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Wednesday, January 05, 2011

90% is too close to free

I've said before on this blog that the top discount on Priority 2 should be lowered to 70%. Now I'm kind of rethinking that. Now I think maybe the discount should be lowered for Priority 1, too.

Why am I changing? Well, I've always said that the waste, fraud and abuse (WFA) caused by the 90% discount is really just in Priority 2. Now I'm not so sure. I recently saw a case where an applicant made a purchasing decision on telecommunications services that I think is wasteful, because they knew that they were going to get 90% off the cost. Now, this applicant didn't do anything wrong that I could see: they followed all the rules, and the solution they chose is not fraudulent or abusive. But I'm sure without E-Rate funding, they would have made a different decision. And I think they might have made a different decision if they'd been forced to pony up 30% of the cost, instead of just 10%.

I still think all the real WFA is in Priority 2, but for the first time I've seen how a 90% discount in Priority 1 is a problem, too.

To paraphrase a recent New York mayoral candidate: "The discount is too damned high!"

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