An RFP by any other name

A cornucopia of appeal decisions (27 by my quick count) were released yesterday. And there are enough waives to keep any surfer happy; one decision waived the rules for 78 appeals. In most cases, it looks like the FCC blew the dust off some appeals that had been sitting on the shelf since the early aughts and applied post-Bishop Perry rules to them.

Only one decision seemed to me to break new ground: the Approach Learning decision. And it's not just because I wrote one of the appeals involved. In fact, it was cited as precedent in another of the 27 decisions, so that makes it precedent-setting.

The decision grants 12 appeals, and only one of them is a waiver. So the decision says that in the other 11 cases, the applicants had not violated any rules, and USAC was mistaken in denying them.

It's a decision about a very narrow issue: the checkboxes on the Form 470 where applicants indicate whether or not they have an RFP. Up until this decision, if USAC conducted a Selective Review (or audit or Extended Outreach Site Visit or whatever), and decided that an applicant had an RFP, but didn't check the box saying so, they would deny any FRNs associated with that RFP.

I argued (as apparently did others) that the document we gave to service providers was not an RFP by any definition in state or federal law, that it was really just a restatement of what was in the 470, and that service providers did not need to see the RFP to bid. The FCC accepted those arguments.

As far as I can tell, the FCC is saying: "Check whatever box you want, as long as the bidding process is fair."

Alas, the FCC did not provide a definition of "RFP," which I had requested in my appeal. Actually, way back when those checkboxes were being added to the 470 (2002?), at the train-the-trainer workshop I warned USAC not to use the term "RFP," because it has a very specific legal definition which varies from state to state. If only people would just do what I say, this program would be so much better. On the other hand, my suggestions on simplifying the application process would dry up the need for E-Rate consultants, so I shouldn't complain. At least not until my kids are through college.

I wonder if there is any definition of "RFP" in the 700 pages of secret PIA procedures that the FCC approves every year....

IP telephony finds a home?

I'm not a big FCC wonk, since most of what they do doesn't affect my clients, so I just scanned through the announcement concerning a Nov. 4th FCC meeting, looking for anything about E-Rate. First question: is the FCC trying to make the text opaque, or are they just incapable of writing clearly?

Anyway, two things caught my eye, both under the first item on the list:

1. "IP-enabled services": Could it be that the FCC is finally going to decide if IP telephony is a telecommunications service or information service? Why should we care? Well, the reason that IP telephony is under "Miscellaneous" on the Eligible Services List is that the FCC doesn't want to put it into either telecom or Internet services until it's decided the big question of whether it's a telecom service (and highly regulated) or an information service (and much less regulated). Maybe IP-enabled telephony will finally find a home on the ESL.
2. "The Commission will consider a Report and Order, Order on Remand, and Further Notice of Proposed Rulemaking addressing the comprehensive reform of intercarrier compensation and universal service." The failure to mention Docket 02-6 anywhere in the preceding jumble of issues makes me think they're not talking about taking action on the comprehensive E-Rate NPRM released in June 2005, or the request for comments on E-Rate Central's ideas about Equipment disposal released in November 2006, or even the NPRM on suggested changes to the Eligible Services List released in August 2008. Maybe "comprehensive" is a relative term.

Wasteful audits

I was reading the USAC Board Meeting notes from E-Rate Central's E-Rate Service Provider Forum, and there were some interesting audit notes.

The audit reports approved this week were 44 audits covering $18 million. They had a "monetary effect" of $893,000. I think that means they found $839,000 in overpayments. That would be good news. It would mean an error rate of 2%. If we can keep that up, we'll make the IPIA threshold of 2.5%, which would mean fewer audits in the future.

Here's what else jumped out at me: those audits cost $4 million. That's over $90,000 per audit, over 40% of the amount audited, and more than 4 times the amount recovered. In other words, the fund lost over $3 million on those audits.

I'd rather see the $3 million spent simplifying the program.

Online BEAR report card

Now that the BEAR season is over, it's time for me to kibbitz about the online BEAR tool, which we used a lot this year.

First, the overall grade: A-
It really is a good tool. It has a no-frills feel, but I don't like frills, so that's fine with me. It gets the job done, and does it simply.

Good points:

1. All the info is on one screen. When I review other forms, I have to click through several screens, and the certification window pops up in another browser wind. With the BEAR, everything is right there.
2. It does the discount calculation for you, checks for errors, etc.

OK, now areas for improvement, most annoying first:

1. Once I've submitted a BEAR, I can't modify it. And service providers can't modify them at all. It's not unusual for a service provider to want a different amount that I've put in,* and it's usually a small difference, so I would like some ability for service providers to certify a different amount. Better yet, once they've certified a different amount, an email notification would come to me, and I would certify the new amount.
2. You need to enter a PIN in order to prepare a BEAR. I can't be the only person who wants at least two sets of eyeballs to look at every form before we submit. So as PINmeister I have to log people in so they can prepare forms for my review. Clunky. I'd rather that it work like the other forms, where anyone can prepare the BEAR, but only the PINholder can certify.
3. A BEAR, once created, cannot be deleted. I'm curious to see how long these orphan BEARs will hang around in the system. (Here's a suggested addition to E-Rate nomenclature: the orphan BEARs should be called Smokies. Get it? Orphan bears?)
4. Applicant notification emails: The emails I get from the system give me no identifying information other than the invoice number. How about giving me the BEN, or even better the list of FRNs. I've had to modify my tracking system to use invoice numbers so I can keep track of these things.
5. Service provider notification emails: I've heard from more than one service provider that they get no notification when I submit a BEAR. And since the SPIN Contact Search tool doesn't give out email addresses, we have to make phone calls.
6. Quirky field validation: If you have a space before or after the pre-discount amount (which is not uncommon when copy-and-pasting from Excel), the discount will calculate correctly, but you'll get an error when you try to certify.

* Why do service providers review the amount, anyway? Service providers are certifying two things on the BEAR: A) We'll turn the reimbursement around in 20 days, and B) we won't use the reimbursement to pay our own expenses. The service provider has no responsibility to review the amount. Now I don't mind having another set of eyes review the amount, but a lot of the time the difference is insignificant. What really gets my goat is service providers demanding that I supply them with account numbers and bills before they'll certify. It's infuriating to have invoices denied while I give service providers information that their own billing system generated. If you can't keep track of your own clients billing, just certify the damn form.

Pattern-analyze this

As the BEAR certification notices come in, my first thought is, "Why doesn't this note contain any useful information, like, say, the FRN or SPIN or 471 # or BEN or Applicant Name or anything that would allow me to figure out which invoice we're talking about. Yeah, I know, I can just look up the invoice #, but sometimes I like to glance at a note and tell something about it. At least I can tell which service provider it is by glancing at the email addresses.

My second thought: "Why haven't they taken the 'View Bear Form Status' link off the message yet? Don't they realize it doesn't work?" See, the link in theory takes you to your BEAR, but only if you're already logged into the online BEAR area. And in my case, logged in to the correct client's online BEAR area.

But today's new thought: "Why does the return address end with saic.com?" SAIC? Then I remembered the big kerfluffle when SAIC was hired to handle some IT upgrades for USAC. Some of SAIC's competitors pointed out that SAIC was a service provider in the E-Rate program, so it would be a conflict of interest for them to have back-end access to USAC's databases. I said at the time that it's much ado about nothing, and I still think so.

But here's the thing. USAC is the company that came up with pattern analysis, where they denied applications because some Forms 470 looked suspiciously like a service provider had helped make them. They also denied funding on some applications because the Form 470 was submitted from an IP address known to be associated with a service provider. (Fortunately, the FCC pointed out that suspicious similarities were insufficient grounds for dismissal, and pattern analysis faded into the background, though I'm sure it still goes on and triggers Selective Reviews, etc.)

You would think that the company that invented pattern analysis would be more careful about giving the appearance that all this mail is being handled by SAIC's email server (which would mean it would be archived at SAIC, and available to...).

I'm still fine with using SAIC handling the back end, and I don't see a real conflict of interest. I'm just saying, if we turned pattern analysis onto these emails....

CER fun?

Ah, my perfect storm to point out the ludicrous nature of the Cost-Effectiveness Review (CER) process.

Now, many of you know that I hate the CER process. I put at #2 on my hit list of E-Rate rules to be eliminated, behind the 2-in-5 Rule. CERs are actually more heinous than the 2-in-5 Rule, but CERs are actually warranted in some cases, and probably do some good. The 2-in-5 Rule is useless and heinous. On the other hand, at least the 2-in-5 Rule isn't shrouded in secrecy. There's even a cool tool for figuring out if you're about to violate the 2-in-5 Rule (www.universalservice.org/sl/tools/search-tools/two-in-five-tool.aspx). Whereas if you ask what it would take to pass a CER, you are told flat out that the information is an "internal control," which means "secret." Not only won't Solix tell you how you got into this mess, they also won't tell you how to get out. (So much for the "pull you through the application process" emphasis from last year's training.)

So the 2-in-5 Rule is a bad rule well implemented. CERs are a good idea horribly implemented.

Anyway, back to my perfect storm. What most people don't know, and what Solix doesn't tell you, is that if you fail a CER, you can submit a modified request. Unfortunately, that usually doesn't work out because the complexity of redoing the proposal means it can't be done fast enough, and the CER of one FRN will hold up the whole application.

But now I have an 87% application who needs 300 cable drops repaired. Solix thinks that's too many drops for the number of students at that location. Two factors have come together: 1) since it's an 87% district, they aren't going to get Priority Two approval for months, anyway, and 2) the entire request is just cable repair, priced per drop. So I can easily reduce the request to 299 drops to see if that gets approved. No? OK, how about 298? No? 297? Eventually, I'll get down to exactly the number needed to get this thing approved. I've got a couple of months.

If I do discover the secret drops-per-student ratio that will pass a CER, I'll let you all know.

Of course, I don't get to make the decisions on strategy, so it may be that our client will decline to participate in this Chinese water torture, since they don't share my level of resentment towards the CER.

But a fellow can dream....