Holiday cheer, but not where you expect it

Here is the FCC's Christmas gift this year: an appeal decision granting waivers to applicants with no contracts.  It appears that the requirement to have a contract before filing the 471 is actually more like a requirement that you have something like a contract close to the time of filing the 471.

But instead of just celebrating this cheery decision, I'm going to whine.  After all, that is what readers have come to expect.

First of all, I will reiterate that the FCC's requirement that school districts and public libraries sign contracts in March for services that start in July and end the following June is illegal.  When I called an individual who helped write the public purchasing law in NJ, and explained the E-Rate contracting requirement to him, his response was, "But that's illegal!"  Since budgets for the following fiscal year aren't approved, it is illegal to sign contracts for that fiscal year.

Second of all, the FCC waived the rules for 40 appellants, and granted 7 appeals on their merits, without telling us which appeals fall into which category.  OK, so it makes no real difference to the applicants, and there are probably only 2 or 3 people in the world who would actually take the time to go back and look at the appeals that were granted, but consarn it, I am one of those people.  I want to know the 7 appeals where the FCC thought USAC had it wrong, so that I can learn more about the FCC's thinking, and use this decision as a precedent in future appeals to the FCC and USAC.

But here's the record-scratch moment from this decision: "In addition, we grant...petitioners waivers of our filing deadline for appeals because we find...the late-filed appeal would never have been necessary absent an error on the part of USAC."  Wait, did the FCC just say that in cases where USAC makes a mistake, the filing deadline will be waived?!  Let's check that footnote: "Based on the record, USAC erred in its decision to deny funding for these petitioners for not having a signed contract in place when the Form 471 was submitted.  If USAC had not erred, the petitioners would not have had to file an appeal."

So there's no statue of limitations on USAC error?  Even I can't find anything to complain about with that policy.  It seems only fair that if applicants can lose funding for mistakes made up to 5 years ago, we should be able to appeal mistakes made for at least 5 years.

Bah! Humbug!

Call me Ebenezer.  So close to Christmas, I'm going on another rant.  And on a topic I've ranted to death, no less.  So if you don't want me to chip away at your holiday mood, maybe you should skip this one.

I'm going back to competitive bidding.  Something I said in my last post on the subject has got me thinking.

[Finding new ideas in my own writing would seem to indicate at least one of the following:

1. My ability to form complete thoughts leaves something to be desired.
2. I spend too much time reveling in my own prose.
3. I'm tossing crap onto this blog before I've thought it through.
4. My mind moves so fast, even my own mind can't keep up.
5. My writing is incredibly  thought-provoking.]

Anyway, the statement that got me thinking was, "the main goal of most competitive bidding rules is to prevent cheating, not lower costs."  Let's face it, the FCC rules are not going to prevent cheating for two reasons:

1. They can't catch cheaters.
2. They can't punish cheaters.

The FCC can't catch cheaters because they have no subpoena power and very limited audit resources.  Look at all the major cheaters that have been caught.  They've either been caught by district attorneys or school district audits or both.  With its limited investigatory ability, the FCC is only going to catch people who make stupid mistakes.  And competitive bidding rules don't prevent stupid mistakes.  (Improving the tools available to applicants would prevent stupid mistakes, but that's a different rant.)

So when cheaters do get caught, what is the punishment?  Well, the district attorneys dish out huge fines and jail time.  The FCC does 2 things:

1. Debar individuals for 3 years.
2. Take back the funding from the applicant.

I've posted before about the irony of giving a 3-year debarment to someone going to jail for 5 years.  I mean, you could file an appeal with the FCC, get debarred, and be back in the E-Rate business before the appeal was decided.  (Actually, the FCC has handed out at least one 10-year debarment, but the only effective debarments would be against service providers, and there the FCC seems to hand out 6-month debarments, if there is any debarment at all.)  So you catch someone cheating and the punishment is that they can't cheat any more for 3 years?

And taking money back from the applicant doesn't hurt the perpetrators.  If the cheaters gave a fig about their employers' well-being, they wouldn't cheat.  (My favorite case is one where a district alerted the FCC to a $5 million fraud by their Tech Director, and now the FCC is after the district for $3 million, even though the district never got any money or equipment.)

Where's the harm?  Well, the restrictions imposed by competitive bidding rules increase the cost of procurement.  Apart from the wasted staff time, the decreased flexibility often prevents applicants from purchasing what would be a more cost-effective solution.

The FCC's toothless competitive bidding rules drive up costs without preventing cheating.

How can we deter cheaters?  In all the cases mentioned, existing laws resulted in prison time.  So let the legal system catch the cheaters.  

So for Xmas this year, I'd like Santa to take the Form 470 back to the North Pole with him.  Then he can stick one in the stockings of bad children.

Who's missing the gravy train?

Funds for Learning has posted a short report on the 2009 funding year.  So I thought I'd steal a little of their data, and see what the participation rate is among different categories of applicants.

I got my info on the number of libraries from the American Library Association, and on the number of schools and districts from the U.S. Dept. of Education.  Here are the results:

Category	Total	Applied	Participation
School Districts	13,809	12,833	93%
Schools	33,740	7,142	21%
Libraries	9,225	3,672	40%
Consortia	n/a	439	n/a

I'm kind of suspicious of the data, because I think the FFL data is pulled from the selection the applicant makes on the Form 471, and so a school with multiple locations might apply as a district.  Elsewhere, the DoE put  the total number of districts in the country at 16,850.  In the other direction, I have seen single-school districts apply as a school.  Also, consortia contain applicants from the other 3 categories, so participation is higher for all categories.  But let's just take the numbers as roughly correct.

93% is much higher than I expected.  I would have guessed 80%.  I mean, anything that's voluntary, it's hard to get more than 80% participation.  And I see a lot of districts not applying, but I guess that's because I'm looking for those districts.  If we use the DoE's other total number of districts (16,850), the participation drops to 76%, which I find more believable.  Still, that's a good participation rate.

The libraries number is also higher than I expected.  Between the need for a tech plan, the thorny first-amendment infringement inherent in CIPA, and the small telecom/Internet spending for most libraries, I had expected to see a number closer to 20%.

The schools participation is kind of embarassing.  Only 1 in 5 apply, which is lower than I had expected.  And since most of them have some kind of filtering in place, it's really just a matter of tossing together a tech plan and filling out the paperwork.  Now with no tech plan required for Priority One, perhaps we'll see a boom in requests from this sector.

In general, I wonder if we'll be able to see a change in participation now that the tech plan requirement has been relaxed.  

If I were more ambitious, I'd look at the percentage of entities in each category get Priority Two funding.  I'll bet school participation would drop into the single digits.

E-Rate gets dynamic

I just learned that General Dynamics purchased Vangent.  If you know what that has to do with the E-Rate, then you are way too far down the rabbit hole, and you need an E-Rate intervention.

If you've been reading this blog since 2007, you may remember that Vangent purchased Pearson's government services division, and with it the contract to run the Lawrence, KS contact center.  So if you have had the misfortune of mailing any forms, or have had to contact the Client Service Bureau, you have had contact with a Vangent employee.  From now on, it will be a General Dynamics employee.

Just for kicks, I checked to see if General Dynamics is a service provider.  The answer seems to be no, although a couple of divisions have SPINs, and one of them was approved for funding in 1999, but no funding was disbursed.  I guess schools and libraries don't have much use for advanced weapon systems.

Does this mean PIA gets to use F-16s now?

Pointless criteria

So I was looking at the eligibility of dormitories for E-Rate support, and I noticed something about the conditions for eligibility of dorms as laid out in the Sixth Report & Order: most of the criteria are irrelevant.  The Order says that dormitories are eligible for:

1. schools on Tribal lands
2. schools designed to serve students with medical needs
3. schools designed to serve students with physical, cognitive or behavioral disabilities
4. schools where 35 percent or more of their students are eligible for the national school lunch program
5. juvenile justice facilities

But the Order implies that dormitories are non-instructional facilities (NIFs), and earlier FCC decisions denying funding to dorms were all for internal connections, so dormitories have always been eligible for Priority One service.  The only time a dormitory needs to satisfy one of the criteria above is when applying for Priority Two services.  So criterion #4 makes the others pretty much irrelevant.  Schools with less than 35% NSLP students have at best a 60% discount, which means they aren't getting Priority Two funding, anyway.  (Unless we get another capricious rollover decision.)  And in the real world, most schools which meet any of the other 4 criteria will also meet criteria #4.

FCC wrongs states' rights

The FCC is on a competitive bidding tear.  After Monday's decision on 11 appeals, which I disliked, the Commission fired off two more unpleasant decisions on Wednesday.  Both decisions look reasonable for the individual cases, but are trouble for the big picture.

First, the FCC granted an appeal where the applicant put a service provider's name in the Form 470.  The good news: "We instruct USAC, if otherwise appropriate, to approve all currently pending applications and appeals in which an applicant failed to state “or equivalent” when listing a specific manufacturer’s name, brand, product or service on the FCC Form 470s."  A massive mulligan for all earlier errors.  The bad news: "for Form 470s or RFPs posted for Funding Year 2013 or thereafter, applicants must not include the manufacturer’s name or brand on their FCC Form 470 or in their RFPs unless they also use the words 'or equivalent' to describe the requested product or service."  Oh, dear.

It just bothers me when the FCC mandates poor engineering.  No competent network engineer builds a network with a mishmash of manufacturers.  Training staff to support multiple manufacturers and trying to make the equipment interact correctly just isn't cost-effective.  I think the lawyers at the FCC should go down to the FCC's IT shop and ask the network engineers about mixing manufacturers.  Don't get me started on the interoperability of PBXes from different manufacturers.

And since it has been common practice for applicants to put make and/or model on 470s (I picked 5 manufacturers and found 2,710 mentions in the 470s for FY2010), we have another situation where hundreds of applicants will be denied for doing the same thing they've been doing for years.

But it gets worse.  How are service providers going to bid on maintenance?  Applicants are no longer allowed to tell bidders the make or model of equipment they want supported.  The Commission has just ensured that only the incumbent service provider will be able to bid.

Second, the FCC denied an appeal where they didn't think price was the primary factor in vendor selection.  I couldn't understand the FCC's explanation of the applicant's explanation of the weighting scheme, so I can't complain about that.  And I have no problem with price being the primary factor.  What smacked me in the face were three statements explaining why competitive bidding was so important.  I've probably read them before in other decisions, but today they jumped out today.

1.  "[C]ompetitive bidding is the most efficient means for ensuring that eligible schools and libraries are informed about all of the choices available to them."
2. "Competitive bidding also helps to achieve the Commission’s goals of full and open competition resulting in the most cost-effective use of limited program funds." 
3. "Absent competitive bidding, prices charged to schools and libraries for eligible products and services may be needlessly high."

I disagree:

1. The 470 process prevents applicants from getting informed of what choices are available.  Because in order to post a 470, you often have to choose what you want to ask for. For example, you can't ask for concurrent-call pricing on VoIP if you don't know that exists, so you end up asking for VoIP for 150 phone sets, which costs $4,500/month, when all you really need is 20 concurrent call paths, which costs $1,200/month.  Because the FCC restricts what information service providers can give applicants before the 470 is posted, 470s are necessarily ill-informed.  And getting back to the issue of this appeal, making price the primary factor does not make anyone better informed about available choices.
2. The 470 process drives up prices by forcing applicants to lock in service provider, model and price a full 18 months before they plan to purchase equipment (and 6 months before they plan to purchase services).  So when it comes time for equipment installation, applicants routinely have to change almost every item on the equipment list, but since they are locked into a single service provider, the service provider can name any price it wants for the updated equipment.
3. OK, that statement is true, but so is this one: "Because of competitive bidding, prices charged to schools and libraries for eligible products and services may be needlessly high."  Sometimes competitive bidding lowers prices.  Sometimes the FCC's competitive bidding rules, when laid on top of state purchasing law, raise costs.  The implication of the sentence is that competitive bidding prevents needlessly high costs, and that's not usually true.  I can't say whether the process more often results in higher prices for all applicants, but it's certainly true in purchases I'm involved in.  Because I know how to get vendors to lower their prices, through competition, negotiation, etc.  And the 470 process prevents me from doing so.

My gripe comes down to semantics.  "Competition" does all the things the FCC mentioned in the 3 sentences.  "Competitive bidding" is much less effective; the bid process restricts applicant flexibility, and the main goal of most competitive bidding rules is to prevent cheating, not lower costs.  "The FCC's competitive bidding rules" are fantastically ineffective, because they are overlaid over state rules, prevent communication between the parties, and create a perverse timing.

The deeper the FCC dives into competitive bidding rules, the more I'm convinced that they need to get out of the business of regulating competitive bidding.  It is a role more properly left to state and local governments.

RFPs on Qo'noS

The latest appeal decision from the FCC further clarifies what "open and fair competition" means, and .  The FCC granted 5 appeals, and upheld 6 denials, confirming that when it comes to competitive bidding, the FCC is more stingy with waivers than it is with other violations.

The most interesting case was Klamath-Trinity, and not just because it sounds like a Klingon Catholic school.  The FCC said that the competition wasn't fair because:

1. Klamath-Trinity's RFP contained 8 pages of network diagrams, etc., 
2. The Form 470 didn't say that an RFP was available.
3. The 470 was general.  (I checked the 470 in question, and the description was pretty brief: "Connecting 7 Schools with 123 rooms with approximately 435 computers.")
4. "Klamath-Trinity said it only provided the RFP to parties that requested it."

That fourth point is troubling.  I mean, to whom should the Klingons for Christ have sent the RFP?  But later in the decision, Hesperia Unified (which sounds like a benevolent coalition of planets in an Asimov novel) gets a waiver, because it provided copies of the RFP to all bidders.  The implications seems to be that the Klingons didn't send out the RFP unless a potential bidder specifically said, "Show me the RFP."  I doubt that's how the Klingons behaved, but that seems to be the FCC line of reasoning.

Alas, this decision doesn't get down to specifics.  It leaves two vital questions unanswered: 

1. How much information can applicants give out in response to service provider questions? 
2. What does "RFP" mean?  

 The FCC said that 2 of the applicants (whose names are not SciFi-ish, so I won't mention them) didn't violate bidding rules, because they "merely provided guidance directing potential bidders to already-filed FCC Forms 470."  Hesperia did violate rules by giving all bidders info that was not on the 470 (but got a waiver).  Apparently, any information given to service providers which goes beyond what is on the 470 constitutes an RFP.

Since this decision also reinforces the requirement that both the 470 and the "RFP" (whatever that is) be available to bidders for 28 days before the contract is signed, and this decision seems to be saying that responses to vendor questions can be considered an RFP, applicants would be wise not to answer any questions from bidders.  Because if you answer a question, you have to restart the 28-day waiting period.

So a fair and open bidding process is one in which applicants do not answer questions from potential bidders.

Things are even uglier when we bring in state rules.  If I check the "I have an RFP" box, but whatever info I give vendors doesn't meet the state requirements for an RFP, the losers can get the bid thrown out under state law.  It seems to me that the FCC has left applicants with two choices: either refuse to give bidders any information beyond what is on the 470, or publish an RFP which complies with state laws, which forces applicants into a very delicate dance of satisfying both state and FCC requirements for competitive bidding.

I've said it before and I'll say it again: E-Rate forms should not use the term RFP.  Even better, the FCC should stop regulating the procurement process of schools and libraries and leave it to the states.

Show us the money!

I'm hearing John Lennon singing, "Imagine all the applicants getting Priority Two."  But while the rest of us are dreaming, John Harrington over at Funds for Learning has come up with a plan.  He noticed that the new Connect American Fund has $4.5 billion available annually, and has asked the FCC to use some of that funding to make up on the funding shortage that the E-Rate faces every year.

And you can help.  You can sign this online petition (WARNING: when you open this page, music plays, so mute your speakers first).  Let's deluge the FCC with our support for more E-Rate funding.

Global warming and the FCC's IT infrastructure

Faithful readers know that I fear that hraunfoss, the FCC server named for an Icelandic waterfall, is slowly drying up.  Well, just today I noticed an example of a server that has all but dried up.

If PIA thinks you don't have an FCC RN, they direct you to svartifoss2.fcc.gov, which used to host the FCC's CORES registration system.  Svartifoss2 apparently still exists, but seems to exist only to forward requests to the appropriate server.

It seems that hraunfoss has avoided a similar fate for now, but it makes me worry.  With the melting of the glaciers in Iceland, the actual waterfalls are endangered, and it would be nice to think that the FCC could at least carry on the names.

Today's oxymoron

Driving by our local theater, I saw this movie on the marquis:
http://www.sweetpiamovie.com

The Dating Game

Funds for Learning has made the suggestion that the dates of the window should be fixed.  I agree completely.

I'm at a conference today, and the number one question I'm getting from people walking by is, "When will we be filing this year?"  The answer is "I don't know."  OK, so I can tell them that it looks like we'll have a window very similar to last year, and the USAC Board confirmed that timing this week, but we still don't know the actual dates.

Imagine if the IRS waited until January each year to announce when your taxes would be due.

At least it's much better than in the past, when the window would open a few days after the Eligible Services List was released.

Now, I would like to see the window close much later than it is now, but I would settle for at least having a set date.  Imagine how nice it would be to know that 471s were due on March 25th each year.

Now if we could just figure out a way to make the window close on June 30th....

Time to lose the "entity"

Can you hear my teeth grinding?  Once again, USAC's New Brief is trying to explain "entities."  As I've said in the past, the word "entity" should be scrubbed out of every corner of this program.  Because "entity" and "billed entity" mean two different things, and the distinction is not consistently observed.

Want to find the entity number for a particular school in your district?  Use the Billed Entity Number Search tool, even though you're not looking for a billed entity.

As in the past, the News Brief says you can put an "entity number" in Block 1, when in fact, you should only put a Billed Entity Number in Block 1.  The confusion goes on.

We should be talking about "organizations" and "locations," not "billed entities" and "entities."

Or maybe my aversion to the word "entity" is left over from this movie.

The starting pistol is loaded

The ESL for 2012 has been released!  Long live the ESL!  I haven't read the whole list yet, but the FCC says they mostly adopted the draft ESL, and I already commented on the draft.

The FCC also authorized USAC to open the filing window no earlier than November 28th.  First, kudos to the FCC for obeying their own 60-days-between-approval-of-ESL-and-opening-of-window rule.  Two years in a row!  But more importantly, it's time for the annual window pool.  When will it open?  When will it close?

My bets:
Open: January 2nd
Close: March 22nd

Lots more ministers and clerics

OK, so I bemoaned the fact that the E-Rate Correction Order is being used to tighten what kind of errors can be corrected after a form is filed.  In their recent "News for the Week," E-Rate Central pointed out that the E-Rate Correction Deadline Order actually says that more ministerial and clerical errors are listed in the Ann Arbor Order.  That order lists the following ministerial and clerical errors:

1. failing to timely notify USAC to correct a USAC clerical error,
2. entering on their FCC Form 471 the wrong
• FCC Form 470 number,
• billed entity number
• billed entity number/worksheet number 
3. entering the wrong name or service provider identification number (SPIN)
4. entering the wrong expiration date for a contract
5. erroneously characterizing the purchase and installation of equipment as a recurring service
6. making a calculation error
7. entering the monthly charge as the annual charge
8. entering the discounted annual price rather than the pre-discount annual price
9. entering the amount that a service provider was mistakenly temporarily charging rather than the contracted monthly rate
10. miscalculating its discount rate
11. failing to separately list a building where equipment was to be located
12. failing to enter a request for telecommunications service that was clearly indicated on its item 21 attachment
13. basing its block 5 funding requests on the wrong FCC Form 471 block 4 worksheet
14. selecting the wrong term or service
15. selecting the wrong category of service in its FCC Form 471
16. making a typographical error in recording the cost of ineligible equipment in response to a USAC request for additional data
17. failing to follow the correct procedure for modifying its FCC Form471
18. mistakenly providing the wrong documentation concerning a purchase
19. describing the service it purchased as for its entire district when it was only intended to serve a single elementary school
20. omitting a service from a service substitution request
21. entering the wrong application number on the certifications it submitted 
22. failing to press the submit button to submit its otherwise completed application

Now if we could somehow get PIA to accept all of the above as minesterial and clerical without having to provide explanations....

Not the worst name

I was just skimming another Ex Parte to the FCC, and it struck me: part of the Universal Service Fund is something that is called the "High Cost Program."  In the past, I have always taken it as intended: a program to subsidize telecommunications in places where the cost of providing telecom services is high, ergo the High Cost Program.  But today it occurred to me what that name looks like to someone who doesn't know the USF.

If I were looking to get rid of expensive government programs, the "High Cost Program" seems like a really good place to start.

So while I often complain about the name "E-Rate" and its controversial spelling, things could be worse.

Appeal of the day

My favorite FCC appeal today would be very interesting, in that it challenges the authority of auditors to examine compliance with state and local procurement laws, but the audits are just a bad memory now, so it will only set a precedent for past cases.

It's my favorite because it actually mentions Kafka by name. Audits and cost-effectiveness reviews often make me think of Kafka , so it's nice to see someone finally mention it in an appeal.

I did a little research, and while I couldn't find any previous mention of Kafka in the E-Rate proceeding, I did find a comment in another proceeding before the FCC which actually quotes from The Trial, complete with citation telling you in which paragraphs you can find the quote. Bonus style points!

I've been rolled over

I feel like a curmudgeon. The FCC has declared that all Priority Two funding requests for 2010-2011 will be funded. Everyone is celebrating. I’m grumbling.

My first complaint: the FCC’s own rules say that the rollover should take place in the second quarter of each year. We’re past the middle of the third quarter. A couple of months delay doesn’t really bother me, but it’s allowed the FCC to snag funds from USAC’s August 2nd projections, which basically means taking something like $250 million from next year’s rollover and putting it into this year’s.

What’s really got my goat is the rollover of funds into a funding year that is already over. I’ve already said that rolling funds into the current year (in this case, FY2011) doesn’t allow applicants to plan properly; funds should be rolled into the next funding year (FY2012). But to roll them into FY2010 two months after the end of the funding year is just terrible.

Look at the experience of a 79% applicant. In January they got their denial for FY2010, so now they have to scale back their project, or drop it all together, or scramble to post a Form 470 for FY2011, if state rules will allow such last-minute bidding. Then two months after the funding year is over, they find out that they are going to get funded. Well, maybe they’re going to get funded; they haven’t been through PIA yet. I’m guessing PIA will put pending FY2011 applications on the back burner, but there is often a lot of back-and-forth about Priority Two requests, so I’m guessing it will be the end of September before most of the FRNs are approved. Now most Priority Two projects work on a SPI basis, so the service provider won’t want to lift a finger until the 486 is approved, so now we’re looking at October. But for a disruptive project, it will have to wait until Summer 2012, or maybe until Winter Break if it’s not too big a project.

Is it any wonder applicants feel whip-sawed by this program? Even when your funding is approved, it feels like you’re being punished. Back in December 2009, you had the foresight to apply for funding for a project starting in July 2011. Others said you were foolish to lock into a contract 18 months before the start of the project, but you had faith. Then you get denied for funding, and then that gets reversed 21 months after you started the project, so you’re going to have to wait until next Summer and start the project 31 months after you bid it out. You’ll certainly have to change every part in the project, and the way integrators are going belly up, maybe have to change service providers, too. But you can’t rebid the project, so how are you going to comply with state law when you’re buying completely different equipment from your original RFP, maybe from a different vendor?

And it just seems fantastically unfair that without warning, 40% applicants are going to get Priority Two funding this year. Since the Form 470 process increases costs and reduces functionality on projects, I have advised clients at the 40% level not to apply for E-Rate funding. Why is it that the FCC could so easily fund all applications below 80%? Because 80% is like an electric dog fence: for years, anyone who applied for Priority Two funding with less than an 80% discount had an unpleasant experience. Now the FCC doesn’t have to turn on the dog fence; applicants have learned to stay in the yard.

So maybe you could discount all the above as sour grapes. If I’d been that stubborn dog who kept throwing himself painfully into the electric fence, I’d have that Priority Two squirrel in my mouth right now. I didn’t, and now I’m grumbling. But here’s a complaint that has nothing to do with the fence: the E-Rate program is running out of money. There will be enough money to cover Priority One for a lot of years, but the ability to cover Priority Two requests from 90% applicants is likely to run out in a few years. So this rollover seems to me like the Social Security Administration saying, “Hey, we have a lot of money right now, so let’s make a rule that anyone who’s over 50 and unemployed at the moment gets to go on Social Security starting right now.” Yes, it would be wonderful for 53-year-olds who can’t find a job and could live on Social Security. But it would be fantastically irresponsible, since we know the program will run out of money down the road.

So why did the FCC do this? The three reasons I can think of:

1. “Hey, we got some money lying around, let’s throw it at those people. It’ll be like one of those hilarious slapstick scenes where someone begs and begs for a pie, and then they get it thrown in their face.” Sorry, I just had to get that out of my system.
2. It’s good PR for the program to be able to say that FY2011 was fully funded.
3. It will cause an increase in Priority Two applications, as 40% applicants start to think, “Hey, you never know.” The increase in funding demand will show how desperately needed the program is, and keep the anti-E-Rate wolves at bay.

What should the FCC have done?

1. Fund FY2010 requests at 81% and above.
2. Roll enough into FY2011 to fund requests at 83% and above.
3. Take the rest of the money and roll it into FY2012.
4. Start setting the denial threshold at the start of the filing window.

Esta fuente no se SECA

SECA is at it again. They've sent the FCC another batch of good ideas. Here's a list. Of course I'm going to editorialize.

1. Direct reimbursement to applicants: Hell, yeah! But SECA neglects to mention the real reason that this hasn't happened yet: Currently, USAC sends electronic payments to hundreds of service providers, but if they reimburse applicants directly, suddenly they'll be printing and mailing checks to thousands of applicants. At the beginning of November, they'd need one big honking printer. And I shudder to think what address they'd send the checks to. Look for hundreds of missing checks each year.
2. Automatic Deadline Extensions for $0-Funded Invoices: OK, that would be nice.
3. Problem Resolution Outreach to Correct BEAR Error: Yup. I get that USAC wants to process all invoices within 30 days, but surely they could ask for a little info before pushing the "pass zero" button. And applicants weren't clamoring for quicker payment on BEARs; service providers were clamoring for quicker payment on SPIs. So do problem resolution on BEARs, not SPIs.
4. Enhance online BEAR: Yes to all those changes, especially the ability to go back and alter a BEAR after submitting but before service provider certification. I can't tell you the number of times that the service provider has a different total than I do, and I have to redo the BEAR over a few cents.
5. Applicants should be told when the invoicing deadline has passed and be given a second chance to invoice: Now that is a good suggestion that I had not heard before. It would be consistent with what USAC does for 471s and 486s.
6. Top discount percentage should be 75%: Yes! Yes! Yes! I've always thought that the 90% discount was too high for Priority Two. Now I'm starting to think it's too high for Priority One.
7. An applicant portal, creating "a virtually paperless E-rate application process": Oh, yeah. If they could really normalize the database, where you could put services on the 470, then when you make the Item 21 Attachment, you get to choose from things you put on the 470, then Block 5 of the 471 is filled in based on the Item 21 Attachment, and on the BEAR you can associate charges with items in the Item 21 Attachment. Something needs to be done about the creaky USAC codebase. I enjoy the quirks in the current system more than most people, but I'd trade it for some more reliability.
8. Comprehensive Requirements Manual: Oh, yes. Way back at my first Train-the-Trainer (in 2001, I think), they asked for suggestions for improving the program, and this was at the top of my list. Aside from the obvious benefit of making it easier for applicants to access program rules, the creation of a rulebook would: 1) show just how massive and complex the rules are for this program; and 2) show how quickly the rules shift in this program. It would be a powerful impetus to simplify the rules and to change them only quarterly, instead of the current practice of making changes whenever we feel like it.
9. Remove Funding Year from the Form 470: I've already said that this should be done.
10. On 470, remove distinction between Telecom Services and Internet Access, and between Internal Connections and Basic Maintenance: No, unless the distinction also disappears from the Eligible Services List. Having 4 categories in 2 priorities seems to add complexity, but really it just reveals the complexity that is there. I'm all for having the ridiculous complexity of this program in everybody's face. Because when you try to hide the complexity, the applicants suffer.

I've always thought SECA was a little snooty, sitting off by themselves at the DC training every year, but now I think they're heroes. A couple more of these salvos of common sense, and I'll have to start a fan club.

CIPA changes coming in July

And the wheels of progress grind on. Back in October 2008, Congress passed a change to the Children's Internet Protection Act (CIPA). In November 2009, the FCC released an NPRM to put the law into force. And last week, we finally got the new rules.

The bottom line: By July 2012, for all schools applying for Internet Access, Internal Connections or Basic Maintenance, the "Internet safety policy must provide for the education of minors about appropriate online behavior, including interacting with other individuals on social networking websites and in chat rooms and cyberbullying awareness and response."

Libraries are exempt from the training requirement. I guess that since the form doesn't actually list the requirements, they won't need to create a forked certification.

The good news is that the FCC gave everyone plenty of time to update their policies. Now the question is, will schools get the message? And will those schools that don't find out about the new rules get waivers? Applicants who are new to the E-Rate process get a one-year grace period, but schools who have applied under the old rules must comply by July 2012.

Then paragraph 9 sent a chill down my spine: "We also revise certain rules to conform more accurately to the existing statutory language, as proposed in the NPRM. We emphasize that these revisions do not impose additional obligations on E-rate participants, but merely mirror the existing statutory language and codify existing statutory requirements. Many of our modifications will simplify the application process...." Dang, there are 16 paragraphs left. 16 paragraphs of minor clarifications? Minor clarifications have had a tendency to be major retroactive rule changes. I expected a bumpy ride.

But these really do seem to be both minor and clarifications. Whew! Paragraphs 14-17 are especially nice, as they let applicants decide when and how to disable filters, and what content is inappropriate.

Paragraph 23 is a disappointment. There has been quite a bit of confusion about how CIPA requirements apply to staff smartphones. Since they can browse the Internet, shouldn't they be filtered? And with the piloting of remote Internet access for students (Learning on the Go, nee Education Deployed Ubiquitously), it becomes a real issue. The FCC response? "That's a good question. Maybe we'll think about that." But better no response than a bad response, I guess.

Before it was the SLD

How did I miss this movie for all these years? It came out in 1998; coincidence? I don't think so. I mean, look at this picture. In the middle, I think that's what the Senior Manager for Customer Service looked like without the moustache. And apparently in 1998, the guy running invoicing sported a mohawk. And yup, that's the head of PIA on the left, with a look that says, "Ugh! This app is nowhere close to meeting the Minimum Processing Standards. Get it out of my sight!"

Being the responsible consultant that I am, I have added the movie to my Netflix queue. Hey, I'll probably learn more about the E-Rate from watching that movie than reading all the guidance on the new gifting rules.

Ministers and clerics of the world, unite!

Well, the Erate [sic] Correction Deadline Order has had the effect I feared: PIA is now investigating whether errors are truly "ministerial" or "clerical." PIA is asking applicants how errors occurred, including errors that applicants used to be able to correct without delving into the motivation behind the error.

It's got me wondering: How long will it be before we see appeals claiming that errors were ministerial due to temporary insanity?

SECA and Morgan Freeman

In what I'm calling (with apologies to my high school Latin teachers) a sua sponte a posteriori ex parte tabella maxima, the State E-Rate Coordinators Alliance (SECA) has filed with the FCC a request to fix the problem of Black Holes and COMADs. Don't know what black holes have to do with the E-Rate? I don't know who coined the term, but among E-Rate cognoscenti, a "Black Hole" application is an application that has been languishing for years, neither approved or denied. A lot of them are tied to investigations of an applicant, service provider or consultant. Or so one can surmise, since no one can get any information about the reason for the Black Hole.

Pointless aside: Of course this filing has me thinking about Star Trek, what with Black Holes and COMADs (which remind me of NOMAD). Which I guess makes the Chair of SECA Captain Kirk. And I know who's Spock. I don't know the rest of the SECA gang well enough to decide who gets to be Bones, Scotty, Sulu, Chekhov, Uhura, etc.

The first thing that struck me was that there were so few Black Hole applications. I mean, every time we get together for an E-mpa® meeting, someone has a Black Hole horror story. It looks like only about 150 applications from before 2008 are in a Black Hole. I would have guessed 1,000, based on the number of stories I've heard.

But on to the important part of the document, the proposed solutions. And, of course, my ill-considered opinion of them.

Bill of Rights: Oh, yeah! Any one of the items on the list would vastly improve the program. Every item seems like common sense to anyone who hasn't been involved with the E-Rate, but to those of us in the E-Rate trenches, they're like dreams. Well, except if they actually implemented this bill of rights, E-Rate consultants would be much less necessary, and I still have to get my kids through college.

Increased Transparency: Less revolutionary, but also nice. Basically just giving people a clue on how they got into a Black Hole, and letting the public know how many applications are sitting in a Black Hole.

“Under Review” Decisions: Who knew that USAC could issue an FCDL with some of the FRNs marked "Under Review"? So why don't they? Not that I'm surprised; they are also reluctant to use the "As Yet Unfunded" option for FRNs that are waiting to see if they'll clear the denial threshold. My guess? The metrics on their contract don't count an application as complete until all FRNs are decided, so why bother with a partial decision?

Code 9 Procedures: I'm not so sure about this one. SECA is trying to prevent abuse of the ability to make anonymous accusations. I don't think it's that big a problem. I may be wrong, but I have the impression that while every Code 9 accusation is investigated, applications don't sit in a Black Hole unless there is some evidence of a problem. And I don't like impinging on the ability of people to call in anonymously.

Recovery of Funds Deadline: I like the idea of saying that after 5 years, no funds will be recovered. But I don't like their suggestion of forcing USAC to wrap up audits quickly. Because what USAC is doing is considering whether violations found by auditors merit recovery, and I want them to take their sweet time about it. And really, is recovery 7 years after the fact any worse that 5 years after the fact?

Finality of USAC Funding Commitment Decisions Letters: Hear, hear! Why do FCDLs have to count as funding commitments if the decision is going to be reviewed again at invoicing and maybe again later in an audit? If there was intentional deception, then OK, go get them. But if an applicant was forthright in their application, and USAC mistakenly approved funding improperly, don't punish the applicant. Plus, I love the word estoppel. (But if they start estopping things, will a controversy arise of "eStop" vs. "E-Stop"?)

Gradations of Financial COMAD Penalties: Sounds like a good idea, but it's going to add to USAC's workload, and really, isn't an applicant going to appeal any COMAD to the FCC? So let the FCC decide if they want to be in the business of cost-allocating COMADs.

I think I'll have to file an ex post facto ego te amo in support of SECA's Bill of Rights.

Now, hidden forms

You've heard me bellyache about the secret rules and the hidden rules, but a new appeal has got me bothered about hidden forms.

Seems an applicant got two bids for its WAN, and selected the service provider with the higher bid. That's OK under E-Rate rules, as long as price was the primary factor. And the district says that price was the primary factor, and has supplied some evidence to support that position. But because they could not produce "RFP Response Evaluation Worksheets," they were found to have violated program rules.

So now we have a hidden form. Applicants have to retain a bid evaluation matrix. Nowhere do the rules say you have to make one. Certainly, the USAC Web pages on bid evaluation imply that you should have a written evaluation, but nowhere does it say that one must be created, and nowhere does it say what form it must take.

I've made this point before when talking about tech plans:

If USAC wants applicants to document something in a particular way, they should create a form for it. I hate forms as much as the next person, but they do clearly delineate what information must be recorded. Creating a Form 666 (or whatever) to record bid evaluations wouldn't add new rules or complexity to the process, it would reveal the rules and complexity that already exist, but are obscured by fuzzy language like "construct an evaluation."

I don't mind if USAC and the FCC use vague language to describe vague requirements, but if there is a specific program requirement, it should be described by specific language. Don't say "construct an evaluation" if you mean "build a bid evaluation matrix like the example we've provided, being sure to show the weight given to each criterion."

As it stands now, most applicants don't realize that they have to create written evaluation documents that clearly show that price was the primary factor. Because the rules don't say that they have to create such a document.

Let's bring the ridiculous number of required documents out in the open by making them all forms. If we could stack the vast quantity of rules and piles of required documentation in front of the Commissioners, maybe they would rethink the process that has been created to transfer $3,000 (the median FRN amount) to governmental and non-profit organizations.

Blog Hygiene

No E-Rate content in this post.

I just wanted to let you know that I've made a housekeeping change in this blog. When I'm reading something on the Web and come to a hyperlink, I almost always want the link to open in a new tab on my browser, so I can keep reading and look at the hyperlink later. And I write my blog assuming that readers are doing the same thing.

So I've finally figured out how to make my blog automatically open a new tab when you click on a link. Don't be alarmed when you click on a link and a new tab opens up. Click here to see how links work now. As an added bonus, when you click you'll get to see the Web site of the greatest E-Rate consulting firm on Earth. (And I don't want to hear any whining from other E-Rate consulting firms that think they're the greatest; my Mom says On-Tech is the best, and you'd better not disagree with my Mom.)

I wish I could make the new tab open behind the current window, to avoid interrupting the flow of my splendid prose, but that is beyond my poor HTML skills.

I've read that people hate sites that pop open new tabs, but that's just too bad. I like it, and since this blog exists to amuse me, new tabs it is.

Is Joe Barton Megamind?

Just yesterday as I drove along listening to the jibber-jabber about our government hurtling towards default, and what it would mean, I breathed a sigh of relief that the Universal Service Fund is not part of the budget. So I think even a complete government shutdown wouldn't stop the E-Rate. At least not for a while.

I've described before the plot to kill the E-Rate by bringing it into the US budget, then bleeding it dry. That plan died when the Republicans lost control of the government. Well, they're back. At first it looked like they would join the movement to expand the E-Rate, which I'm afraid may be the E-Rate's undoing. But I was feeling quite safe.

Then this morning I read this: House Majority Leader Eric Cantor has floated the idea of taking $1 billion from the USF to help pay down the debt. But wait, other Republicans are riding to the USF's defense, led by Rep. Joe Barton. Could you hear my jaw dropping? I've been dissing Joe "Bleed It Dry" Barton ever since he said that he wanted to kill the E-Rate by underfunding it. Now Barton is saying, "...while I think the fund needs to be reduced, I am against using the money collected for anything other than its intended purpose."

It's like the plot of Megamind come to life. Suddenly, the villain is a hero. Well, except for that "the fund needs to be reduced" part.

Equivalent <> identical

Today's shake of the head goes to Edline's comments on the ESL. Here's what got my head moving:

" Given the finding of functional equivalence in the Sixth Report and Order, e-mail service and web hosting service should not be separated in different sections of the ESL but should, instead, be contained in the same section, in one “function” category. Such a result will, to the greatest extent possible, ensure that disparate treatment of these functionally equivalent services does not occur now, or in the future."

Um, well, what the FCC said in paragraph 101 of the Sixth Report & Order was:

"We recognize that the transfer of messages across a school’s hosted website is functionally equivalent to other services that facilitate the ability to communicate such as e-mail, text messaging, voice mail, and paging."

So if Web hosting should be in the same "function" category as e-mail, shouldn't text messaging, voice mail and paging be lumped in there, too? Oh wait, they're all telecom services. So I guess "functionally equivalent" doesn't mean "functionally identical." And it doesn't mean that they should all be treated identically.

And looking more closely at the FCC's order, it doesn't say that Web hosting is functionally equivalent to e-mail. It says that activity like blogging is functionally equivalent. So only part of Web hosting is functionally equivalent.

I can understand why a Web hosting company would want to get lumped in with e-mail: many in the E-Rate community have come out in favor of dumping Web hosting from eligibility, and lashing themselves to a more popular service like e-mail is a good defense. And Edline was using the functionally equivalent argument to try to further stretch the definition of Web hosting.

FCC rocks

Man, I love it when lawyers submit appeals to the FCC.

When school and library employees post, they're basically saying, "We're really sorry, but in your great wisdom and mercy, please grant us our humble request. For the children."

But when the lawyers write appeals, they say things like, "An Order not based on substantial evidence and states mere conjecture … without substantial evidence is arbitrary, capricious, not in accordance with law, unwarranted by the facts. an abuse of discretion and is reversible." (Here's the whole appeal.)

I guess they don't teach the "get more flies with honey" philosophy in law school.

And in a nod to Dave Barry, I will note that "Abuse of Discretion" would be a great name for a rock band.

Hidden rule

So I was reading through the instructions for the Form 471 (looking in vain for definitions of the terms "district" and "consortium") when I came across this nugget:

"In addition, if you are a consortium that includes non-governmental entities ineligible for universal service support, you should note that you cannot negotiate pre-discount prices below tariff rates for interstate services from incumbent local telephone companies."

Huh?

OK, first off, I'm always whining about the secret rules, but this is a prime example of a hidden rule. I mean, you have a rule about when you're allowed to negotiate rates , and the best place to put it is the instructions for the Form 471 in the section on how to fill out Item 5a (where you say if you're a school, library, district or consortium)? Let's assume the ridiculous, and say that applicants could read all the rules. Even so, the Form 471 is completed after rates are negotiated, so it would be reasonable for applicants to read the instructions for that form after rates are negotiated.

Second, the rule is weird. So if my consortium has non-governmental entities eligible for support, or governmental entities not eligible for support, I'm still OK to negotiate a better rate, but if one of the entities is both non-governmental and not eligible for E-Rate, then I have to take the tariff rate? And if I go with a competitive local exchange carrier instead of an incumbent, I can negotiate a lower rate? For a rule to be so odd, there must be some hairy FCC politics behind it.

My ESL comments

The FCC has announced the comment period for the changes to the 2012 ESL (if you don't know that ESL stands for Eligible Services List, count your blessings and skip the rest of this post). The draft ESL is here.

OK, so here are the changes (in bold), and my initial reaction (not bold):

1. Funds are allocated according to rules of Priority: Yawn
2. Any telecommunications service is eligible, but all other services are eligible only if specifically listed: The second clause is good, but saying that "any telecommunications service" is going to cause confusion. Because for Joe Lunchbox, anything that appears on a phone bill is a "telecommunications service." Better to say "any service that meets the definition of 'telecommunications service' under 47 CFR blahblahblah."
3. Services funded under the “Learning on the Go” program satisfy the requirement that services must be used for an “educational purpose.”: Redundant clarification is OK with me, even if it only pertains to 20 out of the thousands of applicants. But I am sad that the "Education Deployed Ubiquitously" name for the program is gone. I loved that name.
4. Removed rationale for included Interconnected VoIP: Yawn
5. Moved everything out of "Other Eligible Telecommunications Services" into other areas: Seems fine to me.
6. Updated entry for dark and lit fiber: The clarification is pretty brief, given all the confusion, but it makes very clear that the E-Rate will pay for the construction of a lit fiber network, but not for the construction of a dark fiber network.
7. Replaced and updated the description of eligible Internet Access service: Boy, the new definition sure makes Web hosting stick out like a sore thumb. It does help to clarify the "basic conduit" concept. But they really need to clarify what they mean by "billing management, introductory information content, and navigational systems."
8. Moved "Distance Learning and Video Conferencing" eligibility info: OK, but no matter what the FCC does, some videoconferencing company is going to discover the E-Rate, skim the ESL, and come to the conclusion that their product is eligible, and stir up confusion with their advertising. It happens every year.
9. Deleted "Internet-based" from the "E-mail Service" description: OK, but I'd like to see a clear statement on whether electronic messaging needs to reach the Internet in order to be eligible. For example, does "e-mail" include closed messaging systems that only allows students to contact teachers?
10. Satellite Internet service can be eligible: Fine. Most new Internet access contracts I've been seeing are Internet over Ethernet, so why not have that on the list?
11. Firewall service can only be provided by ISP, and cannot be separately priced: I'd rather have them say that firewall service is not eligible, but can sometimes be included as an Ancillary Use.
12. Mobile hotspots only eligible if on-campus and not duplicative: Sounds OK to me.
13. Changed "Other Eligible Internet Access Services" to "Internet-Related Services": I like the new name better.
14. Lit or dark fiber can be requested as Internet access: I don't understand how lit fiber is not a telecommunications service, but I'm not an FCC lawyer.
15. Changed the Web hosting description: They just made it eligible for school districts to offer a panoply of services to students and parents: file storage, blogging, webmail, messaging. And the new definition does nothing to dissuade the vendors of Web-enabled applications (like student management or grading) from trying to say that some of their service is eligible.
16. Revised description of ineligible Web hosting services, moved it to "ineligible" section: Oh wait, here is some more clarification. I sure hope everyone else finds it, now that it's in a separate section. So they took away file storage, but providing webmail for parents is still eligible. And the rules here do make it more difficult for Web-enabled application vendors to shoehorn their products into Web hosting.
17. Password-protected pages for staff not eligible: OK, but it says that such password protection is ineligible if they give staff access "access ineligible tools." That implies two things: 1) pages that are only available to staff are eligible if they access eligible tools, and 2) password-protected pages that give access to ineligible tools are still eligible if they are available to students or parents.
18. Firewall components are eligible in "Data Protection" and "Servers": In my book, a firewall is not a server, but it doesn't matter.
19. Clarified which software is not eligible: Fine.
20. Moved info on ineligibility of antennas: OK, but I like the idea of keeping the info on ineligibility next to the info on eligibility, rather than putting them on different pages.
21. Restrictions on remote access: Inconsequential.
22. Smartphones and tablets not eligible: Good.
23. BMIC can be cost-allocated, and on-site service is eligible only if cost-effective: The change is fine, but the original language is a problem: when the FCC says "on-site service," they mean "paying for service provider staff to be on the client premises full time." Whereas the rest of the world thinks that "on-site services" means service that takes place on site, like a switch breaks and you call someone to come out and fix it, which the FCC calls "off-site." So in FCCspeak, "off-site service" is generally performed on site. I think the ESL should talk about "duty station" instead of "on-site"/"off-site."
24. BMIC reimbursed based on actual work performed: BMIC takes the crown for Most Unclear Eligibility, which is saying something, given how murky the eligibility is for Web hosting and dark fiber. The ESL is not better than the Sixth Report & Order and the subsequent clarifying orders and FAQs. It says you can only be reimbursed for actual work performed, but in fact you can get funding for CiscoBase, which is paid for whether work is done or not.
25. "clarified the entry for the Miscellaneous category that 'Miscellaneous' services and products related to services requested in the Telecommunications category should be requested (via FCC Form 471) in the Telecommunications Services or Internet Access category, depending upon the nature of the service provider": And there is my laugh for the day. Because I'm an E-Rate expert, and I have no idea what that clarification means. OK, looking at the draft ESL, I see what they're trying to say. "Nature of the service provider" really means "whether the Service Provider files a Form 499." I know some applicants will not know what a Form 499, but let's be honest that if they don't know whether their service provider is filing that form, they can't know the right way to apply. Let's not try to make the rules appear simpler than they actually are. (Instead, make the rules simpler. Why is there still a separate Internet Access category?)
26. Contingency fees will be reimbursed based on actual work performed: I don't understand how this will work. Does this mean that contingency fees will be approved for funding, and then applicants will have to do a service substitution to convert the contingency into an actual service? I'm thinking all my projects are going to have contingency fees from now on, so we can cover unforeseen expenses.
27. Dark fiber doesn't need a tech plan and is not duplicative if appropriate: Seems to be saying that it is not duplicative to have multiple T-1s and dark fiber linking two sites. I'm not sure that was the intention.
28. All special eligibility conditions for WANs in one entry: If only it were true. The rules for WANs, like the rules for everything else, are splattered across the ESL, the USAC Web site, FCC orders and USAC PowerPoint slides.
29. Added definitions for "failover" and "enhanced multimedia interface": Repeating the definition of "failover" in the definitions section is fine. I would have gone the other way and taken the jargon out, but there are reasons to keep it in. Adding a new definition for a technology on its way out, like ATM, seems unnecessary, so I wouldn't have added "enhanced multimedia interface," but it doesn't do any harm.

To Have or Not to Have

I'm feeling a little dissonance this morning. Back in October, the FCC released the Keyport Order, which said of Keyport's 2004 application:

"the Commission’s rules in effect at the time ... required each entity to maintain, for their purchases of telecommunications and other supported services, 'the kind of procurement records that they maintain for other purchases.' [The applicant], therefore, had no obligation to produce documentation that it would not normally maintain for other purchases."

In last week's Central Islip decision, the FCC said of Central Islip's 2002 application:

"...there is no documentation, i.e., a bid evaluation sheet or bid comparison, showing how the bids were evaluated, scored, or ranked. Thus, we are unable to determine whether Central Islip selected the most cost effective service offering. The absence of this information leads us to conclude that Central Islip failed to demonstrate that its competitive bidding process complied with program rules because it could not show that it conducted a competitive bidding process."

Why the difference? I suppose it could be that the FCC is saying that Central Islip was required by state law to maintain the records, whereas Keyport was not. That might be true, but I'm not so sure. It looks to me like maybe Central Islip bought off state contract, so it wouldn't be required to maintain the records that the FCC wanted to see.

Today's rabbithole? Ontario!

FY2011 Wave 1 funding approvals are still not available from the Data Retrieval Tool, but service providers have known for days, and now it's available through the Automated Search of Commitments.

Anything interesting? Let's see, it looks like the states getting big reimbursements are the ones you'd expect. OK and MS maybe sticking out above the norm, but not outrageously so. WV and GA lagging, but it's only Wave 1, so nothing to get excited about. And the only states who got skunked aren't really states: American Samoa, Northern Mariana Islands, Ontario Canada [insert sound of record scratching]. Ontario?! What the fund? How did that get on the list? Is this a NAFTA thing?

You didn't think I'd just let that go, did you? I put my crack team on it. Our database guy points out that there is no option for Ontario on the Data Retrieval Tool, so there is no way to use the DRT to check if Ontario got any funding. Our intrepid Customer Service Rep noted that the Billed Entity Search tool has an option for ON, but if you try to search for billed entities in ON, you get a server error. Meanwhile, if you go to the "Advanced Search" in the Automated Search of Commitments, the dropdown menu for state does not include Ontario. Other search tools:

Form 470: State dropdown includes ON

Tech Plan Approver Locator: State dropdown does not include ON

I cannot find any evidence of any funding going to Ontario, but maybe that's just what they want us to think....

Another irony in the fire

I got a kick out of the FCC's recent appeal decision, where they took 7 years to forgive an applicant for filing an application 8 days late. But they've outdone themselves this time.

In a recent decision, they rejected 3 requests for review because they were filed too late. OK, the first one was filed 2 years late, but the second and third were filed 59 and 58 days after the orders they were appealing.

Wait, 58 days is too late? I had to go back and look this one up. It's true. According to the order that extends the deadline to appeal from 30 days to 60 days (on an emergency interim basis due to the anthrax attacks), petitions for reconsideration still have to be filed within 30 days. Who knew?

So anyway, these applicants file 29 and 28 days late, respectively, and the FCC responds 2,724 and 3,076 days later, respectively. I can't find an adjective to describe that.

Funding year mind games

Sometimes, I think USAC is messing with me. Well, not USAC exactly. In this case it was Vangent, I think (at least I was give a Vangent e-mail address).

Faithful readers will recall that on Sunday I expressed the opinion that the Form 470 should not be tied to a funding year. Today I get a call asking me which funding year I meant to put on my Form 470.

We put "2012" in Box 2, and they wanted to confirm that we meant 2012-2013.

Hmmm.... Let's think about the current situation. Right now, you can only file a Form 470 for 2011-2012. Even though it's 117 days to late to file a 470 for 2011-2012. Even with the kinder, gentler FCC, it's hard to imagine getting a waiver for a 2011-2012 application that gets started now. The only application that's going to get approved based on a 470 filed now is a 2012-2013 application. But USAC has me blocked.

Mr. Blackwell, take down this wall.

Glass half empty

Allow me to get grumpy when I should be celebrating.

This afternoon I got the first set of notes from a service provider concerning 2011-2012 funding requests. I should be happy:

1. This means that the applicants in question will be getting funded in the first wave.
2. The service provider is really on the ball, which gives me hope that the August bills (and maybe even the July bills) will already show the E-Rate discount.

But I'm grumpy:

1. The service provider spelled the name of the program "Erate."
2. Why do service providers find out before applicants?

On spelling:

I feel like I'm fighting a rear-guard action on hyphenation. First, PIA dropped the hyphen, then the FCC dropped it. Suddenly, the controversy over capitalizing the "R" seems insignificant. (What's that I hear you saying, that controversy always was insignificant? Pshaw!) Are we really going to end up with "Erate"? Sorry, but it looks too much like some declension of "erratum," which may be a fitting name for the program, but is hardly flattering.

On informing applicants:

OK, it's only a few days' difference, but every year it sticks in my craw that the entire E-Rate universe knows about funding approvals before the applicant. Service providers know right now what funding's been approved in Wave 1, a week before applicants find out. State E-Rate Coordinators also find out before applicants. It's all public information, so I don't object to the information being available to everyone, but it just seems unfair that applicants are the last to know.

Thinking Outside Box 2

So I needed to post a Form 470 this week, and a couple of things occurred to me.

First, why does Item 2 (where you fill in the the Funding Year) appear on the Form 470? The 470 is not necessarily tied to a funding year. For multi-year contracts, a Form 470 will be used for several funding years. And for construction projects, it may be necessary to file a Form 470 two years before the funding year. So why tie the Form 470 to a funding year?

While I was thinking about the Form 470's role in the E-Rate process, I realized that it offers a solution to the problems created by the heinous new SPIN change regulations. OK, maybe the Copan Order left things too wide open: applicants could do a SPIN change any time, to any service provider, without giving a reason. The new rules in the Sixth Report & Order remedy abuse that was apparently going on, but throws the baby out with the bathwater: you can't change without good reason, and if you do change, you have to pick whoever was the #2 bidder on the original 470. That means if a new money-saving opportunity comes along, applicants can't take advantage of it for 6-18 months. How about letting applicants switch any time they want, as long as they post a 470? That would stop the kind of abuse that the FCC was trying to stop, while still giving applicants the flexibility to take advantage of more cost-effective solutions that come up in the middle of the funding year.

It would go like this: someone at the school finds out they could save $100/month by switching long distance providers. Under my proposed scheme, the applicant could post a 470, accept bids for 28 days, and then switch providers.

It doesn't solve the problem entirely, since the district personnel who make the decision to change providers are not always aware that saving money by changing service providers is a violation of E-Rate rules, and the people who know the E-Rate rules often don't find out about the switch until it's too late. But at least my mid-year-470 plan would help out applicants who want to save money and are aware of E-Rate rules.

How are the mighty waterfallen

This is the third, and I hope last, post concerning the FCC approval of the PIA procedures. But this one has nothing to do with the actual approval or any of its perceived grammatical flaws.

It's all about the URL. In past years, the approvals of PIA procedures always appeared on hraunfoss.fcc.gov. This year, it's in a slick new format with the URL "www.fcc.gov/document/...." I like the new format, but it increases my concern that hraunfoss is being phased out. Comfortingly, the links at the top of the announcement (that let you open up Word, PDF and text documents) all point to hraunfoss, but if you click on them, you're redirected to transition.fcc.gov. So for the moment, it seems hraunfoss is gone, but not forgotten.

Stayed tuned for more on this unfolding Icelandic saga.

I've got your 30 days right here

On the approval of PIA procedures for 2011, the FCC said, "In addition, on a going-forward basis, USAC should provide the Bureau with USAC's proposed PIA procedures 30 days prior to the opening of the filing window, beginning with the procedures for Funding Year 2012."

Sorry but I just have to put on the grammar curmudgeon hat: "on a going-forward basis" sets my teeth on edge. How about just saying "going forward"? Or perhaps the slightly more elegant "in the future"?

They're pushing the due date earlier. In 2009, the FCC said, “we would ask that you provide the Bureau with USAC's proposed PIA procedures at least 30 days prior to the close of the FCC Form 471 application window.”

Imagine a world where the PIA processing procedures are approved before the opening of the window. The first wave of funding could come out during the window! Now that would be an incentive for applicants to get the 471 done early.

A more pessimistic (realistic?) colleague posed the opposite possibility: this could force USAC to open the window later. Mel Blackwell has said he'd like a shorter window. So maybe this will be the impetus to shorten the window to 50 days....

And they're off!

Hold on to your hats: the FCC has approved the PIA processing standards. USAC has been processing furiously, so there is a big pile of applications just waiting to be approved. Look for a monster first wave just as soon as USAC can warm up the presses to print FCDLs.

Unless.... The FCC mentions "substantive edits" were made. There is a risk that a lot of applications that had made it through PIA will be thrown back into review by those substantive edits.

Of course, we'll never really know: the edits, like the processing rules, are secret.

Trouble in Iceland?

I was looking at the 3 FCC decisions posted last week, and noticed something disconcerting: the server hosting the decisions is transition.fcc.gov. As I have said before, I have an attachment to hraunfoss (and to a lesser extent fjallfoss), so I'm worried that some new URL is going to pop up. As long as they keep the old URLs working, I won't blow a gasket, but if I have to go back and change every link on this blog to an FCC decision, expect harsh words.

Two of the decisions are worth noting, because they're denials. Gone are the heady days after Bishop Perry, when you could get an appeal granted with no justification. And both involved districts complying with state law, but not FCC rules.

Gila Bend is kind of a records-keeping thing: the district could not provide any documentation concerning bids received in response to the Form 470. Moral of the story: if you don't get any bids, make up a memo to the file that says so, and drop it in the file. No matter what, you need to generate some piece of paper that says how you picked your service provider. And then save it for 7 years or so.

Cascade seems like an applicant that didn't know how to put its decisions in the right light. The district admitted several errors:

1. Cascade started getting service before the 470 was posted.
2. Cascade put down its own 470, not the 470 under which the state contract was awarded. (And later gave the wrong 470 for the state contract.)
3. Cascade said it was a month-to-month service, instead of putting the state master contract on the 471.

Let's deal with #3 first, since it is actually the linchpin of the line of argument I think Cascade should have taken. I don't know the situation in Idaho, but in most states, districts can jump on and off the state master contract at any time. So while an underlying contract exists, I would argue that from the district perspective, it is a month-to-month service. If it is a contract, well, I'd say that's a harmless ministerial error.

On to #2: Since we are talking about a month-to-month service, the district was right to post a new 470 and refer to it on the 471. Even if you take the state contract as a contract, the Kalamazoo Reconsideration Order (still my all-time favorite name for an order), which allows consideration of existing contracts as bids, instructs applicants to post a new 470, refer to that 470 on the 471, and for the Contract Award Date, put in the date that the applicant decided that the existing contract was most cost-effective. Which sounds like what Cascade did.

And #1 also vanishes as an issue: there is no problem with treating an existing service as a bid. And until the Sixth Report and Order unfortunately reversed the rule, there was nothing wrong with Cascade having switched service providers in the middle of a funding year.

Since the days are gone when the FCC mercifully granted appeals where applicants made honest mistakes, appellants had better harden their appeals and not admit any mistakes.

And I just have to wonder, if the decision had been posted on hraunfoss (named for an Icelandic waterfall), would it have been friendlier to Cascade?

In your old kit bag

If you're looking for useful information, skip this post. If you're in a snarky mood this Friday afternoon, keep reading.

I was just reading the latest weekly USAC News Brief, and I got to the part that said, " What should I bring with me to the training?" and I thought, "I'll tell you what to bring." My list would include:

• Rotten tomatoes.
• The Star Trek Universal Translator. How else will you know that "Costs of the products and services are significantly higher than the costs generally available in the applicant’s marketplace for the same or similar products or services" really means, "More cable drops than we think you need."
• One of those Mission Impossible rubber masks. When you ask a question, and you're told, "No, that isn't allowed," you'll fall into the trap of saying, "But we've always done it that way." Think about what you just told USAC. You want to be wearing a mask when you say that. And someone else's name tag.
• A suitcase and a briefcase. Since the answer to most questions is, "That would be decided on a case by case basis," it just seems prudent to have the cases handy.
• A comb. That way after you tear your hair out, you can do a Donald Trump swoop to cover the problem.
• I would say caffeine, since some of the sessions tend to drag, but USAC is actually pretty good about keeping the stimulants flowing. [Which is really nice of them, considering that every year I see at least one over-stimulated audience member fly off the handle.]
• Binoculars. The Renaissance Capital View Hotel is at the airport, across the river and 3 miles from the capital, so you'll need binoculars to view the capital.
• Index cards. They only give you two, and really, are there only two things about this program that you find incomprehensible?

Caution! Irony may be hot.

I wonder if the FCC was able to deliver this appeal decision with a straight face. Seems the applicant file the 471 on time, but mailed in the certification 8 days late, then filed an appeal to USAC, but that was 22 days late, so they filed an appeal with the FCC. 11 months later, the FCC denied that appeal, and the applicant filed a Request for Review. 7 years later, the FCC decides on the request.

The delay was a good thing, since Bishop Perry arrived in the meantime.

But you know, there is a rule that says the FCC has to decide appeals within 90 days. (Those of us who have been watching appeal decisions long enough remember that the FCC used to grant itself extensions all the time, but it seems that in 2005 they stopped bothering with orders like this one.) So in this case they missed the deadline by about 2,500 days.

47 C.F.R. 54.724

(a) The Wireline Competition Bureau shall, within ninety (90) days, take action in response to a request for review of an Administrator decision that is properly before it. The Wireline Competition Bureau may extend the time period for taking action on a request for review of an Administrator decision for a period of up to ninety days. The Commission may also at any time, extend the time period for taking action of a request for review of an Administrator decision pending before the Wireline Competition Bureau.

Oh wait, that's only USAC decisions, and this case was a review of an FCC decision. So that's OK, then. Unless someone with better search capabilities or more spare time than me can find the rule for the FCC considering review of its own decisions....

Train this

USAC has announced the Fall training schedule. As much as I would like to support Newark, I'll be going to DC, as it is the place to see and be seen, and I'm sure we'll have an E-mpa® meeting attached to it.

Today's snark will be a few suggestions for sessions:

The Gift Rule: Yes, that lunch did just cost your district $500,000

The New SPIN Change Rule: Hey, telecom costs were dropping too fast, so we thought we'd make you freeze them for 18 months

CEROA: So many Cost-Effectiveness Reviews are Overturned on Appeal, we made up an acronym for it

Scattered like dry leaves

Could it be back pain from carrying around hundreds of pages of secret rules? Burnout from the processing blitz? Frustration that a rash of applications seem to be bouncing back to Initial Review? The uncertainty of processing applications using procedures that have not yet been approved by the FCC? For whatever reason, it feels like there has been more turnover in PIA reviewers than I've seen for many years.

OK, so even as an E-Rate consultant, the number of PIA reviewers I deal with is probably not a statistically valid sample. And it may be that I am driving them to leave, so it's a localized phenomenon. And it's not like it's a mass exodus; I think I've seen 3 reviewers leave since January. It's just that it seems like more than past years, and given that it only takes a few days to move an app out of Initial Review, it seems like a lot.

The pace of processing does seem faster this year, so I think burnout is the likely cause. Or maybe it's nothing.

And really, it doesn't make any difference. I don't care if the processing of my clients' apps is delayed, since nothing's going to actually get approved until the FCC approves the secret set of procedures for handling applications. For last year, the approval came on May 13th. For 2009, it came on April 2nd. For 2008, it was April 10th.

So I'm just hoping I don't see any more turnover once the FCC makes up its mind on the processing standards.

Jargon creep

Long-time readers know I'm a bit of a language curmudgeon, but I enjoyed a new use of jargon I heard today.

I was just talking to a service provider with multiple SPINs, and rather than saying, "It looks like they used SPIN 1430xxxxx," she said, "It looks like they SPUN 1430xxxxx." [I'm using xxxxx to protect the innocent, of course.] I like it.

I've seen acronyms conjugated before: for example, "COMADed" is pretty common. But in this case, the acronym is spelled the same as an irregular verb, so the past tense is irregular. Splendid!