499 ⇒ !CIPA

So as I cried over the misery of applicants trying to get services into the right category on the Form 471, a weird thing occurred to me: in many cases, the need for an applicant to be CIPA compliant is dependent on the regulatory status of the service provider.

See, when CIPA came along, the FCC decided that compliance was not required for telecommunications funding, which is a good thing.  So they did what seemed logical and easy: you apply only for services in Telecommunications Services (TS), you don't have to be CIPA-compliant; apply for Internet Access (IA) or Priority Two, and you need to comply.  And that pretty much worked.  (Yeah, it was a little weird that you didn't need to be CIPA compliant for a T-1 line leased from a telecom company to connect to your ISP, since its only purpose was to provide access to the Internet, but to get funding for a PBX, which could not connect to the Internet, you had to be CIPA-compliant.  But everyone just looked at the sky and whistled and said nothing.)  But then along comes VoIP and the FCC can't make up its mind if it's a "telecommunications service," so you can put it in either TS or IA.  And then fiber is also allowed to straddle.

Let's look at an example of how that might work out in practice.  An applicant wants VoIP service.  In response, they get a bid from their ILEC and their ISP.  Their ILEC files a Form 499, so they can put the VoIP service in TS on the 471.  But their ISP doesn't file a Form 499, so they have to put it in IA.  USAC will decide the need for CIPA compliance based on which box is checked on the 471.  (The new order which tosses out the distinction between TS and IA, says that box is "one of the checks that USAC uses to determine which applicants need to comply with Children’s Internet Protection Act (CIPA) requirements," but I'm not aware of any other checks.  Oh crap, are we going to get a new type of review from PIA?)

So the exact same service may or may not require CIPA compliance, depending on whether the service provider files a Form 499.

That doesn't seem right.

Telecom apples and Internet oranges

Wow!  Usually the release of the Eligible Services List (ESL) is a yawner: the FCC doesn't make any significant changes, and we already know what's coming, because there is an NPRM showing proposed changes.

But this year, the order accompanying the ESL is a bombshell that goes well beyond eligibility.  They have blown up the old "two priorities, four categories" classification of services.  (Anybody else get a mental image of John Noran doing the Vulcan salute when I said "two priorities, four categories"?)

Now, there is only Priority One.  No Telecommunications Services, no Internet Access, to say nothing of the weird troika of categories that was proposed on the ESL, which I suppose would have given Mr. Noran the opportunity to get his thumb involved in trying to clarify priorities and categories, but was otherwise useless.

I made the case that Priority One should be a single category back when the draft ESL came out, but I was more timid than the FCC, suggesting that the Form 470 and 471 should be changed first.  The FCC was more bold, saying that as long as applicants check either of the Priority One boxes on the Form 470, they can get any Priority One services.  I can't wait: putting Web hosting under Telecommunications Services will give me a dirty thrill, and putting POTS lines under Internet Access will feel so edgy.  (I guess this year, Mr. Noran will do the "Vulcan who wasn't careful with the lirpa" salute.)

So up to paragraph 7 of the order, I'm just thrilled: real reform that makes the program easier for applicants!

And then I hit paragraph 8: "When requesting E-rate funding applicants must continue to select the correct category of service on the FCC Form 471."  Oh, crap.  Of course they have to keep the categories on the 471, because of CIPA.  But now applicants have to figure out whether a particular service has to be in the Internet Access category (which means they have to comply with CIPA).  And since the FCC sheared off that kludgy column with the Telecom and Internet textboxes, you just have to kind of know what goes where.

Oh wait, surely there is guidance in the ESL.  Here it is, right on Page 1, with all that other crap no one ever reads: "CIPA Reminder.  The funding of Internet access in the telecommunications services category does not relieve applicants of complying with the requirements of the Children’s Internet Protection Act (CIPA) if the service request includes Internet access."  What?  That's it?!  See for a normal person, E-mail service is not "Internet access."  Neither is "Web hosting."  And there is nothing in the descriptions of either of those services saying, "Whooop!  Whooop! If you're applying for this service, you must check the "Internet Access" box on the Form 471 and be CIPA compliant."  Or is the FCC saying that only actual "Internet access" requires CIPA compliance, and the other services that were under the old "Internet Access" no longer require CIPA compliance?  I don't think so, but that's actually what the ESL says.

Damn, this order was going so well.  I still can't decide if one bad paragraph spoils a whole bunch good.

Proofreader's note: The preamble of the Miscellaneous section still lists the old 4 categories.  That's OK, no one ever reads that part.

Price wars

Well, looky what's in the News Brief: lowest corresponding price (LCP).  As I blogged back in May, LCP is a requirement that service providers give E-Rate applicants their lowest rate.  E-Rate applicants are supposed to get the lowest price for a particular service offered to any other customer in the service area.

LCP has been sitting in a corner, largely ignored by the E-Rate program.  The FCC put the regs in place back when the program started, and then nothing happened.  Ever hear of USAC or the FCC demanding a service provider lower its price to the LCP?  Me neither.

Well, someone at the Justice Department read the regs recently,and  took legal action  in Indiana, Wisconsin, Michigan and New York.  The only settlement so far is with AT&T in Indiana, where the violations were discovered by a lawyer working for the state. Feds 0, states 1.

So a little while after the 2009 Indiana settlement, which cost AT&T $8.3 million, the FCC got a petition from the telecom lobbying groups to "clarify" (meaning "hamstring") the LCP rules.  The FCC quickly responded with a request for comment in May 2010.  And then LCP returned to its dark little corner.

Then on May 1, 2012, ProPublica publishes an article about the failure of USAC and the FCC to enforce the lowest corresponding price rule.  And whaddayaknow, in the service provider training a scant 10 days later, there are several slides about LCP; in previous trainings, there was no mention of LCP.  Of course, since no one at USAC had given any thought to LCP, the slides basically just quoted the regs.

Now a cynic might say that USAC was trying to fill a News Brief, and as it scraped the bottom of the barrel, it came across the LCP slides, reformatted them, and put them in the brief.  But I am even more cynical, which makes me optimistic.  More cynical in that I believe if USAC and the FCC intended to continue to ignore LCP, they would have spiked the News Brief story.  Because applicants who macheted their way through the dense underbrush of regulatory prose discovered an ancient paradise they never knew existed.

Now that the cat's out of the bag, I am hopeful that many service providers will be hit with requests for LCP. Unfortunately, applicants don't have any way to find out what the CPs are, so they can't really tell if theirs is L.

So will USAC start enforcing LCP?  How?  If it were part of PIA, that would reduce demand.  Just sayin'.