Unhand that handset

E-Rate Central's weekly update has a great history of the free-handset-with-your-VoIP controversy.  The bottom line: there are still 100 applications twisting in the wind because a service provider liberally interpreted the FCC's statements concerning free cell phones, and the FCC hasn't decided whether that interpretation is allowable.  (Actually, I think the FCC just hasn't decided on the right justification to deny the handsets, but I do tend toward the cynical.)

I don't have anything new to say on the matter, I just wanted to give a shout-out to the E-Rate Central update.  I will repeat my earlier suggestion: in order to be allowed, free services should pass the Ancillary Use conditions:

1. Ineligible features are an insubstantial and inseparable component part of an eligible product or service.
2.  A price for the ineligible component cannot be determined.
3. The product or service is the most cost-effective means of obtaining the eligible functionality without regard to the value of the ineligible functionality.

And as I pointed out earlier, free cell phones do not meet those criteria.  The price for the ineligible component is easily identifiable, the cost is far from insubstantial, and the component is easily separable.  Solve the problem by making applicants identify the cost of "free"handsets (cell phone or VoIP) and remove it from their funding requests.

Or better yet, apply the "eligible location" requirement to cell phone service (as we do for data service to those same devices).  That would make cell phone service ineligible for E-Rate funding.