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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.

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