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Friday, December 28, 2012

Just listen to yourself

I don't have much time to investigate the other programs in the Universal Service Fund, but E-Rate Central took a look at a recent Rural Health Care order that might have some implications for the E-Rate.  [The order is just called "Report and Order"; could this be that program's First Report & Order?  Let's all snicker at the USF noobs.]

The whole thing bears reading, but two points seemed to me worth writing about:

First, the discount is being set at 65%, lowered from 85% in the pilot.  Two of the reasons mentioned:
  1. " ensure that HCPs have a financial stake in the services and infrastructure they are purchasing, thereby providing a strong incentive for cost-effective decision-making and promoting the efficient use of universal service funding."
  2. "A 65 percent discount rate will help keep demand for the overall health care universal service...below the...cap."  
Some of us have been citing those two reasons in our arguments to lower the top discount rate in the E-Rate program.  So it's nice to see the FCC endorse the ideas, even if it's not in our program.

Second, the order sets some common-sense procurement rules.  I really liked two of them:
  1. You don't need to competitively bid purchases with an annual cost less than $10,000.  I'm guessing that would exempt maybe 60-75% of all FRNs. (The median funding request is $3,000, which means a pre-discount amount of less than $10,000 for all but the 20% applicants).
  2. You can use any contract "awarded pursuant to applicable federal, state, Tribal, or local competitive bidding processes" without having to do any competitive bidding.  Buy off state contract, you don't need any bidding.
Those two exemptions would probably eliminate the need to post a Form 470 for 80% of applicants.  Which would save money for everyone.  Apart from administrative costs, applicants would have the flexibility to get the best deal, unshackled from the FCC's ever-growing and ineffective competitive bidding rules.

Maybe I'll just cut and paste a few key parts from this decision and submit them ex parte on the subjects of discount levels and competitive bidding.

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