Redirecting thoughts

In a discussion of FFL's proposal to implement a per-student cap on funding, a colleague said, "Eliminating services from the ESL ... does not help applicants fulfill their need to connect students."  And that got me thinking deep thoughts about eligibility.

In deciding whether something should be eligible, I've always followed the "necessary to transport voice, video or data to classrooms or public areas of a library."  But the quote above has me thinking maybe the rule of thumb should be "necessary to connect students or library patrons to the Internet or PSTN (Publicly Switched Telephone Network)."  At first glance, they look like pretty much the same thing, but there are some important distinctions.  My recent posts about tossing voice service and cell phone service out of the program have pointed out that students never get to use phones, so they shouldn't be funded.  I guess my thinking has been moving this direction for a couple of months.

Evaluating eligibility of services based on their usefulness in connecting a student or library patron would result in some changes in priorities.  Since voice usage almost never involves a student or patron directly, those services should be gone, or at least low priority.  Bandwidth, Internal Connections and Maintenance, on the other hand, are necessary to connect students and patrons.  (Internal Connections and Maintenance are only partially used to access the Internet or PSTN, so they should be partially eligible, or at a lower priority than bandwidth.)  Does your email server only have mailboxes for staff?  Sorry, not eligible.  Your students mostly use the network to print their Word documents or save their PowerPoint presentations to the server?  Sorry, your network is mostly ineligible.

I like it.  Let's redirect the funding at students and patrons, and away from staff.  The net result probably wouldn't be a big change, but it sure would be nice to have administrators at every level given an incentive to focus on students and patrons.

A wave on the horizon

A Special Edition News Brief has announced that USAC ran a funding wave last Friday, but that the letters won't be coming out until the 29th.  That's 12 days to print 12,023 FCDLs.  It seems really slow.  What, are they using typewriters over at USAC?

Now I have to know how many typewriters they'd need.  A good typist can produce 60 wpm, a typical page has 250 words, so that's about 4 minutes/page.  An FCDL is 2 pages of useless boilerplate, followed by one FRN/page, but each of those is only half a page, so let's use one page per 2 FRNs, and since the first wave will largely be small, simple applications (averaging just over $10,000 total), let's say 2 pages of FRNs.  So that's 4 pages, which should take a typist about 16 minutes.  Let's make it 15 minutes so I don't have to get out a calculator.  That means 4 FCDLs per hour, or 30 per day (let's give our typist a half hour for lunch).  Let's put 3 shifts of typists on each typewriter; that gets us 90 FCDLs/typewriter/day.  In 12 days, each typewriter could produce 108 FCDLs.  I'll round that down to 100 FCDLs to avoid using a calculator, which means USAC would 120 typewriters staffed by 360 typists.

Anyway, no complaints from me.  It's great that the first wave will come out in May.  Even better, all these applications sailed through without any questions from PIA to applicants, apparently thanks to the new streamlined application processing rules.  It's impressive that a quarter of 471s have been processed.  True, only about 5% of the requested funding is in the first wave, but in a way that's good; it follows my suggestion that application review of FRNs under $3,000 (half the FRNs in the program) should be a spell-check.

Let's hope PIA is streamlined for the larger applications, too.

Grab your surfboard!

The first wave can't be far off now.  The FCC has approved a rollover of $450 million into FY 2013.  Now there is more than enough to cover Priority One funding.  So all we need is for the FCC to say, "Go!" and the first wave will hit.

There still isn't enough to cover Priority Two for 90% applicants, but we knew that would be a problem.

This is the first time since 2008 that the FCC has actually complied with Section 54.507(a)(3) of the Commission’s rules, which says that the rollover will happen in the second quarter.  Of course, now they're looking at either a rule-bending second rollover, or have insufficient funds to cover Priority Two for 90% applicants.

But still, this is good news.  Warm up your 486 generators; I smell FCDLs on  the way.

A Modest Proposal

OK, Sancho, saddle up Rocinante.  I'm taking on the biggest windmill yet.  I'm going after the holy trinity of "voice, video and data."

I've already said that since only the transport of video is eligible for funding, and video is all transported over data networks, video should vanish from the Eligible Services List.  To continue my holy trinity analogy, there are 3 hypostases (voice, video and data), but only one transport: TCP/IP.  All that videoconferencing gear was only kind of partially eligible, anyway, and video service providers were just trying to shoehorn in ineligible services with unrealistic cost allocation percentages and erroneous interpretations of the eligibility rules.  Let's simplify the program and toss video.  It's small potatoes, but it would simplify the program.

And now the bombshell: voice services should be thrown out of the program.  I'll acknowledge that this is problematic, since voice services provide much of the revenue for this program, but I have good reasons to toss it.

My first argument is the same as the one I used for tossing video: the transport of voice is increasingly done over the data network.  It's especially stark in the VoIP world, where there is no central switch through which all calls flow.  Once a call is set up by the call processor, the two phones toss out data packets which ride the Internet like other data packets (OK, maybe they get QOS special handling).  The VoIP "PBX" (or the hosted VoIP service provider) does not transport the call.  It sets up the call between the two phones, but the call is transported over the Internet.  If you call a POTS line, then the call has to be transported onto the PSTN, but that is generally going to be done by the recipient's carrier, so your hosted VoIP provider is still not transporting the call.

Secondly, Congress said that the E-Rate should be based on this principle: "Elementary and secondary schools and classrooms, health care providers, and libraries should have access to advanced telecommunications services...."  A phone call is not "advanced telecommunications"; voice services are sooo last millenium.  Let's take the scarce resources of the program and focus them on the future, not the past.

Finally, I question the "educational purpose" of voice services.  In every discussion of educational policy, someone trots out this chestnut: it should be all about the children.  All my kids put together have logged about 45 years of school.  That's over 8,000 student-days.  In those 8,000 days, how many times have my kids used a telephone?  I'd estimate 20 times.  Students are not allowed to use phones except in very special circumstances.  If you were able to divide the total of all the phone bills of this nation's schools by the total number of minutes that those phones were used by students, you would get a cost-per-minute that would never pass a Cost-Effectiveness Review.  What about communication between parent and school, you ask?  These days, most of the voice communication from my kids' schools are robocall announcements, and those robocall services are not eligible for E-Rate funding.  Phone calls are not essential to education.

As the E-Rate runs out of money, we should be focusing on technologies that are forward-looking and used directly by students.  Voice services are neither.

There, I said it: No more phone service in the E-Rate program.

Block 4 Eruv

Pondering ways to simplify rules got me thinking: Why do I have to wait three years to transfer equipment between entities if they are both in the Block 4 of the 471 for that equipment?  And why do I have to inform USAC?

The rule was originally created to stop abuse by districts from using high-discount schools as "equipment mills" for the district; they'd buy the equipment with E-Rate funding at the higher discount, then the following year replace it with new equipment, and move the almost-new equipment to a school with a lower discount.  I don't think many schools really did that, because it's a major logistical nightmare, but OK, it's a practice that should be stopped.  (Incidentally, the 2-in-5 Rule stops equipment mills, but we should dump the 2-in-5 Rule.)

If I have a Form 471 that lists several schools, shouldn't I be able to install equipment in any of those schools, and move it around among those schools as I see fit?  So if a school district lists all of its schools (and a couple of NIFs eligible for P2), shouldn't the district be able to move equipment around among those locations?  The locations in Block 4 all contribute to the discount calculation, so if the equipment is bouncing around among entities in Block 4, who cares?  The transfer rules should only apply if the equipment is being moved to an entity not listed in Block 4.

I have been been through audits where the auditor demanded to know where each piece of equipment was originally installed, and then checked to make sure the equipment was still there.  Two switches had been moved, and the auditor recommended that USAC recover the cost of those switches.  That's just wrong.  Applicants should have to show where each piece of equipment is, and it should be in one of the locations listed in Block 4 of the 471, but it doesn't need to be in the building where it was originally installed.

Sun Myung Moon and the E-Rate

Thinking over the "bundled components" NPRM has me thinking about an E-Rate Unified Field Theory, which would unite the rules for:

1. bundled components
2. gifts
3. free services
4. on-premise priority one equipment (O-PPOE)
5. ancillary use
6. cost allocation
7. educational purposes

Some rules I didn't put on that list, and why:

1. 2-in-5: the 2-in-5 Rule should just be dumped
2. 30%: the 30% Rule has already been gutted
3. competitive bidding and bid evaluation: competitive bidding rules should be left to the states
4. cost-effectiveness: this term should be struck from the E-Rate lexicon; the "Cost-Effectiveness Reviews" are really Educational Appropriateness Reviews (or "'Whoa! That's out of hand!' Reviews"); the FCC's cost-effective guidelines (from the Ysleta Order) would be unnecessary if service providers were forced to obey the Lowest Corresponding Price rule

I'd like to add the Eligible Services List, but I don't see a way to include that in a single rule.

The first thing that comes to mind is Funds for Learning's proposal to create a per-student cap on funding.  It creates a simple rule that reduces the need for all the above rules, since the cap promotes the fairness that is the ultimate goal of the above rules.  But to make all the above rules unnecessary, we'd have to take the FFL plan to the extreme, turning the E-Rate program into something more like EETT: "Here's a chunk of money, based on the number of students and percentage of low-income students; spend as you see fit on transmitting voice, video and data to classrooms."  No one is proposing that, especially not consultants, who would become E-Rate dunsails.

I'm a big fan of Ancillary Use.  I've suggested using it to replace the stupid O-PPOE rules.  I've suggested using it to winnow out bundled services and free services.  And the ancillary use rule is just part of the cost allocation rule, so we've got 1, 3, 4, 5 and 6 covered by the current cost allocation/ancillary use rule:
"If a product or service contains ineligible components, it is fully ineligible, unless:

1. The cost of the ineligible components can be identified and removed from the funding request, or
2. The following are true of the product or service:
1. the product or service is a standard product offering, and 
2. a price for the ineligible component cannot be determined, and
3. the product or service the most cost-effective means of obtaining the eligible functionality without regard to the value of the ineligible functionality.”

That leaves Gift rules and Educational Purpose rules.  I can't see a way to work those in right now.  I'll have to sit on that a bit.

Quick, hide that cell phone!

I think the "bundled components" NPRM could be the first NPRM in a while to actually move me to comment. So I was perusing the order, and I was looking at the Appendix, which has all that dense regulatory verbiage that no one reads.  I flipped to the "Description and Estimate of the Number of Small Entities to Which the Proposed Rules May Apply" section, to see if the FCC was listing E-Rate consultants there yet (alas, no), when I stumbled across this dichotomy:
Paragraph 2: "[W]e propose to clarify that beginning with ... fund year 2014, any ineligible components must be cost allocated...."
Paragraph 24: "E-[R]ate recipients had been required to cost allocate ineligible components bundled with eligible services prior to the Gift Rule Clarification Order.... Thus this order merely removes a short-term exemption...."

The first quote is fine, making it clear that there won't be any changes before 2014, but that second quote is chilling.  It seems to be saying that before the Gift Rule Clarification Order came along, applicants were required to cost-allocate the value of cell phone handsets out of any cell phone service funding requests.  If anyone at USAC reads to paragraph 24 of the Appendix and takes it as a mandate for action, we could see a COMAD jihad, recovering funding from every cell phone FRN for FY 2008 (the earliest year inside the 5-year lookback limit) to FY 2010 (since the Gift Rule Clarification Order kicked in for FY 2011).

That witch hunt would mean tens of thousands of COMADs.  But I'll bet it wouldn't collect enough to cover the P2 funding shortfall.

Hopefully no one from USAC will notice that paragraph.  Or read this post.

More stinky phish

Email addresses from the FY 2012-2013 Form 470 are being targeted with a slick phishing attack.  It is a very realistic counterfeit notification from Dunn & Bradstreet that a complaint has been filed against you.  The complaint is in a ZIP archive.  Don't open the ZIP file.

I wouldn't trust anything from D&B, anyway, so I wasn't at risk, but it's yet another example of E-Rate applicants being put at risk because contact information on the Form 470 is published.

The FCC should not publish contact info from the Form 470; not email addresses, and not phone numbers.

More Form 470 cold calls

Now a WiFi equipment manufacturer (Xirrus, I think, though stupid made-up names starting with X make it difficult to figure out over the phone; it could have been "Zeroes" calling) won't leave us alone.  We're getting repeated calls.  Here's how the latest one went:
ColdCaller:  Someone in your company recently reached out to us...
Me:  Can you tell me who reached out, when, and how?
CC:  Our records show it was you.  It was probably through the E-Rate.
Me:  All E-Rate bids are closed.
CC:  Oh ... OK.

The caller's first sentence means this call crosses the line from annoying cold call to slimy phishing attack.  No one from this company reached out to your company.  Your company got my contact info off a federal form to which all responses were due before March 14th.  Do people really buy from companies whose first sentence is a lie?

Since they have my name, not the school Webmaster, they probably didn't buy their list from the same place as the Web hosting company that plagued us earlier.  Instead, they're getting both name and phone number off the Form 470.

We already use disposable email addresses on all Forms 470 so we can disregard the spam.  Now it looks like we'll have to get a disposable phone number every year.

Or the FCC could stop publishing contact info on the Form 470. Or at least stop requiring it.

No students, no funding?

I just read about a MI school district shutting down in the middle of the year.  Really shut down: no classes, all teachers laid off.  Of course, my first thought is, "What happens to those students?"  But I'm such an E-Rate geek, that thought is quickly followed by, "What happens to their E-Rate funding?"  Some interesting questions.

They just got approved for 2012-2013 in April, and the 486 hasn't been filed yet (or has been filed but not yet approved).  But assuming that the district gets it together and submits a 486 and BEARs, will USAC send a check to a district that is no longer operating a school?

The 2013-2014 application was filed, but of course is not yet approved.  Can USAC approve an application for a district that no longer operates classrooms?

I'm not sure if USAC is forbidden from sending BEAR reimbursement checks to bankrupt service providers, but I know they avoid doing so.  But that's a matter of being concerned about whether the reimbursement will flow through the service provider or be caught in the bankruptcy sewage treatment plant.  Here the question is whether the applicant is still an eligible entity.

Here in NJ, I know of at least one district whose only school was closed due to hurricane damage, and their students are going to a neighboring district.  But that is a solvent district dealing with a temporary school closure.  It seems to me a different matter to talk about a district that has stopped educating its students.

It's only $10,000 in funding, so it won't save even a single teacher's job, but I wonder if it's something USAC has dealt with before.  If not, do they see it as a new headache, or a relief from the incessant whining of applicants and service providers caught bending the rules in the same old ways?

Surf's up!

Yesterday the FCC approved the PIA procedures.  At one of the recent service provider trainings, Mel Blackwell estimated that USAC has 12.500 applications ready for approval.  That's about 28% of applications, though if our clients' experience is any indicator, it is a lot of small applications.

Normally, the timing of the first wave would now only be a question of how soon USAC could build up enough steam in their creaking IT infrastructure to print 12,500 FCDLs.  But this year, P1 demand exceeds the funding cap by about $77 million.  Since USAC does not have enough money to pay all the P1 requests, can they start approving funding?  I can see 3 options:

1. USAC can project that they'll deny 12.2% of applications, which would bring P1 funding under the cap.  Recently E-Rate Central calculated that commitments have been 80-90% of requests, with an average of 84% for recent years, so 87.8% approval seems reasonable, but not certain.  But in calculating last year's denial threshold, the FCC seemed to use 11%, and that included P2, which is typically committed at lower levels, so they seem to be more conservative than E-Rate Central's calculations.
2. The FCC could do a mini-rollover of $77 million now, while they decide what to do about P2 demand for this year.  They aren't supposed to do more than one rollover, but they flout the rollover rule every year anyway.  USAC has a pile of something like $450 million that they've swept up from the mess of previous years, so I guess the FCC could just roll all that into FY 2013-2014.  And if they did it now, the requirement that the FCC make the rollover in the second quarter would be satisfied for a change.
3. USAC could release pro-rated P1 commitments, where every applicant's funding request would be reduced by 12%.  Just kidding.

So anyone care to bet on the first wave?  I'm going for May 21st.

FCC moving away

The FCC has moved a public meeting from June 6^th to June 27^th   Perhaps they heard that the nation's leading E-Rate consultants will be in town for the E-mpa® Spring Conference and wanted to clear their calendars.  Or maybe they were afraid we'd show up at the meeting with "P2 for All!" banners, chanting, "What do we want?  Priority Two! When do we want it?  Now!"

I'll have to visit an FCC meeting one of these days.  But I'll probably leave my banners at home.

Better sign up now

Just a quick update on the training registrations:

City	Date	Spaces	Free	Taken	% Taken
Washington, DC	9/30/2013	290	0	290	100%
Newark, NJ	10/8/2013	265	112	153	58%
Minneapolis, MN	10/15/2013	230	143	87	38%
St. Louis, MO	10/22/2013	240	98	142	59%
Atlanta, GA	10/24/2013	240	106	134	56%
Houston, TX	10/29/2013	240	16	224	93%
Los Angeles, CA	11/5/2013	265	0	265	100%
Portland, OR	11/7/2013	240	121	119	50%
Total		2010	596	1414	70%

Texans better jump on that registration.  All the slots might be gone by this morning.  Minnesotans?  Take your time digging out; free slots will still be there when you're done.

Fall travel plans

Registration is open for the Fall USAC trainings.  Grab your spot now!

The invitations went out to every email address associated with a 2013-2014 application starting at 1:15 p.m.  An hour later, over 200 out of 290 slots have been taken for the DC training.  Almost half the 265 slots for LA are gone.

If Minneapolis strikes your fancy, you can take your time registering.

Meanwhile, it appears as if the email invites have only reached the letter "i"; I hope no one whose email address starts with "z" was hoping to go to the DC training....

The locations are the same as last year (well, Houston bumped Dallas, but it's still TX).  I'd have thought maybe Chicago or Denver or Kansas City deserved consideration.  I guess Newark splits the difference by NY and Philly, but maybe Boston?

I keep thinking Yellowstone would be a good place to have a training.  Somehow the smell of sulphur seems an appropriate atmosphere.