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Sunday, August 17, 2008

What a difference a date makes

E-Rate Central's August 18th newsletter has an interesting discussion about unused funds, rollovers and denial thresholds.

The first thing that jumped out is that all of a sudden, there is $800 million available for rollover. E-Rate Central made a projection about how big the fund might be for 2009-2010, and at first blush it seems rosy: $3.5 billion available for next year. But compare that to demand, and it doesn't seem that great. For 2008-2009, if you look at Priority 1 requests from all applicants and Priority 2 requests from applicants with a discount of 80% or greater, the demand was over $4 billion. And the Priority 2 demand from 90% schools increased 50% from FY 2007 to FY2008, so I'm betting that even with $3.5 billion in the fund, 80% applicants get diddly for Priority 2.

More interesting was the mention of why the rollover happens the way it does; I hadn't read the rules regarding rollovers for a long time. It all goes back to the Third Report and Order, which created the rollover by changing Part 54.507 of 47 U.S.C. to allow the FCC to rollover funds "in the second quarter of each calendar year." That's why we get the rollover at the end of the second quarter each year. Now imagine if they changed the rule to "each October." That way they'd be rolling the money into the fund before the opening of the window, allowing applicants to make more educated guesses about the coming funding year. It's not as good as my proposal to set the Priority 2 denial threshold before the start of the funding year, but it's a start.

This $800 million windfally provides the perfect opportunity. They could do the rollover for 2009-2010 this October, and it would still be close to a billion dollars. It would require an FCC order pretty soon, so I don't see it happening, but it would be nice....

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