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Saturday, May 11, 2013

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.

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