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Wednesday, April 24, 2013

Alas, poor P2!

Pursuing my own priorities, I forgot to speculate on what most people want to know from the Demand Estimate: what will the Priority Two denial threshold be?

First, the executive summary: the funding cap is up 1.8%, P1 demand is up 11%, P2 demand is up 31%.  So it's ugly.  How ugly?

OK, well let's assume that 10% of applications are denied.  If that's true, then USAC will only need $58 million to cover P1.  No problem.  But to cover P2 requests for 90% applicants, they'll need $1.6 billion.  That's going to require some stretching.  And they're already stretched thin after last year's rollover.

Very ugly,  Could this be the first year of no P2 funding?  I just hope the FCC doesn't resort to pro-rating funding for 90% applicants.  Pro-rating would be incredibly ugly.

And the real ugliness is getting close.  If P1 demand keeps going up by 10% per year, 2 years from now USAC will need a $475 billion rollover just to cover P1.  The year after, $720 billion.

The money is running out fast.

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