470 spreads the spam and phish

Here's a suggestion for USAC's planned IT update: hide the email address of the person signing the Form 470.

If you download data from the Form 470, it includes the email address for the Contact Person, but that's it.  However, if you actually look at the form, you can also see the email address of the person who signed the form.  And now apparently one of the companies that packages 470 data for potential service providers has added the signer's email address to their mailing lists.  So now we're seeing bids from service providers to both the contact and the approver.  We're also already seeing non-bid spam to both email addresses.

Which puts us on the slippery slope where we'll start getting spam not related to E-Rate, and eventually phishing attacks.

The new, improved Form 470 should have an online form for handling inquiries, which would be forwarded to the applicant's email without revealing that email address to the spammers and hackers.  Side benefit: USAC would be able to access communications from service providers to applicants.  Even better, set it up to assist applicants in bidder communications, so all clarifications get to all potential bidders.  Give applicants free tools that make it easy to do the right thing.

ALA kazam!

I stumbled across a summary of the E-Rate's funding woes by the American Library Association.  It's kind of an odd time to come out with the summary, since there has been no news on this front for 6 months, and we'll likely get a new demand estimate within 2 months, which will let us know the funding prospects for 2013-2014.  Still, if you haven't heard anything about the funding crunch, it's worth a read.  I just wish they hadn't called it a "fiscal cliff."  I guess they had to do something to pique people's interest, but I expect more reasoned discourse from librarians.

First, of course, I have to comment on the most important issue facing the program: the capitalization of the "R" in "E-Rate."  Alas, the report uses the small "r."  I am disappointed not to have the ALA in my camp, but I will struggle on.  Actually, the "R" is capitalized in the title, but not elsewhere, not even in the subtitle.

Check out the last paragraph: "The American Library Association believes the program should be fully funded. This includes all Priority 1 requests and all Priority 2 requests."  I wish that could happen, but I kind of think that if you're looking at increasing a government program beyond what the Obama administration is considering, your chances of getting it approved are nil.  Still, the ALA promises to "explore various options and alternatives to address this question."  I hope that means a public exploration.

I'm just happy the ALA is staying on top of the E-Rate.  After all, fewer than half of libraries get any E-Rate funding.

Better not to ask

As I review a bajillion bids, I got to pondering:

How can a 3-year tech plan cover a 5-year contract?

We need some kind of Inverse Kalamazoo Reconsideration Order, which would say that you can write a tech plan to support a pre-existing contract.  I mean, if you can't allow a service provider to help with your tech plan, how can it be OK to craft a tech plan to fit an existing contract?  Shouldn't applicants be certifying that the existence of contractual obligations did not influence the tech planning process?

Longer waits, more secrecy

Did you catch what the new FCC Commissioner Ajit Pai said to the Federal Communications Bar Association?  Yeah, me neither.  Fortunately, the FCC published his speech.

The focus of his remarks?  The FCC needs to respond more nimbly.  Hear! Hear!  And here are my ill-considered thoughts on his remarks:

1. In describing the need for reform, he mentions two appeals that had been pending for over 8 years that were resolved last summer after complaints from Congress.  I wondered if they were E-Rate appeals, and I found two that fit the bill.  
1. The denial of Graydon Manor's appeal.  In August 2012, the FCC denied a Request for Reconsideration filed in October 2002, because it was received 2 days late.
2. The approval of ICN's appeal.  In August 2012, the FCC approved an appeal that was filed in December 2001.
2. "First, the Commission should streamline our internal processes where possible."  Who wouldn't agree with that?  He does offer some specifics, but they don't seem to apply to the E-Rate, unless the full Commission has been sitting on WCB recommendations concerning E-Rate appeals.
3. "Second, we need to start taking statutory deadlines more seriously."  Anyone who's been reading this for a while has heard this rant from me since 2011.  In fact, if you clicked on either link under Item 1 above, you got a couple of episodes of that rant.  According to statute, all appeals of USAC decisions should be decided in 90 days. 
4. "And 90-day extensions should require a vote of the full Commission."  They used to, but the custom seems to have been abandoned in 2005.  To really keep this going would require an embarrassingly large list of appeals to be held over every 90 days.
5. "Third, in addition to statutory deadlines, we need to establish internal deadlines where we don’t yet have them.... Let’s institute a nine-month deadline for acting on petitions for reconsideration and applications for review. And let’s set a six-month deadline for ruling on waiver requests."  Deadlines are good, but did he just suggest relaxing the deadline for requests for review of USAC decisions from 90 days to nine months?  
6. "For instance, the 90-day timeframe for reviewing actions of the Universal Service Administrative Company is rarely met because it doesn't give the Wireline Competition Bureau enough time to review the record. But if the deadlines we set for ourselves are unrealistic, we need to adjust them, not get rid of them or ignore them."  Dang, he is talking about tripling the amount of time allowed for deciding appeals.  And just when they were starting to hit the 90-day mark fairly often.
7. "That’s like opposing motherhood, apple pie, or the Kansas City Chiefs."  And we know the Chiefs don't need any opposition, because they beat themselves every game.
8. "Due to the Sunshine Act, those deliberations can’t take the form of a simple conversation or meeting involving more than two Commissioners. Instead, our staffers meet to negotiate or they exchange proposals over e-mail. Or the Commissioners hold a string of one-on-one meetings or phone conversations that come to resemble the childhood game of Telephone."  No, you can't blame that on the Sunshine Act.  Blame it on the Commissioners who want to hold deliberations in secret, and are willing to go to ridiculous extremes to avoid holding a conversation in public.  Rather than hamstringing the Sunshine Act, let's strengthen it: don't allow commissioners to speak even one-on-one except in public meetings.  Somehow we need to force public officials to conduct the public business in public.
9. "Recently, I've wondered what would happen if my four colleagues and I could all get together in a room and try to hammer out a deal."  In order to continue a time-honored tradition of American politics, let's make the meeting room a smoke-filled back room.

Wait, so the two proposals that seem to affect E-Rate will be:

1. The deadline for deciding appeals will be tripled.
2. Commission deliberations will take place in secret.  Just what this program needs: more secrecy.

Well that's a major disappointment.

I got music, I got E-RITM

More than 3 years after Mel promised they would modernize their online tools, USAC has asked for comments about "the E-rate program IT modernization (SLITM)."  Gotta love an acronym that isn't even based on a title.  It should be E-RITM.  Or maybe hyphens don't make it into acronyms, but Program should be in the title, so it's ERPITM.

What, you thought that just because I whine incessantly about USAC's IT infrastructure, I would focus my comments on the substance of the RFC?

Most of my complaints are at a more granular level than the RFC.  They have statements like, "Offer redundant navigation for ambiguous situations to allow external users to reach the correct outcome," while I think in terms like, "Let me use my browser's Back button without wacky results."

Annual whine tasting

It's three weeks before the end of the window, so it's time for the annual "Whining about the Running of the Notification of Form 470 Posted but No Associated Form 471 Letters."  I don't have anything new to add to what I said last year, but I figure if USAC is going to keep sending out useless emails, I'll keep making useless blog posts.

Just another blog post!

Hey, I stumbled across another E-Rate blog!  And after a cursory glance, I found three things to love:

1. It has a great tagline: "Just another E-Rate Blog!"  I like the modesty, and the exclamation point seems wryly ironic.  (I know, "wryly ironic" is a little redundant, but how could I pass up an opportunity to type "wryly"?  If I have a 5th kid, I think I'll name him/her "Wryly."  But I think my wife might vote for "Really?" with the question mark and all.)
2. The author consistently capitalizes the "R" in "E-Rate."  A kindred spirit at last!
3. A recent post included the statement: "When I asked what Washington State schools were willing to give up- they stated loud and clear – Cellular Phone Service...."  More support for my quixotic quest to have cell phones tossed out of the program.

The results from Washington State align with Funds for Learning's nationwide survey results: if applicants were allowed to vote on what service should be dumped from the ESL, cell phones would win.

Wouldn't it be cool if the FCC actually did put it up for a vote?  Let every applicant choose one service as most important, and one as least important, and drop the least important.  It would complete the "eligibility is a popularity contest" trend started when the FCC decided not to drop web hosting from the ESL because the web hosts got their clients to bury the FCC with spamments (comments that were written by the hosting companies, and forwarded to the FCC by the applicants).

While we're at it, how about a survey to see if we can get the "R" in "E-Rate" capitalized.  It would give me the opportunity to spam everyone who's ever been the contact on a Form 470 with instructions on how to post a comment in support of "The Big R."  Even better, only let E-Rate bloggers vote, because if you Google "e-rate blog" (Google doesn't care about caps), the top 3 blogs listed all use the capital "R"!

You say "service," I say "purchase"; let's call the whole thing off

What do E-Rate geeks think about in the shower?  Cost allocation and ancillary use, of course.  By the end of this morning's shower, I was thinking about my rather rakish suggestion that cell phone service should be run out of the E-Rate program.

My main argument is that unique among all services, the use of cell phones from ineligible locations is allowed.  And I would argue that a very significant portion of the use of administrators' cell phones takes place off campus.

But I also oppose giving out free phones.  It's bad public contracting, and is a clear violation of program rules.  In their efforts to build a loophole to allow the free cell phones, the FCC has opened up a can of worms.  (Why did they use a can opener to build a loophole?  Sorry, my metaphors got out of my control.)

Drying off this morning, I was thinking about the most egregious case of free phones.  Check this out.

Some (maybe all) cell phone providers have an enterprise pool plan, similar to a family plan, where you pay a monthly amount for a bucket of minutes (like $50/month for 700 minutes), and you can add phones to that plan for $10/month.  All the phones you add share that bucket of 700 minutes.  This is a great plan for custodians, for example, where you don't need to have conversations, you just need to be able to efficiently dispatch custodians with mops on November 1st every year.  (The day after Halloween is peak mop demand in schools.)  And of course, if you sign a 2-year contract, you get a free phone.

So think about what you're really buying.  Over the course of the 2-year contract, you will pay $240.  And you will get a free phone worth $200-$250.  You're not getting an increase in service, since the new phone is sharing the existing pool of minutes, so use of the cell phone service does not increase.  The $10/month add-on is not for more cell phone service.  It is a handset purchase financed over 2 years.

I can't remember a more obvious case of an equipment purchase disguised as a service.  Providing a $100 VoIP phone on a two-year contract where the total cost is $480 seems reasonable by comparison.


[Even in my quixotic quest to get cell phones kicked out of the program, I just can't put the above propaganda out there without qualifying it.  Each new phone under a family plan does actually increase the number of minutes used, just not the number of paid minutes.  What actually makes this phone plan great for custodians is that if you choose a cell phone provider that allows free minutes to other subscribers of that provider, then everyone on the plan can call each other without using any minutes from the pool.  So you use the provider's infrastructure without ever using any minutes from the pool.  When you consider that and the financing cost of the phone, it's hard to see how a cell phone company makes money on this plan.]

GAO shovels so I don't have to

The recent secret reform letter from the FCC mentions a GAO report, which has also triggered an audit at USAC, so I thought maybe I'd give it a look while taking a break from shoveling snow.  (It's 60 pages long, so I guess the rest of the snow will be there until Spring.)  I guess I should have read it when it came out in 2010, but I find I have to be in just the right mood to slog through a GAO report.

OK, first problem.  The title: FCC Should Assess the Design of the E-rate Program's Internal Control Structure.  The problem?  "E-rate."  It's the first time I can remember seeing the "r" not capitalized in a title.  Which is the consistent way to go, if you are operating under the mistaken belief that the "r" should not be always capitalized.  Alas, I think I am becoming numb to the small "r," which leaves no one to defend the proud capital "R."

The executive summary looks promising: "GAO found no controls in place to periodically check the accuracy of USAC’s automated invoice review process, again making it unclear whether resources are appropriately aligned with risks."  Can I get an amen?  Like the PIA practice of cost-allocating a portion of the maintenance on a router which has SRST capability (the ability to act as a lame PBX if the real PBX goes down).  It lowers the Funding "Commitment" by a few dollars, but who cares?  It's not like it's a real commitment.  And how about if a phone bill says "other charges, see p. 54: $2.00" and you have to dig up page 54 so the review can see if the charge is eligible.  For $24 a year?  Not worth the time it takes the reviewer to type up the email.

Oops,the first error is in paragraph 3: "the same rule violations have been repeated each year for which beneficiary audits have been completed. For example,of 64 beneficiaries that had been audited more than once over a 3-year period, GAO found that 36 had repeat audit findings of the same rule violation."  The GAO doesn't understand the timing.  If I had made a mistake (that has to be in the subjunctive, because I never actually make mistakes) in, say, an application for Funding Year 2004, that error would have been made in January 2004.  If I'm doing a BEAR, that payment won't be made until October 2005, so it is unlikely to be audited until January 2006.  The GAO pointed out in footnote 1 to Appendix VI that the audit process took an average of 334 days.  So half the applicants wouldn't get the results of the audit until after December 2006.  That might not give me time to make adjustments before filing for FY 2007.  If I were audited in January 2009 (three years after the original audit), that would be for FY 2007 at the latest.  So it's not surprising that it would take 3 years to implement change based on audit findings.  In addition, audits can be launched up to 5 years later, so it is conceivable that the second audit that an applicant got was actually for an earlier funding year, so they would not have been able to correct the error.  USAC tried to point this out in their response, but the GAO still didn't get it.

First snicker: Footnote 13 says, "USAC is a wholly owned, independent subsidiary of the [National Exchange Carrier Association (NECA)]."  Which is it, independent or a wholly owned subsidiary?  Why is no one else troubled that the program is administered by a company owned by the phone companies' lobbying group?

Interesting factoid: in 2006, PIA's secret procedures manual was 700 pages.  The GAO said it was still 700 pages in 2009.  Given the accretion of rules over that time, it's surprising the procedures didn't also grow.

Hmmm, on page 13, the GAO says that only "high-risk applications" are subjected to Selective Reviews.  I had always heard that some Selective Reviews were a response to perceived risk, but some were randomly assigned.

Page 18: "The overall design of the E-rate program is complex, and FCC’s changes to the program over time through orders and guidance have made it more so."  You got that right.  Every time the FCC tries to simplify the program, they just make it more confusing.  But since the complexity (and secrecy) of this program pays my kids' tuition, I won't complain too loudly.

From footnote 50: "USAC has goals for its senior managers to maintain E-rate improper payment rates attributable to errors by USAC and its contractors at less than 1 percent per year."  That creates a couple of unfortunate incentives:

1. Since only invoices are reviewed by the audits, if USAC denies a funding request, that denial is never audited, so USAC has a monetary incentive to deny as many funding requests as they can.  
2. In the event an audit identifies an improper payment, USAC (who finalizes all audits) has a financial incentive to find that errors were attributable to applicants, not USAC.

Appendix IV has the kind of factoid that only an E-Rate geek could love: the number of FTEs assigned to application review and invoice review.  In 2009, 150 people worked on application review.  There are something like 23,000 applications filed each year, so that's 150 applications per reviewer.  The work year is about 2,000 hours, so that's about 13 hours per application.  That seems like a lot for the median application, but I suppose the big applications really drag the average up.

So streamlined, it's invisible

Sometimes, even good news leaves a bad taste in your mouth.

First, the good news.  The FCC has approved some cost savings measures for PIA.  The FCC likes it because it will save $2 million.  I like it because it is likely to mean that reviewers will spend less time reviewing routine applications.  My feelings about PIA are similar to the Tea Party's feelings about government: the less, the better.

The bad taste?  Well, all the reforms are listed in Appendix A, so right away I scrolled down and...no Appendix A.  So I read through the letter, and found: "These measures are...confidential because their public release would compromise the application review process."  So we have secret reforms to the secret rules.  All the secrecy sets my teeth on edge.

Free the handsets!

I don't often listen to the Service Provider Conference Call, but I could tell this week's was going to be exciting, so I made a point of getting on the call.  It did not disappoint.

The reason for the excitement?  USAC recently decided that one VoIP provider could provide free phones with their service.  Other VoIP providers were hot because:

1. The standards for providing free equipment with Priority One service are too vague to tell whether an offering meets them.  The FCC published a request for comments in August, but has not taken action on it so far. 
2. USAC didn't tell anyone that they were making decisions on eligibility of free handsets.  VoIP providers who had been saying that free handset eligibility was undecided were caught flat-footed.
3. USAC didn't explain the basis for the decisions, so other providers couldn't tell what they needed to do in order to offer free phones.
4. This is all happening in the middle of the filing window.  Service providers who thought it prudent to wait for an FCC decision are now at a competitive disadvantage.

So the beginning of the call went normally, and then the VoIP phone issue came up, and things got a little heated.  Speaking for USAC was the Senior Director whose title should be Bearer of Bad News, because it seems like every time USAC has to convey an unpleasant message to the E-Rate community, she gets the nod.

The message was pretty clear:

1. No, USAC does not have any more information on the standards for the allowability of free phones.
2. In the case of this single service provider, USAC was satisfied that they definitely met the requirements of the Clarification Order, which is all that USAC has to go on.  USAC is making such decisions on a case by case basis.
3. USAC reached their decision because of information on the service provider's website.

But it didn't seem like the VoIP providers on the call heard that third item, because they were just too steamed.  They kept trying to change USAC's mind, which is a mistake.

How dare USAC make decisions without clear guidance, providers wanted to know.  I wanted to say, USAC has to do this all the time.  The FCC often makes the mistake of thinking vague rules are simple rules, so USAC is always guessing at the FCC's intent.

My advice: don't get mad, get funded.

VoIP providers should have noticed that they got the recipe for being allowed to offer free phones: if your website offers free phones to a large swath of customers, you'll get approved.  In the case of the approved provider, they offer free phones to public sector and enterprise customers who sign a two-year contract.

And if the FCC eventually makes a decision, and it turns out VoIP phones are not eligible, the Commission is likely to make the new rules apply in the future, not retroactively.  And if the rules are applied retroactively, you have an excellent case for a waiver of any COMAD.

And in all the excitement, I'll bet a lot of people missed another important tidbit: USAC made it clear that the Clarification Order applies only to free equipment.  Bundling free services will still fall under the rules of the Free Services Advisory.  So the new offer by one VoIP provider of free emergency blast messaging is likely to run into trouble.  But if history is any guide, it will be a couple of years before we know for sure.

My solution to this whole mess?  Make free equipment pass the Ancillary Use tests.  That would force applicants to purchase cell phones, as they should.  Actually, they shouldn't be getting funding for cell phones, anyway, since they are often used at ineligible locations.