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Monday, April 02, 2007

New economics for USAC

One sentence in the recent Brownsville Order got me thinking about another way that the FCC's about-face in handling appeal improves the picture for applicants. Remanding almost every appeal they get is great for those who appeal, but it also is creating an incentive for USAC to take more time with applicants.

In paragraph 12, the FCC said, "If USAC helps applicants provide correct technology plan documentation initially, USAC should be able to reduce the money it spends on administering the fund because fewer appeals will be filed protesting the denial of funding for these types of issues."

That got me thinking.

In the bad old days, if USAC denied an application, it stayed denied. I used to tell clients, "We can appeal to USAC, where we'll have a slim chance of getting relief, and then appeal to the FCC, where we stand almost no chance of relief." (Now I tell clients, "We'll appeal to USAC to get some more information on why we were denied, then appeal to the FCC, where we stand a good chance of getting relief.") So there was no economic incentive for USAC to make the extra effort to get the information needed to approve an application.

Since Bishop Perry, USAC can count on a lot of denied applications being remanded. In fact, I would say that most denials would be remanded, except most applicants don't realize they can appeal, or don't want to go through the bother (or the person doing the application is afraid that s/he's going to get fired for not getting the funding, and thinks an appeal might draw attention to the denial). As the word spreads that the FCC waives more than Queen Elizabeth, more and more denials will be appealed and remanded.

Which changes the efficiency formula for USAC. Now more weight will have to be given to getting the info necessary to approve funding than to moving the application along. So while the FCC's statement quoted above was not true 18 months ago, it is increasingly true now.

And that's good for applicants, although it means either longer waits to get approved, or more money taken from the fund to cover increased PIA costs, or both.

When I gave presentations on navigating the application process, when it came to PIA, I always advised people to remember that they shared a goal with their reviewer: to move their application off the reviewer's desk. The difference was that the applicant wanted it approved off the reviewer's desk, while the reviewer just wanted it off, and approving it was the simplest way to get it off. Now that so many denials are boomeranging, USAC will have to find an incentive for reviewers to spend more time working to get approval.

I have found almost everyone at the SLD and Solix willing to help in getting an application approved, just because they're decent people, but now it will be in their companies' economic interest to be helpful.

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