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Wednesday, April 25, 2012

Now it's for real

Up until now, PIA has been working on FY 2012 applications with procedures not approved by the FCC.  But yesterday, the FCC approved the PIA procedures.  In past years, it's been a couple of weeks between the approval of procedures.  This year, the approval doesn't mention any changes, so I think we could be looking at a first wave of approvals in early May.

Wouldn't you know it, PIA seems to have gotten a slower start this year than in the past.  (Clearing up FY 2010 Priority Two applications from the FCC's bizarre post-funding year rollover/tossback?)  So I don't think there is much of a stack of applications ready for the first wave.

Still, it's good to see this approval done in April, after longer waits the past 2 years.

Today's brush with a foss

Turns out I'm not the only one with a soft spot for Hraunfoss (for those who are new to the blog, that's the name of a server which hosts FCC appeals decisions).  Check out National Geographic's Photo of the Day for April 20 (sent to me by a fellow E-Rate geek).  It's the lovely scene of Hraunfoss flowing into the aptly named Hvita ("white") River.  Such a bright scene is the perfect setting for all the FCC's cheery appeal decisions since Bishop Perry.

Turns out Svartifoss is also on the NatGeo site.  Svartifoss looks very forbidding, so maybe they should move all the pre-Bishop Perry decisions to that server,

No sign of Fjallfoss on NatGeo.

89% applicants carried across the threshold

Funds for Learning has reported that the USAC board approved the items on their agenda concerning the denial threshold for FY2011: no Priority Two funding at 80%, while 89% gets funded.  Now those decisions have to be approved by the FCC.  So here we are, with 2 months left in the funding year, and no applicants below 90% have received P2 funding approval. And since the next board meeting isn't until July, applicants at the 81-88% discount level won't know about funding approval until after the funding year is over.

Does this look broken to anyone else?  I'll say it again: set the denial threshold before the opening of the window.  That should be easy, since it looks like the threshold will never again fall below 90%.

2-in-5 is 0-8

The 2-in-5 Rule fails again, as it has every year since its inception.  The demand estimate for FY2012 has been released.  Of course total demand is up (21.5%), but the heinous 2-in-5 rule is only supposed to reduce demand for Internal Connections (IC).  Total IC demand is up 33% from last year.  OK, but a lot of that is probably from the FCC's weird backwards roll-over of funds into a funding year that was already done in order to fund all P2 requests.  Let's see...yup, that decision has increased IC demand from 40% applicants by over 1,000%  So we really should be looking just at IC demand for 90% applicants.  The 2-in-5 Rule should be reigning that in.  So how did the demand for Internal Connection from applicants at the 90% discount level change from last year?  Demand is up 40% since last year.  Abject failure.

And the bottom line is this: P1 demand plus P2 demand from 90% applicants totals over $3.8 billion.  Now let's say 15% of those requests get denied; the USAC only has to come up with $3.25 billion.  The fund cap might grow to what, maybe $2.3 billion?  And unless the FCC improperly delays the rollover until after June (47 C.F.R. 54.507 says the FCC should rollover funds "in the second quarter of each calendar year"), like they did last year, I'm betting on a lower-than-normal rollover this year.  Let's say $500 million.  That only gets us to $2.8 billion in funding. Uh oh.  We're about a half billion short.  Could it be that 90% applicants will not get P2 funding this year?

Time to start looking for change under the sofa cushions.  And here's today's wild digression: here's an analysis I like that reaches the conclusion that the likely value of a pound of change found in the sofa cushions is $12.77.  So to make up our $450 million shortfall, we'd need about 35 million pounds of coins.  How many sofas do they have over at the USAC?

A more sobering way to put it: if we asked every person in the country to kick in $1, we'd only be about 2/3 of the way to covering the shortfall.

Not to worry, the FCC will probably just keep dumping rollover money into FY2012 until there is enough money to cover the 90% FRNs.  With all the weird games they've been playing with rollovers, the amount of unused funding is bound to increase, as applicants cancel duplicative FRNs necessitated by the complete uncertainty of the P2 denial threshold overlaid by the evil 2-in-5 Rule.  But it will take time for that money to come in, especially since they chucked the rollover from Q3 2011 back into FY2010, so I won't be surprised if no FY2012 P2 FRNs are approved until after the funding year has ended.  Which will, of course, put us in the same situation for FY2013.

We're moving the wrong direction.  I have always said that the denial threshold should be set before the window opens, but now it looks like P2 requests will never again be funded until after the funding year is over.

But back to my original rant.  The 2-in-5 Rule is not working.  Can we get rid of it now, please?  In a year or two it will be meaningless, since we'll only be able to cover P2 for 90% applicants once every 3 years, anyway.  But let's toss it now, anyway.

Tuesday, April 24, 2012

Monday morning blahs

Well, that was anti-climactic.  I logged on the USAC website yesterday after the 3-day shutdown, eager to see what new features would be available, or at least hoping that the spiffy new design would be extended to the entire site.  I can't see that they made any changes.  Oh well, at least it came back up on schedule, and nothing seems to be broken.

Sunday, April 22, 2012

USAC Gets Trumped

The article I mentioned in the Federal Communications Law Journal is available online now, so I'll be sharing my thoughts on it once I get back to the office.  But reading through it, I noticed an interesting usage: the authors consistently called the program administrator "the USAC."  I hadn't noticed that we all use "USAC" as an anarthrous noun.  Technically, I suppose "the USAC" is correct, but to me, it sounds like "the Donald."

Saturday, April 14, 2012

A site for sore eyes

Hey, the new look for the USAC website is up.  I like the new look, and the links in the upper left-hand corner seem more useful than the old ones.  I'm so used to the old site, though, that I'm not a good judge of usability for the new one.

For now, it's a bit of a Potemkin village, though: once you click to any of the tools, you're looking at the old style.  I guess that's what next weekend's downtime is for.

Friday, April 13, 2012

Iceland on my mind

Oh, and another important point from the recent FCLJ article on the E-Rate: footnote 15 cites the URL of the National Broadband Plan, which is on my favorite FCC server, hraunfoss.  Let's hope that an immutable reference in such an august journal discourages the FCC from any plans to decommission hraunfoss, as they did with poor svartifoss.

Long live hraunfoss!

The [r]ussians are coming

Hey, the E-Rate made it into the March issue of the Federal Communications Law Journal (the journal is available online, but the current issue isn't online yet).  The title: Is It Time to Recreate the E-Rate Program?

I'm only getting started on the article (at first, I was daunted by the 30-page length, but it's about 30% footnotes and has the capacious margins usually found in children's books or those college papers where I found I didn't have enough content to fill the requisite pages), so I don't have a full review yet, but right there on the third page (page 278 using the journal's page numbering scheme), and the authors take a stand on a major issue, and I'm incensed.  Here's what got my goat:
"Among the goals articulated in the National Broadband Plan is improvement of 'the connectivity to schools and libraries by upgrading the FCC's E-[r]ate program to increase flexibility [blah blah blah]."

Long-time readers will recognize the [r] as a poke in the eye for those of us who like our "E-Rate" with a big, bold R, not some sniveling little r.  (Probably instead of saying "those of us," I should be saying "those of me," since the rest of the world is probably rolling their eyes and thinking, "Is he really going to go off on this again? (OK, so "rest of the world" should probably be "the other reader of this blog."))

So of course, I ran back to the National Broadband Plan and checked: did they really use the R?  The answer: mostly not.  Of the 94 uses of the word, 7 are correctly capitalized.  And 4 of those are in titles of documents or names of organizations, which is usually capitalized, which of course proves my point that the R should always be capitalized.

And because the caffeine has not yet brought focus to my mind, I found myself following up on the inconsistent capitalization of "State E-Rate Coordinators Alliance" in the National Broadband Plan: what position does SECA take on this important issue?  The answer: a little of this, a little of that.  Now I have been writing paeans to SECA lately for their praiseworthy positions on many important issues, but they really need to make up their mind on this one.  Just looking at their home page, If find 5 E-Rates and 7 E-rates, and I can't see any pattern.  Wait, that's their old home page.  The score from the new home page: hmm, not really any text there.  How about the About Us page?  4 big Rs, 7 little ones, not counting the R in the company title.

The SECA site does have an out-of-the-box solution to this quandary: their logo uses all caps.  So if we said that E-Rate stood for "Educationally-Relevant Assistance in Technology Endowment," then we could call it the E-RATE, and the whole thing would be settled.

Wait a minute.  "Alliance"?!  I thought it was the State E-Rate Coordinators Association.  When did that change?  I've had just enough caffeine to stop me from researching the answer to that question.

How is it that I could write all that about a single [r], when in college I had to pad my margins?  The E-Rate is not that much more interesting than, say, Pushkin's Пи́ковая дама.

Hey, there's a new angle: not capitalizing the "R" conforms to Russian rules for capitalization.  So "E-rate" is a Russian plot to subvert our culture.

Saturday, April 07, 2012

Christmas in April

Is there anyone else out there excited about the announcement that the USAC website will be down for 3 days, April 20-23? I'm not at all excited that the site will be down for the weekend.  By the end of 3 days, I'll be going through withdrawal.  I'm excited for two reasons:

  1. The first is that my optimistic nature (faithful readers will need a moment to stop laughing at that self-characterization) thinks that if they're taking the site down for 3 whole days, when it comes back up, it will be hugely improved. I can't remember the site ever being down for so long. And they're even taking down the static pages.  What will we see?  Will the Data Retrieval Tool show each disbursement on each FRN?  Will the online 471 allow you to just snag all the info from the previous year, and then edit it, instead of starting from scratch each year?  Will they replace that picture of the girl with a pencil with a picture of a girl using some kind of service eligible for E-Rate funding?
  2. I'm also pleased that the downtime is being announced so far in advance. It was in the News Brief on March 30th and appeared on the website April 5th. I am hopeful that we've send the end of announcing on Friday that they'll be doing site maintenance starting that day and running through the weekend when the 486 and BEAR deadline is Monday.  
The combination of possible treats and advanced notice is like knowing Christmas is coming: I can't wait to see what the website will be like on April 23rd.  How will I be able to fall asleep on April 22nd?  But if this is just a replacement of creaky hardware with no change in functionality, it will be like opening that big shiny box under the tree to find it's just socks and underwear.

Monday, April 02, 2012

Goose sauce seems de minimis

OK, not the most interesting appeal decision: the FCC concludes that applicants were not using equipment that E-Rate paid for.  But E-Rate geek that I am, I had to take a gander at the appeals.  And one of the appeals jumped out at me, not because I thought the appellant had a good case, but because of the amount to be recovered: $388!

I ranted about this before: how is $388 not de minimis?  An applicant makes a mistake (which is later corrected), but they either pony up $388 or get the Red Light treatment.  How is that cost-effective?  Just the USAC review of the audit cost more than $388.  The appeal to USAC cost more than $388.  The appeal to the FCC cost more than $388.  And I'm only talking about the cost to USAC and the FCC, not the poor applicant.  The de minimis standard should be at least $1,000.

As I pointed out, USAC states the de minimis standard for USF contributors is $10,000. (You'd prefer the FCC regulation? Here it is.)  That $10,000 is not about forgiving errors.  If a company would have to contribute less than $10,000, they don't even have to fill out the form to show that they don't need to make a payment (except VoIP carriers for some reason).  Sauce for service providers: $10,000.  Sauce for applicants: $388.

And while I'm whining, how come I know the de minimis standard for contributors, but the standard for audit victims is kept secret?

And of course I'm going to take it a step further, beyond audit recovery.  If contributors can just blow off filing if they owe less than $10,000, how about setting a de minimis standard that says applicants don't have to go through the whole application process for requests less than $10,000?  They could just fill out an online form with three blanks: BEN, discount percentage and total pre-discount expenses.  (What about Block 4?  For those few applicants who have more than one location and are requesting less than $10,000, just let them use BEN-wide totals, OK?)  USAC sets a funding cap for that applicant.  Then when the invoices come in, USAC can review the discount percentage and check to make sure the services are eligible (which they do at invoicing anyway, sometimes overruling the PIA decision).

Listen to John Lennon sing it:
Imagine there's no 470s
And no 471s, too
Nothing to file SPIN changes for
And no Item 21 attachments, too. 
Imagine tiny applicants
Filling out tiny applications. 
You may say I'm a dreamer....

OK, so the syllables don't fit into the melody.  I think the difference is de minimis.