now when you get the 471 RAL, you'll only have 15 days to make corrections; you used to have 3 weeks.
  2. You can now make corrections to Block 4 (discount calculation) or Block 5 (description of services) that will increase the amount of funding requested; it used to be you could make changes only if they kept the funding the same.

If you file the 471 on paper close to the deadline, the option to correct errors that used to be called Minimum Processing Standards is wonderful, but no one should be filing on paper.

The ability to certify after the deadline is nice for people who forget, but I find myself certifying everything online, so again it doesn't help me.

No word from the SLD yet on the "expanded outreach" requirement of the order. Here are some suggestions I'll make if anyone asks me:

  1. For each billed entity that files a 470, check to see if the 470 includes Telecommunication Services and Internet access. If not, send them a note. If the 470 were better (with standardized services choices instead of text boxes), the SLD would be able to ensure that basic phone service and ISP charges are on there. But don't get me started on the inadequacies of Block 2 of the 470.
  2. At 45 days before the end of the filing window, warn each billed entity that hasn't filed a 470 that time is running out. Of course, this will be difficult since the SLD database isn't clear on the difference between billed entities and locations.
  3. For each billed entity that files a 470, send a warning when the 471 deadline is approaching if they haven't filed 471s covering the categories requested on the 470.
  4. Warn applicants when the 486 deadline is approaching (I think we will see this requirement in an FCC order soon, since it was in the Bishop Perry order by mistake, before being struck by an Erratum notice).
  5. Six months into the year, check to see if applicants are billing on all their FRNs, and if not, send a reminder.
  6. 60 days after the end of the funding year, check to see if applicants are billing on all their FRNs, and if not, send a warning about the approaching deadline.
  7. Send quarterly (or at least annual) funding reports to all billed entities. The report should summarize funding for the last 3 years (for a quarterly report) or since the beginning of the program (for an annual report). If a billed entity didn't get funding in one of those years, make sure to show those zeros.
  8. Do more trainings. What is planned now, 6 trainings, 200 people each? Not enough. Maybe if all the trainings were Webcast.... Record the Q&A sessions from all the trainings, and make the recordings available on the Web.

Tuesday, July 04, 2006

Six months?

In the latest debarment proceedings, Inter-Tel and NEC were debarred for 6 months. That seems short to me. These were not cases of people pushing the envelope on eligible services or buying equipment only to realize later they couldn't use it. These were people who set out to steal from the program. I suppose the individuals involved are long gone, but I'd still like to see the corporation held responsible for the way in which its employees drive money into their coffers. In the end, it's another argument for simplifying the rules: I feel bad for the employees' supervisors, because they would have to slog through pages and pages of rules to figure out that these deals smelled funny.

I didn't pore over either decision, so I'm shooting from the hip here, but it looks to me like Inter-Tel had been "suspended" for 18 months, and is now "debarred" for another 6 months. Doesn't it seem like a "debarment" should be longer than a "suspension"? NEC, meanwhile, appealed it's suspension, and so seems not to have been under suspension. Indeed, there continue to be FRNs listing NEC, but it looks like only a handful in recent years. The FCC again provides incentive to appeal: even if you know you're going to lose, filing an appeal buys you time. Lots of time.

Monday, June 26, 2006

Where oh where has my ESL gone?

What is the FCC doing with the ESL?

[Quick background:
A couple of years back the FCC took the great step of having the Eligible Services List approved by the FCC, so that it could be a safe harbor for applicants. See, if the SLD (or any other part of USAC) tells you that a service is eligible, they're only saying what they think the FCC would say. Now, the FCC says directly what is and is not eligible. The list is still vague or silent in some areas, but it gets better every year. Here's how the process goes:
  1. SLD sends draft ESL to the FCC.
  2. FCC publishes the list and asks for comments
  3. FCC digests those comments and perhaps revises ESL
  4. FCC publishes a final list
By FCC rules, the application window can't open until 60 days after the final list is published.
End of background.]

Word has it that the SLD has sent the ESL to the FCC. So what is the FCC doing with it now? Since they're going to be reviewing the list after comments are made, I would think they'd just want to throw it up, let the comments come in, and make their review as comments are coming in and then get the thing posted.

Let's work backwards. Assume a mid-February window closing (which has been the custom recently), and an 80-day window (which was policy until last year). Then the window has to open at the end of November. To meet the 60-day rule, the ESL has to come out at the end of September. Last year the FCC took 89 days to consider all the comments and finalize the ESL, which means that the ESL comment period should end at the beginning of July. Last year commenters only got 10 days to respond, so if the comment period is the same this year, then the proposed ESL should be posted some time around June 20th. What's today's date?

Last year the FCC missed the mark badly. How did they fix it? By shortening the timeframe for applicants. They shortened the application window to 73 days (OK, shaving 7 days was no great hardship). And instead of giving 60 days between publishing the ESL and opening the window, they waived their own rule and gave applicants 14 days. And since it was published the day before Thanksgiving, it really only gave applicants 8 days.

Compressing the timetable for applicants to complete the competitive bidding could help the bad actors and hurts applicants who want to get the most appropriate services at the best price. It gives applicants the sense they're behind the eight-ball, so they're more likely to be taken in by unscrupulous characters, and can't be as diligent in getting the best price or the most cost-effective system.

And this year, the ESL is going to be a big change. The SLD has tried to shorten the list (without removing any information) by overhauling the format. That's good, but it will be a year of adjustment for people used to the old format. Let's hope applicants get more than 8 days to get used to it before the window opens.

Thursday, June 22, 2006

Secret rules galore

Anyone who reads the comments I make to the FCC at every NPRM and Eligible Services List comment period about the "internal controls" that the SLD uses in processing applications knows that I hate them. Not only do they cause widespread fear, but they also promote waste, fraud and abuse: if the applicants could see all the rules, they'd know that some of the things they're doing aren't allowed. If they knew the secret "brightlines" that trigger an audit or Selective Review, they would keep their requests reasonable.

Well, I've never gotten a peek at those guidelines, but I did recently learn the size: 700 pages. That's right, seven hundred pages of rules that no one can see.

Here's a real ugly way to think about it: most of the rules in the E-Rate program are secret.

So in addition to following the rules contained in hundreds of pages of information spread all over the USAC and FCC sites, applicants also have to abide by 700 pages of rules that they can't even get a peek at.

I shouldn't complain: some of my clients came to me after they got blindsided by a secret rule, threw up their hands, and hired a consultant. And since I have handled so many applications for so many years, I have been able to discern many of the secret rules. So 700 pages of secret rules is very good for those of us in the consultant business. But 700 pages of secret rules is not good for schools and libraries, and aren't they what the program is all about?

Wednesday, June 14, 2006

Another blow struck for applicants

The FCC just released a new appeal decision, destined to be called the Richmond County decision, and it is more cause for celebration for applicants. Unlike many recent decisions, this is more than a waiver; the FCC has actually overruled the SLD.

The SLD has created a "two-signature/two-date" rule for contracts, saying that each party must sign and date a contract for it to be valid. Why? Because buried in a list of documents that the FCC requires applicants to keep, they said applicants should keep contracts "signed and dated by both parties." From that line, the SLD deduced that all contracts must be dated by both parties, regardless of state contract law.

Yesterday, the FCC said a contract with two signatures and one date is OK. Huzzah!

What the FCC should have said is that any contract which satisfies the law in the state where it was signed is a valid contract, but one step at a time.

Wednesday, June 07, 2006

FCC tea leaves

An Erratum to the recent Bishop Perry decision has been released which corrects a reference to the Form 486 in the Introduction to the decision. The reference was a little odd in the first place: the 486 is not mentioned anywhere else in the decision, which deals only with the 470 and 471.

So it's got me thinking: was some FCC staffer working simultaneously on an analogous decision concerning 486es, and made a little cut-and-paste mistake?

Thursday, May 25, 2006

PIA timing crackdown

While the FCC is telling the SLD to give applicants more opportunity to supply information (in the Fayette decision), the SLD is shortening the leash.

On one of our apps, we got the normal 7 days, then another 7 days (some weeks, you just can't get anyone in the business office to give you the time of day, much less the info you need). Then PIA decided it needed an invoice to support one of the Item 21 Attachments. And I was given one day to respond. The email request went out at 4:23 p.m. on May 24, and the deadline was COB May 25. For a school employee with an 8:00-4:00 work day, this would have meant walking in at 8:00 a.m. and finding that an 8-hour turnaround was required. Better not stay home sick or take a vacation until your app clears PIA.

I checked with the reviewer to make sure it wasn't a typo, and his response was that the allowed response time depends on the number of extensions you've already had.

Savvy applicants who are caught by this new policy will be OK; they'll appeal to the FCC, and the FCC will give them a waiver and tell the SLD to get real. But a typical school employee, who doesn't have time to read appeal decisions in order to gauge the mood of the FCC, will just accept the decision and lose funding.

In general, I'm steamed about this "incomplete answer" response from PIA. We have a fairly standard Item 21 Attachments (and have been using the online Item 21 Attachment for some apps) which is fine for most FRNs. However, for some FRNs, we get a letter saying that our response was "insufficient." In what way was it insufficient? Sorry, can't tell you: "internal controls." Why was a very similar FRN passed through without any extra info? Sorry, "internal controls."

It's frustrating and nerve-wracking to have our applications handled according to a set of secret rules (euphemistically called "internal controls"). And I'm in a much better position than most applicants, because I can see patterns across all the apps we do, and I have years of experience. No wonder the Extended Outreach Site Visits find so much fear: $2.25 billion hangs in the balance, and no one knows what the rules are.

Saturday, May 20, 2006

Astonishing FCC decisions

The FCC released two surprising decisions on Friday.

First, the Academy of Careers and Technology et al. decision sent 134 denied funding requests back to USAC because the applications were denied only because the SLD found suspicious similarities among the applications. E-Rate insiders have been aware of the SLD's use of "pattern analysis" to weed out shady service providers, but the FCC said that pattern analysis could be used to identify applications needing further review, but was not sufficient to warrant dismissal.

I agree that USAC should be doing a better investigation, and I'm sure some of the applications involved were on the up and up, but I know that at least one of the companies involved was, in fact, handling the entire E-Rate process for districts, giving itself fat contracts, then subbing out the actual work. I hope this forces USAC to really investigate and debar that service provider.

I think I see 134 Selective Reviews on the way.

The second decision was more significant moving forward. In the Bishop Perry et al. decision, the FCC granted 196 waivers on applications that had been filed late or with minor errors. A new high-water mark in the recent string of applicant-friendly waivers.

But the real news was a set of rule changes. From now on, the SLD has to warn applicants of clerical errors and how to fix them, and notify applicants when they have missed a deadline. Applicants then have 15 days to correct the problem. Wow.

I've been pushing for more proactive communication from the SLD on looming deadlines, but the idea of telling applicants they missed a deadline and giving them 15 days to submit goes beyond what I had asked for.

The first thing that occurred to me: the FCC just pushed the filing deadlines back at least 15 days. "USAC should also notify applicants that have filed an FCC Form 470, but have failed to file an FCC Form 471 ... the close of the filing window." (paragraph 24) Let's say the filing window for the 471 closes February 16. Well, on February 17 or so, the SLD has to send you notification that you have failed to file a Form 471. Then you have another 15 days to file.

The requirement that "USAC shall inform applicants promptly in writing of any and all ministerial or clerical errors that are detected in their applications, along with a clear and specific explanation of how the applicant can remedy those errors" (paragraph 23) opens up a large can of worms for the SLD.

For example, there has been some controversy over the SLD's new policy of denying FRNs if the wrong 470 was cited. The old practice had been for PIA to ask for confirmation of the 470 number (without actually saying that anything was wrong), giving applicants one more chance to fix it. After an uproar, the SLD backpedaled to last year's practice. Now with this new directive, it looks like PIA will have to notify you that the 470 number is wrong, and tell you how you can fix the error.

The big unanswered question for me: how will USAC or the FCC determine which errors are "ministerial or clerical"?

Once again, I'm glad I don't work for USAC.

Thursday, May 04, 2006

Red Light

A client recently got a "Notice of Withholding Action," saying that due to some problems they had before hiring me, they have to pay back $100,000 or be subject to the Red Light Rule.

This is a bad time, because their applications for both 2005-2006 and 2006-2007 are currently in review. According to the Red Light Rule, all pending funding requests will be denied. They're looking at losing two years of funding unless they can come up with the money. And it's getting to the end of the fiscal year, when districts often don't have money lying around. So we'll have to work out a payment plan.

But here's today's laugh for me: if they Red Light Rule is invoked, I guess they become a "Red Light District." Nyuk, nyuk, nyuk.

Wednesday, April 26, 2006

Mining the E-Rate data

Slow day in the exhibit booth today, so I've been playing with some numbers from the 2004-2005 program year. I didn't notice anything earth-shattering, but I did notice some trends that might be interesting to the E-Rate-obsessed.

First, New York, Texas and California take a disproportionate amount of E-Rate funding. With only about one fifth of the country's population, they get about 40% of the E-Rate funding. New York state only makes the big-time because of New York City, which by itself take's about 10% of the nation's funding (with less than 3% of the nation's population).

Second, I looked at whether funding was affected by the type of applicant. I didn't see any surprises: libraries and consortia get a greater percentage of their funding approved, but mostly because they request less Priority Two funding. Schools do, though, have a noticeably lower approval percentage than the other applicant types. That doesn't surprise me: in my experience, individual schools are more likely to make errors, and are more often preyed upon by unscrupulous service providers. (Looking for fraud? Look for a service provider mentioned only in FRNs for parochial and charter schools.)

Tuesday, April 25, 2006

Site Visits seem to target Internal Connections

The BearingPoint site visit report for April 2006 is available online at:
The numbers in the report are troubling.

When the Extended Outreach Site Visits were started, the SLD claimed that site visits would be assigned by plucking invoices at random from the stream of invoices being processed. That does not seem to be the case. The preponderance of site visits connected to Internal Connections invoices indicates that the SLD is targeting those FRNs.

By my calculations, over 50% of the Site Visits to date were for Internal Connections. Meanwhile, less than 25% of FRNs for 2005 were for Internal Connections (and that includes unfunded FRNs), and less than 14% of approved 2004 FRNs were for Internal Connections. So Internal Connections FRNs are somewhere between 2 and 4 times as likely to be selected for a Site Visit.

I am in complete agreement with focusing audit resources on Internal Connections (despite BearingPoint and SLD protestations to the contrary, the Site Visits are audits). However, I am not in agreement with telling participants that site visits are selected randomly when they are not.

Of course, we can't know how site visits are assigned: that information is part of "internal controls," the secret set of rules by which the SLD operates.

There are some variations in the numbers of site visits by entity type (libraries got off easy, schools had it hard) and by state, but those variations don't look statistically significant to me.

Don't know much about the site visits? For more information on audits of all types, see my article in this month's School Business Affairs magazine.

Thursday, April 20, 2006


It seems that something like 600 Funding Commitment Decision Letters never got mailed. Apparently they covered Waves 35, 40, and A06 for 2005-2006. Oops.

Replacement FCDLs are being sent to all the applicants involved. The SLD has also spread the word through its informal networks of state coordinators. However, there will be no written acknowledgment of a problem, either on the Web site or in a News Brief. I guess there's no harm done, and most applicants won't even notice, but it kind of seems like a little more acknowledgement is in order.

Wednesday, April 12, 2006

Selective Reviews have started

Let the Selective Reviews begin! I got my first notice today. No surprise: I came on to help this client clean up a mess, and so I expect them to get at least one more year of heightened scrutiny.

It's great that the SLD is starting so early, so the reviews could actually be done by July 1. However, in this case, I would have preferred to wait until an appeal filed with the FCC for this client was resolved. On the other hand, it appears that the FCC appeal is not on the fast track of so many recent decisions, and I think the appeal raises some rather significant and thorny issues, so it could be years before the FCC releases a decision.

Interesting news from the SLD

The monthly service provider conference call usually does not have much of general interest in it, but this month was an exception. There were several real news items:
  1. The Form 470 for 2007 is already available. For most applicants, this is of no interest, since it doesn't make sense to file before, say, September, but for applicants planning a construction project or with long-term contracts coming up for renewal, it's significant.
  2. Funding commitments for 2006-2007 are close. The SLD's board has approved release of the first "wave" of funding for 06-07, and it's now at the FCC for approval. Hopefully, the FCC will make a quick decision.
  3. The SLD's board has approved Priority Two funding down to the 81% level, and that matter is with the SLD. Apparently, the FCC is planning to lower the discount in steps, rather than going straight to 81%. I seem to remember the SLD estimating wrong a couple of years back, so maybe the FCC is being cautious.

There was also a long discussion of what is a valid contract. In particular, whether a contract has to have 2 dates to be valid for E-Rate purposes. The controversy stems from the Fifth Report & Order. In paragraph 48, when describing document retention requirements, the FCC said: "Both beneficiaries and service providers must retain executed contracts, signed and dated by both parties." The SLD has taken this to mean that all contracts must have a space at the bottom under each signature where the signatory can put the date. Apparently there has been some backpedaling on this, but according to some of the service providers on the call, the backpedaling has not reached all the PIA reviewers.

Let's hope the appeals that service providers have filed with the FCC are resolved quickly, so that this nonsense will end. The FCC has always deferred to state law on contracts, and no state law that I'm aware of requires each signatory to write out the date, as long as the date is on the contract.

Saturday, April 08, 2006

Yet another applicant-friendly FCC decision

In the Illinois School decision, the FCC waived its rule that a contract must be signed before the 471 submitted. The Illinois School for the Visually Impaired apparently conducted a competitive bid and selected a vendor before submitting a 471 in February 2004, but was prevented by state law from signing a contract. Apparently the school is funded by the state of Illinois and the state said they couldn't actually sign the contract until the E-Rate funding was available.

I know that the FCC thinks this is an isolated case, but it isn't. I believe all applicants face the same problem. I have heard this complaint from people in other states, but the only state where I have confirmation is NJ. I talked to the person in the Department of Community Affairs who is responsible for school purchasing law. When I told him that the E-Rate required school districts to sign contracts in February for service that could not start until the following fiscal year, he said that was not legal. In February, districts have no budget for the following fiscal year, so they cannot obligate funds.

So what do schools do? They sign contracts that are contingent on E-Rate funding and contingent on budget approval and contingent on board approval. E-Rate Central has a sample contract cover letter with the contingencies in it.

Friday, April 07, 2006

Selective Review appeals will come in droves

The latest SLD News Brief describes the new Selective Review process. At some point I'll probably look at the new 9-page Selective Review Information Request (SRIR), which replaces the dreaded 19-page fax, but it's Friday night, so you'll excuse me if I don't dive into an item-by-item analysis.

What grabbed me:
"If you do not respond to a question or provide an incomplete response, the Selective Reviewer will assume that you do not have more information to provide for that question. The Selective Reviewer will not follow up with you if your submission is missing requested documentation. If you are not sure what to provide, contact your Selective Reviewer and ask for clarification."

No follow-up? Didn't the SLD read the Fayette Order? It overturned an SLD denial because they didn't follow up: "To the extent that Fayette’s response was not sufficient to demonstrate eligibility, SLD failed to specify what additional information was required."

Here's an example from a quick glance at the new form. They request "Correspondence between the consultant/service provider and the school/library regarding the competitive bidding process and the application process." That clearly states that as a consultant, I am to supply only correspondence with the school or library, not the correspondence On-Tech has had with the service provider. But I'll bet that's not what they meant. A less knowledgeable applicant might not know to "ask for clarification"; the instructions are clear, and they are wrong.

I'm sure it won't be as disastrous as I fear. Usually, the SLD creates stiff rules, and then relaxes them in practice (for example, I've seen that 7-day deadline stretch into months). Still, I see a lot of appeals in the FCC's future....

On the plus side, applicants now have 30 days to respond instead of 7. That's more realistic, given the volume of material that has to go to the SLD (I've sent in well over 500 pages on some reviews).

CIPA revisited

I was rereading the Children's Internet Protection Act (CIPA), and found some things that I either hadn't realized or had forgotten.

For those who don't know what CIPA is, it is federal legislation that requires schools and libraries who want to receive federal technology funding to:
  1. Develop an Internet safety policy,
  2. Hold a public meeting concerning the policy, and
  3. Implement a "technology measure."
These measures are to protect users from obscene material and child pornography, and further protect children from material harmful to minors.
CIPA is a big E-Rate issue, because organizations that are not CIPA-compliant can only get funded for telecommunications services. This is not an issue for most public schools; there are very few schools that don't filter. I was surprised to learn, however, that librarians are valiant champions of our civil liberties, and objected to the restriction. In fact, they fought CIPA all the way to the Supreme Court and lost. As a result, most libraries choose not to receive E-Rate funding.
So what surprising things did I find?
  1. Only visual depictions are covered. Any text is allowed. I find this particularly interesting since most filters can examine the text of a page, but not the pictures. (The exception I know of is "The Bair," which has poweful computers scan pictures and determine if they contain naughty bits.) Of course, filters rely largely on blacklists, which should stop most inappropriate sites.
  2. Only sexual content is forbidden. "Harmful to minors" means "prurient" and "patently offensive" depictions of a "sexual act" or "a lewd exhibition of the genitals." Pictures that are extremely violent or otherwise inappropriate for minors are not covered by CIPA.