Tilting at cell phones

It's not as bad as having to wait a year between episodes of Downton Abbey (two previews are available for those as hooked as I am; both feature Maggie Smith, so they don't disappoint), but Funds for Learning is keeping us all on tenterhooks by releasing the results of their recent poll of applicants in several parts.

The latest release has got me thinking.  The first graph shows which services applicants think are most important and least important.  The winner for least important: cell phones.  I recently commented on the mess that cell phone companies are creating by giving away phones, and FFL's graph has me thinking that the simple solution is to toss cell phones out of the program altogether.  I mean, really, the free phones problem pales in comparison to the problem of usage from ineligible locations.  As long as the location of service remains a criterion for eligibility (and it pretty much has to, unless we switch the E-Rate budget with, say, the Pentagon budget), cell phones are a poor fit in the program.

So as of today, I declare the newest windmill at which I will tilt:

Cell phone service should be ineligible for E-Rate funding.

I just hope I don't suffer retaliation in the form of a dead cell phone.....

An unrelated wry note from the same page:
On both graphs, 14% of applicants rate Internal Connections as the most important part of the program.  Gee, I wonder if that's the same 14% that actually gets Internal Connections....  I'm surprised only 8% rated it "Least Important." Since over 80% of applicants will never see any IC funding, you'd think it would be least important to them.  I guess hope springs eternal.

Pumping irony

And we have a new record: 3,912 days to decide on a request for a deadline waiver.  Faithful readers will know I revel in the irony of the FCC taking years to deny appeals because they were filed a few days late.  This case is a little different, because the FCC actually granted the waiver.  The appeal decision gives a nice synopsis of the case, so it's worth a read, but here's the timeline:

• February 4, 1998: ICN (Iowa Communications Network) petitions FCC to be a common carrier
• February 18, 1999: FCC releases ICN Declatory Order, denying ICN petition
• February 19, 1999: USAC starts denying all Telecommunications Service FRNs involving ICN
• February 26, 1999: applicants start appealing denials
• ?1999: Iowa sues in District Court to get the ICN Declaratory Order overturned
• June 27, 2000: District court remands ICN Declatory Order
• December 2000: FCC reverses ICN Declaratory Order
• November 28, 2001: USAC denies most of the appeals because they were filed more than 30 days after denial
• December 6, 2001: Iowa appeals denials to FCC, requests appeal deadline waiver
• August 21, 2012:  FCC grants appeal

Well, at least it was granted.

Guess who's coming to dinner

A couple of weeks ago, I proposed a harebrained scheme called the Dinner Table Rule.  I was just thinking that the Dinner Table Rule could replace pro-rating if it were narrowly applied.  If there isn't enough funding to cover Priority Two for 90% applicants, then USAC funds the neediest (whoever has the highest total percentage of students eligible for NSLP in Block 4) until the money runs out.  Then all the applicants who were funded can't have seconds until all the other 90% applicants are served.

Yes, it's a crappy system, but it's better than pro-rating.  In fact, it's better than the 2-in-5 Rule.

Plus, can't you just see a little school pleading, "Please, sir, I want some more" and then all the 90% applicants break into a musical number.

Buy your own damned phone

Another area of confusion created by the Clarification Order, which was an attempt to ameliorate the brain seizures we were suffering from trying to figure out what the Sixth Report & Order meant. The FCC tried to right thing by explaining that they weren't going to punish applicants who get a free cell phone from their provider as part of a 2-year contract, just like everyone else on the planet does. Of course, no good deed goes unpunished. A certain VoIP provider (and if you filed a Form 470 last year, you know who I mean) came up with an analogous plan where if you signed up, they would give you a free desk phone.  SECA could see where this was headed and asked for clarification.  The FCC sees the need, and has asked for comments.

Here's my comment to the FCC: get out of the procurement regulation business.

Yep, I'm in full curmudgeon mode today.

SECA has proposed 4 rules, which the FCC parrotted in their Request for Comment:

1. The cost of any end-user equipment provided as a part of a bundled service must be considered “ancillary” relative to the cost of the bundle as a whole; 
2. The bundled service offering must be deemed a commercially common practice within the industry, not a unique offering of an individual service provider; 
3. The arrangement must be currently available to the public and not just to a designated class of subscribers;and, 
4. The service provider is not permitted to offer a package or packages of equivalent eligible services, without bundled end-user equipment, at a lower price.

My opinion of those rules:

1. Here's where it should begin and end: the ineligible free stuff must meet the requirements for "Ancillary Use" as outlined in the Eligible Services List, and be done.
2. OK, but doesn't that stifle innovation?  You can't take advantage of a deal until everyone is offering it?  And what do you mean by "industry"?  The dozen or so companies that form the "school Web hosting industry" all offer a plethora of services which are not available in the wider Web hosting industry.  So if we apply the standards of the wider industry, suddenly all the value-added hosting proposals have to go through the Free Services wringer.  Uh oh, look for a another storm of spamments from the Web hosts' clients.  (I just invented "spamment" to describe the torrent of comments that came in when Web hosts sent their clients a form letter and told them to resend it to the FCC.)
3. This rule kills the free cell phones.  Because those free phones are only available to people signing a new multi-year contract.  Subscribers in the middle of a contract and those who don't want a contract (or can't get one because of their terrible credit history) cannot get a free phone.  So free cell phones are only available to a designated class of subscribers.
4. This is a good idea, but telecommunications companies have so many packages, even they can't keep track of them.  Determining which packages are "equivalent" is a rabbithole I don't want to go down.

Taking a step further back, public entities should not be getting free cell phones, anyway.  Take a look at the state contract in your state, and I'll bet it has month-to-month phone service with phone purchases.  Because the standard cell phone agreement is wrong for a public school or library for a few reasons:

1. Multi-year commitment.  Government contracting officers should not be signing agreements which obligate the government to make payments if no funding has been approved.  A two-year contract is bad government contracting practice.  
2. The public entity owns that phone.  Did you forget to put that $650 iPhone in your inventory, just because you didn't pay anything for it?  And have you been complying with state and FCC rules about disposal of that piece of equipment?  (Hmm, do FCC inventory requirements extend to ineligible equipment that you got for free with a service that E-Rate funded?)
3. The superintendent you're buying service for is pretty likely to leave mid-contract, anyway.  You did remember to get that phone from the last superintendent who left, right?

So the answer to this quandary is: don't allow free phones.  Not cell phones, not desk phones.  Force public entities to do what they should be doing anyway: buying the phone and paying month-to-month.  And force the private schools to do it, too, because I want to see what happens when the FCC tries to force government procurement nonsense on a bunch of nuns.  Those women don't even take crap from the Pope.

Taking a step further back, the FCC could just start enforcing rules about off-campus use of cell phones (there is no exception in the ESL for use of cell phones from ineligible locations), and suddenly no one will be able to apply for E-Rate funding for cell phones.

Striking while the irony is hot

Some of you may be tired of my "isn't it funny how the FCC takes years to deny appeals filed which were a few days late" rant, but this appeal decision is a beaut.  It seems that on March 15, an unfortunate school named Graydon Manor had some of the equipment on their 471 found ineligible.  OK, first of all, if your school is Graydon Manor, rather than appealing to the FCC, wouldn't you just go down into the sub-basement and get Batman to fix the problem?  But no, they appeal to USAC.  The appeal letter is dated April 8, but I guess someone forgot to drop it in the mail, because it was mailed May 13.  That's 59 days after the FCDL was issued.  USAC got it on May 15, which is of course 61 days after the FCDL.  So on June 3, USAC dismisses the appeal as late filed.  The Manor files an appeal with the FCC on June 25, which the FCC receives on July 2.  [By the way, if you search the FCC's ECFS system for Graydon in Docket 96-45, when you click on the link for the Request for Review, you go to some filing by Ventura Telephone.  But the government couldn't hide it from this intrepid blogger.]  On September 13, the FCC tells the Manor to suck ice, since the rules say appeals must be received within 60 days, regardless of what USAC employees may have told the Manor about being postmarked within 60 days, and the Manor didn't offer good cause to waive the rules.  So on October 10, the Manor sends a Request for Reconsideration, which the FCC receives on October 15, which is 32 days after the FCC's decision.  And as I learned not too long ago, Requests for Reconsideration have to be filed within 30 days.  (The deadline for other appeals was increased from 30 days to 60 days on an emergency interim basis due to the 2001 anthrax attacks, but apparently Requests for Reconsideration are immune to anthrax.)

Let's recap the salient points from that pointlessly dense paragraph:

• appeal to USAC received 1 day late, May 15
• Request for Review timely filed, July 2
• Request for Reconsideration received 2 days late, October 15

And yesterday, the FCC issued its decision on the October 15 appeal.  But wait, the above timeline is from 2002.  So the postal service delivers an appeal 2 days late, and 3,505 days later, the FCC says, "Sorry, you were late."

Wow.

Extry! Extry!

USAC has released a Special Edition News Brief that the FCC has set the denial thresholds for 2011 and 2012.
For 2011, applicants at 88% and higher will get funded.
For 2012, applicants at 90% and higher will get funded.
That was fast: the USAC board just approved on Monday requesting those levels from the FCC.

OK, first it's laughable that the FY 2011 denial threshold got set one month after the end of the funding year. The whole idea of funding year has become largely meaningless for Internal Connections projects.  I can't remember the last time a client spent Internal Connections funding inside the funding year for which it was approved.  And applicants at 88% will be getting maintenance funding approved too late to actually spend it.

But the denial threshold for 2012 is almost timely.  It should be set before the start of the funding year, but at least it's close.  At least we all know the threshold for this year before we go into the next application cycle.

Once upon a time, I had a dream of the FCC announcing the denial threshold before the start of the filing window.  Now the FCC could actually do it.  Because I can tell you right now: no one below 90% is going to get a red cent for P2 in 2013-2014.  The FCC can't guarantee that 90% applicants will get funded, but we can all be damned sure that no one below 90% will get anything.

So here's what I'd like to see.  The FCC releases this week The Pro-Rating Order and Notice of Proposed Rulemaking.

The "pro-rating" part would say: "If your discount is below 90%, kiss P2 funding good-bye.  If, as expected, the cap plus rollover funds available as of June 15, 2013 are not sufficient to cover the demand for Priority One services plus demand for Priority Two services from 90% applicants, we will allocate funding based on a pro-rated basis."  That would be so painful that all the proposals in the NPRM would look good in comparison.

The NPRM part would say: "We will never again have enough funding to cover P2 funding for even 90% applicants, so we need to do something.  Here's what we're thinking:

1. Cut the top discount level to 75%
2. Toss some services out of the program.
1. Maintenance is just a headache and a great place to run small scams.  No one understands the rules.  Approvals always come too late.  Wash it all down the drain.
2. Web hosting costs are out of hand.  If the going market rate for unlimited disk space and unlimited bandwidth is less than $100/year, how do the value-added Web hosts keep a straight face when they say 95% of their $10,000/year cost is for Web hosting?  So we'll discount the first $100/year, that's it.  Wait, what are we saying?  $100?  Forget it; hold a bake sale to cover your Web hosting costs.
3. Now that blade servers and virtual machines are all the rage, the eligibility of servers is a moving target and beyond the ability of the human mind to calculate.  Pay for your own damned servers.
4. You can only have funding for cell phones and mobile Internet if you certify that you'll collect all those devices from employees when they leave the building.  Sorry, allowing your Superintendent to check her Facebook page on her ride home is not the purpose of this program.
5. POTS lines are so last century.  This program is supposed to be about "advanced technology." Get yourself some VoIP.  Can't get anything but POTS in your area?  Go complain to the High Cost Fund.
6. Toss Data Protection and be done with it.  We were never sure about firewalls and proxy servers, and anti-virus and anti-spam were never eligible, so why are we paying for uninterruptable power supplies?  And ask an engineer about the advantage of tape backups over a hard disk backup: it's archiving, not backup.  VPNs?  Get real; people are using them for network access from ineligible locations.  Toss the whole category.
7. Get rid of paging services.  No one but custodians has used a pager in 10 years.  OK, so it won't reduce funding demand by much, but it will save some space on the ESL.
8. Look, the only thing eligible under "video" is video distribution, right?  Well, everyone transporting video over their data network, so let's kick video out of the program.
3. Make an adjustment to the cap to compensate for all those years the fund wasn't indexed to inflation.
4. Let's replace the "2-in-5 Rule" with the "Dinner Table Rule": don't take seconds until everyone has had firsts.  So if you get P2 funding this year, go to the back of the line and wait until everyone else has had some.  No, it doesn't solve the funding problem, but it disperses the crumbs more widely.

OK, the Dinner Table Rule is a bad idea.  But all the rest of the ideas are better than pro-rating.

Another thing to blame on the recession

Why hadn't I thought of this before?  A colleague mentioned that the recession is increasing the number of students eligible for free and reduced lunch, and it hit me: a bad economy increases the demand for E-Rate funding.  I would imagine that most schools didn't see a change in their E-Rate discount (if the percentage of eligible students climbed from 12% to 18%, for example, the discount stays at 40%).  But I'd imagine that a significant number of schools saw an increase in their discount.

I wonder what percentage of the increase in funding demand can be attributed to the recession.  I'll have to get my database guy on it next week.