eSN goes WWN

It looks like eSchoolNews is taking a page out the tabloid playbook with the headline "Unused eRate funding totals billions."

OK, first off, it's "E-Rate," not "eRate." I don't care much for the hypen, either, but we don't get to change the name the program because we don't like it. It would be like using "E-SchoolNews," just because I liked the hyphen.

But the real issue is that I find the headline (and the rest of the article) misleading and harmful to the program. It makes it seem as if there are billions of dollars being wasted, which is wrong.

The first paragraph of the story is even worse: "About $5 billion of the estimated $19.5 billion in eRate [sic] funds committed to schools and libraries from 1998 to 2006 were never used, according to a recent report from the Government Accountability Office (GAO)."

Incorrect. It is probably true that schools and libraries spent about $5 billion less than was committed to them (though I have my doubts about the GAO's numbers), but it is not true that the funds "were never used." Some of that funding is being held in reserve, because the arduous application process means that there may still be some expenditures from those funding years. The rest of the money has been carried over into other funding years. Every last penny of that funding has been or will be used.

My paranoid mind already sees the GAO trying to take away our carryover funds, so I hate to see an inaccurate slam coming from what I would expect to be a sympathetic periodical.

Secret announcement

Here's this week's smile. I was looking through the FCC's list of E-Rate Orders, and noticed this letter from the FCC to USAC, approving the PIA procedures for 2009-2010. The procedures are hundreds of pages of secret rules. I just find it humorous that the approval is public, but the procedures are secret. And when I say "humourous," I mean "enfuriating."

But I've already ranted about this, so this evening, it's just a wry smile.

Funding fiber

Warning: This post contains no useful information, only snarkiness and brief potty humor. So maybe you should skip it.

Last week's News Brief reports, apparently without any sense of irony, that the final regular wave for 2007 will be issued this week. It took me a second before I snorted. A "regular" wave of funding is being issued over 10 months after the end of the funding year?! That doesn't meet my definition for regularity.

Maybe USAC should pay more attention to the amount of fiber in their commitments; perhaps the rules on fiber WANs need to be more lax.

These delayed commitments are a serious matter. For recurring services, districts have to forego service or pay full price and get reimbursed a year after the end of the funding year. It would be interesting to see what percentage of the undisbursed funding (bemoaned in the recent GAO report) are the result of committals rendered useless because the applicant had to forego the service. And it's an accounting nettle to receive reimbursement for costs incurred two fiscal years ago.

Some suggestions for fiscal regularity:

1. Simplify the rules
2. Simplify the rules some more
3. Set the denial threshold before the start of the funding year
4. Streamline PIA process for Priority 1 funding requests
5. Don't make rule changes midstream (look at all the time Solix is wasting on Web hosting requests this year)
6. Penalize PIA for Basic Maintenance FRNs left undecided after the start of the funding year.
7. Use "As Yet Unfunded" more liberally (only call it something like "Funded Pending Funds Availability"); knowing that an FRN will be funded unless it falls below the denial threshold can be very helpful in deciding whether to forego service or pay the full cost.

Imagining early denials

It’s been an exciting week in Washington for the E-Rate, and Funds for Learning released a nice summary. Aside from the GAO report and the USAC board meeting, which I’ve already blogged about, a new FCC Commissioner was nominated, and Congressional action on the E-Rate.

I really don’t know anything about the new nominee, except that she’s got telecommunications chops and a father in Congress. Sounds good to me.

The Congressional action is a mixed bag. On the plus side, a bill has been put forth to exempt the E-Rate from the Anti-Deficiency Act (ADA). That’s good news on two fronts. First, we won’t ever again have to worry about a repeat of 2004, when the ADA shut down new funding commitments for several months.

Second, USAC will be able to return to the practice of committing funds above the cap, knowing that not all commitments become disbursements. This will cut down on undisbursed commitments, which will make the GAO happy, but it will also make possible much quicker determination of the Priority Two denial threshold.

Currently, USAC is committing only what they can fund. For Priority Two, that means that the denial threshold can only be set after essentially all commitments have been made. And so every year we end up in a situation where funding requests which are close to the denial threshold (this year, applicants at 86% and 87%) are not approved until the funding year is more than half over (this year, 87% applicants are still waiting).

Without ADA, USAC will be able to estimate disbursements in March, and set a denial threshold at that point (which will be lower than with ADA, because it will be based on estimated disbursements, not commitments). I don't really expect the denial threshold to be set in March, but maybe it can be set before the start of the funding year.

Imagine a world where USAC announces the denial threshold in June, and it's below 80%. The permanent end of ADA makes that a possibility.