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Monday, July 23, 2007

Imagine if it were every year

The FCC's unjust rollover of $650 million into the E-Rate program for 2007-2008 has had a happy result: USAC has requested approval to fund Priority 2 down to 83%. Amazing to have it go down to 83% so early.

The dark side: the gutsy appeal from the Gallup-McKinley County (NM) Public Schools (apparently penned by E-Rate Central's George McDonald), saying that the 2006-2007 denial threshold of 86% was unnecessarily conservative and should be lowered. Gallup-McKinley bet on the denial threshold being 85% or lower. (The 2-in-5 Rule was supposed to get funding to lower the threshold, and no one knew yet what a failure it is.)

It looks like Gallup-McKinley had the good sense to submit an application for the same equipment for 2007-2008, but they lost $2.7 million in maintenance funding. If they had grouped the 90% schools together with perhaps one or two 80% schools or admin buildings with lots of infrastructure, they could have gotten most of that $2.7 million.

Which brings me back to what the FCC should have done with the money: let it sit until September, and then announce the denial threshold for the 2008-2009 funding year at the same time that the Eligible Services List is released. With all the extra money, they could have announced an 85% threshold with confidence that there would be some money left over. In subsequent years, they could fine-tune the process for setting the threshold. Imagine: every year, 60 days before the opening of the window, we'd know what was eligible and what applicants could get Priority 2 funding.

They could also do really the right thing: cut the top discount for Priority 2 to 75% (and scrap the 2-in-5 rule). 75% is still a very nice discount for needy districts, but the 25% "co-pay" would cut a lot of waste, fraud and abuse. And it would free up some money for the rest of the applicants.

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