No signature/no date

USAC is now requiring only one signature and one date for contracts, if that is allowed under state law. When introducing the new rule in this year's training, John Noran started by saying that if state law allows a contract with no signatures, you still have to have a document with a signature and date. I remember thinking, "Is someone really going to try to claim a contract with no dates?"

The answer is yes. There's an appeal at the FCC right now claiming an oral contract. It's an interesting assertion: if state law says I have a contract, who is USAC or the FCC to say I don't?

The FCC has certainly broadened the scope of documents that are allowed to serve as contracts, but I find it hard to believe that they will allow a contract that leaves no auditable trail.

But let's take a step back. Why are contracts required before filing the 471? In general, the terms of the contract are significantly altered by the time the equipment is actually installed, since much of the equipment gets outmoded over the 18 months or so between contract and installation. Why not just accept a quote from a vendor? The 471 itself is enough of a paper trail of which vendor was selected.

If the funding were paid at the time of the signature of the contract, then certainly one would be required. But the actual payments aren't made until services are delivered.

I suppose you could say that forcing applicants to sign contracts discourages applicants from filing for funding willy-nilly, but I haven't seen any cases of that. The allocation of Priority Two funding is badly broken, but not because the contracting requirements aren't stringent enough. The contracting requirements don't restrain irresponsible applicants.

What's the downside of forcing applicants to have a signed contract? Well, for starters, it's illegal for most applicants to sign a contract six months before the start of the fiscal year in which the equipment will ostensibly be delivered (and in most cases 18 months before the start of the fiscal year in which the equipment will actually be installed).

The time has come for the FCC to move from "one-signature/one-date" to "no contract."

Rollover overdue

If the FCC is going to roll funds from past years into the fund for 2008-2009, it's past time to do so. Rolling over funds after the application window is unfair to applicants. The FCC should make rollover decisions before the window opens.

Even better, use extra funds to pre-fund Priority Two for the following year. Under my scheme, the FCC would just bank any leftover funds until the opening of the 2009-2010 filing window next year. At that point, they make an educated guess as to where the denial threshold will be, and set it at that level. Then pay Priority Two requests to all applicants down to that level using the rollover (and some of the 09-10 funds if their estimate was off).

Imagine if Priority Two funding were not a crapshoot. It could happen if the FCC were willing to take a bold step.

2-in-5 is 0-for-3

I've said it before and I'll say it again, the 2-in-5 Rule must go. For those who don't know, the 2-in-5 Rule is an FCC rule created in 2003 in the Third Report and Order, which says that you can only purchase equipment with E-Rate funding twice every five years. The idea was to reduce the amount that 90% schools were spending, in order to give other schools a chance.

As I've said before, the rule adds complexity, is unfair to small applicants, and creates waste. And now we have further evidence that it fails utterly in its purported purpose. In the Third Report and Order, the FCC said, "We find that, by limiting the frequency in which applicants may receive Priority Two discounts, funds will be made available to more eligible schools and libraries on a regular basis." They could not have been more wrong.

This week's E-Rate Central News says that it's likely that all applicants below 80% will be denied Internal Connections funding this week. And that's with the unjust rollover of $650 million increasing the size of the fund by 30%. The 2-in-5 Rule is not making funding "available to more eligible schools and libraries." And it is definitely not making funding available "on a regular basis." Still, only 90% schools can count on funding. The schools that the rule was supposed to benefit now have to juggle the 2-in-5 Rule with guesses about the discount level in making technology decisions, instead of making decisions based on educational goals.

The 2-in-5 Rule has been in effect for 3 years, and it has not had any demonstrable effect on the availability of funding for schools below 90%. How much longer do we have to wait before we declare the rule a failure?

The 2-in-5 Rule must go! Now!

Big changes in the neighbor's house

I took a quick look at the "Recommended Decision" concerning the USF High Cost Program that was posted on the FCC Web site today. It is a set of recommendations to the FCC from the Federal-State Joint Board on Universal Service.

I'm just not an expert on the High Cost program, so I just skimmed the decision to see how it affected the program.

First, I'm not sure what the document is. Is it a request for comments? A notification of a pending decision? An Order? So I don't know if it's all going to happen.

I noticed two things that affect the E-Rate program, and both in good ways.

First, the decision calls for a cap on the High Cost Program. This program has been ballooning, so the idea is to cap it at $4.5 billion. I don't know if that's good or bad for the High Cost program, but it's definitely good for the E-Rate program. The USF charge on our phone bills has been increasing, and that makes it more likely that someone in Congress will try to slash the whole program. With High Cost capped, the USF should be more stable, which will help keep it off radar screens.

Second, the decision expands the definition of supported services to include broadband Internet access. Since Internet access is already eligible in the E-Rate program, it won't have a big effect on E-Rate rules, but I'm hoping it will lead to lower costs for Internet access for applicants in high-cost areas, which will mean more money for everyone else.

So it's kind of like your neighbor fixing up the plumbing and electrical in their house. It doesn't really help you right off, but it's a good thing.

The best of times, the worst of times

First, the good news: the latest News Brief states that any FRNs which were on BEARs that had been Submitted by applicants, but not Certified by service providers, would be automatically given invoice deadline extensions until January. Bravo! As long as it doesn't become habit-forming....

Now, the bad news: there seems to be a general tightening of the requirements for approval of Invoice Deadline Extension Requests (IDERs). My impression in the past was that you could get almost any IDER approved. Based on some appeals to the FCC that I've seen recently, the party is over. The guidelines still seem pretty charitable, but you have to have a good reason. And on the latest Service Provider Conference Call, Mick Kraft mentioned that if you wait more than 120 days after the last date to invoice, that may result in denial. That seems pretty reasonable to me, since that's 240 days after the last day to receive service, which ought to be enough time to pry the billing information out of even the most stubborn business office.

While we're on the subject of invoicing, I must give kudos to the folks at USAC Invoicing. Based on the stats we heard on the conference call, it doesn't seem like the surge in BEARs before the deadline created much of a backlog.

In my dreams

Once again, my subconcious is telling me to get a life. Last night's dream was that the FCC had finally released the huge policy order that we've been awaiting for a couple of years.

Sorry to report, it was one of those dreams where you're reaching for something, but can't quite get it, so all I got to see was the cover page. Which means I can't tell you what changes are coming.

DRT on steroids?

I'm thinking that the steroids scandal is about to spread to the Data Request Tool. This venerable tool has been around for years, and all of a sudden, it's as sprightly as a young colt.

Seriously, it seems faster now. Much faster. I don't have any comparison data, but the difference is clear. It is just lovely to see that "Download Data File" button appear so quickly.

I'm guessing it had something to do with the DRT downtime last week (which had me in withdrawal) and the new "tsv" extension on the files to be downloaded.

So, thanks to whomever is responsible for the improvement.

Now for the very small and unreasonably cranky complaint. I'm sure that .tsv is a real file extension used by some programs, but it is not in the Microsoft lexicon, so none of their programs know how to import it. It doesn't make too much difference in Excel, but the import wizard in Access won't let you import a .tsv file. Of course, the old .tmp extension wouldn't import, either, so my automated tools are already set up to rename the file with a .txt extension.

USAC humor?

I think this is the first time I've actually laughed because of the USAC home page. Certainly some announcements in the past have elicited a sardonic snort, but this is the first time I can recall having an honest-to-goodness laugh.

They've got a banner on the page with a countdown to the close of the filing window. Maybe they've had this in previous years, and it's certainly a great practical idea. What cracked me up today is that the countdown includes seconds. Somehow, that level of specificity just struck my funny bone this morning.

So kudos to whoever put the countdown on the page. Very useful, with just a little bit of whimsy thrown in. There just isn't enough whimsy in the world.

HATS has a foot?

USAC's latest News Brief shoots the HATS program in the foot. Under the "Helping Applicants To Succeed (HATS) Program Update" section, the first thing they do is list the goals of the Extended Outreach Site Visit (EOSV) program. I don't have time to read paragraphs, so I skipped right to the bullet points, naturally thinking I was reading about the HATS program. So when I got to the 4th point, my eyes popped. Then I went back and read the text and realized that they were talking about EOSV. Of course, I only realized that because I know "site visits" is a phrase tightly tied to EOSV in the USAC lexicon.

So here's what a typical applicant is going to read from that section: "Helping Applicants To Succeed (HATS) blah blah blah support blah blah education blah blah best practices blah blah compliance reeer [rewind noise] COMPLIANCE. Oh man, a new type of audit." Done reading.

The #1 problem for the HATS program is that it looks like an audit: the same company that does the EOSV (which is an audit, whatever else it is), comes out and looks at your past funding requests. USAC should be going all out to dissociate HATS from EOSV (and PIA and all the other types of audits). The two should not be mentioned in the same News Brief.

The other thing USAC needs to do is say flat out: "HATS personnel do not send any information about an applicant back to USAC." That should be the policy. A general report about the reasons that applicants fail would be good, but no information about individual applicants should reach USAC. As it stands now, if a rule violation is discovered during a HATS visit, USAC can't just ignore it. So an applicant that is already bloodied by PIA could get kicked while its down.

During the USAC training this year, we were asked to talk up the HATS program. Sorry, no can do. All I need is for me to advise some school to take a HATS visit, and some mistake they've made gets back to USAC and they get a COMAD, and my name is mud.