Today's NPRM chuckle

Are they channeling Yogi Berra over at the FCC now?  Check out this phrase from paragraph 33 of the NPRM:
"schools that use broadband connections less because the speeds available are too slow for use of educational software"
They've basically paraphrased the great Yogi:
"Nobody goes there anymore. It's too crowded."

If there is only one user, 1.5 Mbps is plenty to run any educational software.  The only reason not to use the software is if the Internet pipe is congested by other users.  (OK, maybe if you're running aDSL and it's oversubscribed or really far from the CO and the software needs a big upstream pipe....)

Unless the FCC is actually talking about latency, which is the amount of time it takes a packets to reach it's goal (and maybe bounce back).  I wouldn't bet on it, though.  While that section of the NPRM does mention latency, the FCC, like most people, consistently uses "speed" and "bandwidth" as synonyms for "throughput."  While "bandwidth" has lately come to mean "data rate" (and many people use it to mean "maximum data rate" in order to contrast it with throughput, which is the actual data rate), you would think that the FCC, which auctions off actual bandwidth (radio frequencies), would use a different term.

And don't get me started on using "broadband" to mean "high-speed," instead of it's real meaning.  I still can't stand to see "broadband Ethernet," because the BASE in your 1000BASE-TX connection means it's a baseband connection, not broadband.  Yeah, yeah, of course the packets hit a broadband circuit eventually, but by then they're not Ethernet packets.

OK, I'm a language curmudgeon, but in the case of technical language, shouldn't we be precise?

WTF happened to WFA?

I was looking at the 2003 recommendations of the Waste, Fraud and Abuse Task Force, and I got to wondering if any of the recommendations had been approved, so I thought I'd like the recommendations and their status.  And, of course, since I'm so opinionated, I'll give my view on whether each recommendation is a good idea.

Recommendation	Good idea?	Status
Lower top discount for Priority Two to 80%	Yes, but it doesn’t go far enough.	Dead? It isn’t mentioned in the Fact Sheet for the current NPRM. I don’t think it’s been part of any reform NPRM since 2004.
Impose a funding ceiling	Yes.	The current NPRM includes a proposal to allocate funding on a per-student basis. Not quite the same as a ceiling, but close.
Simplify forms for small funding requests	Yes.	Dead. The forms just get bigger and bigger.
Require applicants to list services on the Form 470 even if they have a separate RFP	Yes.	Dead.
Align tech plan requirements with other federal agencies	Tech plan requirements are a bad idea.	Pretty much done.
Provide clear policy, procedures, eligible services list, etc. before start of training cycle	Yes. Let’s have a rule book.	Partially done. The ESL has come out before training the past couple of years, but policy changes whenever, and application processing procedures are secret.
Develop guidelines on generally reasonable cost and functionality	Develop and publish guidelines.	Dead. Well, USAC has developed secret bright lines for reasonable cost and functionality, but the Task Force clearly wasn’t thinking of Cost-Effectiveness denials.
Disallow transfer of equipment during its service life.	Yes, with one exception.	Implemented, sort of.
Establish and publicize reasonable standards for warranties and other maintenance	Yes.	Established, but not publicized. The standards are part of the kafkaesque Cost-Effectiveness Review process.
Publicize the eligible services information that is provided to PIA reviewers	Yes.	Dead.
Create an “eligible services team” within PIA	Yes.	Who knows? PIA is a black box. We don’t know who works there or what they do.
Give specific guidance on service provider assistance with technology planning and procurement	Yes.	Nope. The guidance has gotten better, but just last month the FCC overruled its own decision on service provider involvement, so the rules are not clear.
Deny only FRNs with procurement or contract problems, not an entire 471.	Yes.	Implemented.
Standardize Item 21 attachments	Yes.	The online Item 21 Attachments kind of comes close, but it's so kludgy that a lot of applicants don't use it.
Increase resources to provide info and guidance: More workshops National webcast  Email alerts Make a FAQ Provide more info using the web	Yes to all.	This kind of communication has gotten better.  USAC even opened a division for it. Implemented Nope The weekly News Brief The News Brief kind of addresses this Implemented
Publicize best practices, bad practices and success stories	Yes.	The HATS program was pretty good for the positive aspects.  The problem is that no one can keep track of all the ways to screw up.
Consultant registration and disclosure	Yes.	Consultants are required to register, but are not required to disclose conflicts of interest or co-sign forms.
Strengthen review process for SPIN and ETP registrations	Yes.	Dead.
Allow applicants to see service provider invoices for Internal Connections	Yes.	Implemented, though I'll bet most applicants don't know they have this option.  Most IC invoices trigger a Service Certification, so applicants are forced to review invoices.
Prevent applicants from filing without authorization of central authority	I guess.	Dead.  I don't see this as much a problem any more.
Audit based on rules as they existed at the time of funding	Yes.	Not really the practice, because we often don't know if FCC decisions are rule changes, or rule clarifications.
Tiered audit results	Yes.	Audits are much milder now, but there were a couple of tiers.
Simplify service substitutions; create safe harbor, allow applicants to spend more	Yes.	Service substitutions have been very quick for the most part, and applicants are allowed to increase the cost of a project (but can't increase funding).
Streamline process for combined SPIN change/service substitution	Yes.	This is going to be a rarity thanks to the heinous change in SPIN change rules.  But it used to go pretty smoothly.
Reduce application review for small requests	Yes.	Dead.
Publicize criteria for invoice review	Yes.	No chance.  Another secret.
Reduce invoice review for small amounts	Yes.	Dead.
Notify applicants of systemic errors at USAC and expedite appeals	Yes.	I can't think of a recent systemic error, but USAC has been very good about quickly correcting their errors on appeal.  The FCC has been good, but not quick.
Give applicants and service providers more info on application status	Yes.	The Application Status tool is a big step forward.  It would be nice to get more info on what is snagging specific 471s.
Exempt Good Samaritans from COMADs	Yes.	Implemented.  Since Good Samaritan disbursements are always going to be BEARs, USAC is always going to COMAD the applicant.
Give automatic service delivery extensions for FCDLS after Jan. 1, not March 1	Yes.	Dead.

Boy, that WFA Task Force had some good ideas.  My rough count has 14 out of 32 recommendations implemented.  That's also better than I expected.

Three little dots

I didn't see anything striking in the comments that Commissioners Pai and Rosenworcel made on the occasion of the new NPRM.  And Commissioner Clyburn's comments didn't get into the specifics of the NPRM at all.  But one thing in Commissioner Pai's statement did prompt a sardonic laugh.

In his argument supporting the idea of funding internal connections instead of voice services, he says:

Congress itself demanded as much when it instructed that the E-Rate program be focused on providing “advanced . . . services” to schools and libraries.

That ellipsis made me laugh.  You may be thinking, "What clause could be in there that is so long-winded that it would force the Commissioner to use an ellipsis?"  But I knew the law well enough to know that the Commissioner used the ellipsis not for brevity, but to obscure a troublesome word.

What Congress actually said in 47 U.S.C. § 254(b)(6) was:

Elementary and secondary schools and classrooms, health care providers, and libraries should have access to advanced telecommunications services as described in subsection (h) of this section.

See, it's that troublesome word "telecommunications" that Commissioner Pai didn't want you to see.  Wireless access points are great tools for connecting you to the Internet, but the Internet is not a "telecommunications service."

Let's see what subsection (h) says:

All telecommunications carriers serving a geographic area shall, upon a bona fide request for any of its services that are within the definition of universal service under subsection (c)(3) of this section, provide such services to elementary schools, secondary schools, and libraries for educational purposes at rates less than the amounts charged for similar services to other parties. The discount shall be an amount that the Commission, with respect to interstate services, and the States, with respect to intrastate services, determine is appropriate and necessary to ensure affordable access to and use of such services by such entities. A telecommunications carrier providing service under this paragraph shall—

(i) have an amount equal to the amount of the discount treated as an offset to its obligation to contribute to the mechanisms to preserve and advance universal service, or

(ii) notwithstanding the provisions of subsection (e) of this section, receive reimbursement utilizing the support mechanisms to preserve and advance universal service.

 Since the purpose of the program is to provide access to telecommunications services, not information services, it seems to me to be a little tough to say that wireless access points should have a higher priority than voice services.  So in Commissioner Pai's place, I would use the ellipsis, too.

Three NPRMs in one

We still don't have the NPRM, but the FCC's fact sheet about it is better than me commenting based on my teleconference notes, so let's take a stroll through it.

The first thing I notice: there is nothing about increasing the size of the fund.  I think everybody was expecting to see something about how we need more money.  But I guess the FCC can jack up the contribution factor without public comment.

The document is broken down into three goals: broadband capacity, cost-effective purchasing and streamlined administration.  I don't see why the 3 should be rolled into one NPRM, but fine.  The program hasn't been roiled since the Sixth Report and Order, so it's high time the FCC confused applicants again.

I know you're dying to hear my opinion, so I'll go point by point.

Broadband capacity
This is the only one mandated by President Obama, and the only one that is an actual initiative.  There are five suggestions listed here:

1. Simplifying fiber deployments.  Cool.  Does this mean getting rid of the weird rules that say you can get funding for fiber on the pole, and fiber on school property, but the cost to pull fiber from the pole to school property is only eligible for lit fiber, not dark fiber?  Also, the administration seems to be thinking that ConnectED can be paid for with a temporary funding surge.  If so, they should allow applicants to pay installation costs without amortizing.  And in the interest of enhancing competition, allow applicants to consider building out dark fiber (currently, you can pay to build out lit fiber, but the dark fiber already has to be lying there).
2. Prioritizing fiber is OK, but are they saying that for remote areas, more cost-effective microwave circuits are to be deprecated?  I don't know of anywhere that broadband over power lines is offered, but should we really being prioritizing one transport medium?
3. Phasing out support for paging and directory assistance.  Wait, we're not talking about phasing out voice entirely?  Commissioner Pai specifically calls for eliminating voice, and Commissioner Rosenworcel calls for phasing down $600 million in "outdated services," which must mean voice.  If we're really just talking pagers and 411, don't bother; schools are already phasing out pagers, and directory assistance is so tiny that phasing it out is not worth the cost of figuring out the cost allocation.  I've already said that voice and video should get the heave-ho.
4. Ensuring Wi-Fi networks for all schools and libraries.  That's OK with me, but are we saying that schools that prefer gigabit to each device are wrong?  1 Gbps requires cabling.  (Yeah, yeah, 802.11ac will get you 1.3 Gbps, but unless the architecture is dramatically different that the rest of 802.11, we're talking well under a gig in actual throughput, and that's going to be shared among all the devices hitting that access points; put 20 chromebooks in a classroom, and they're each getting maybe 40 Mbps.  And all the chromebooks and iPads already out there don't have 802.11ac capability, and so access points are going to have to step down to pokey old 802.11n.)
5. Per-student funding.  What is this doing under broadband capability?  How is funding allocation tied to bandwidth?  Anyway, I've already given my opinion on per-student funding.

Cost-effective purchasing

The FCC had to rush out this NPRM on ConnectED, so why muddle it up with this dreck?  Again, five proposals:

1. Increase consortium purchasing.  Don't bother.  Consortia are a mess, and I don't see a way to clean them up under E-Rate rules.  I'm in favor of simplifying consortium rules, but I don't see a way to do it without scrapping the current competitive bidding rules (which would be a good idea).  One tip to encourage consortia, don't limit conortia's ability to negotiate telecom rates.  And every attempt by the FCC to improve the purchasing process just makes things worse.
2. More bulk buying and price transparency.  How are they going to encourage bulk buying?  I'm in favor of purchasing cooperatives, but coops are more about administrative convenience than cost-effectiveness.  And, of course, every attempt by the FCC to improve the purchasing process just makes things worse.  What is "price transparency"?  Is that where the service provider says, "Here is the price I'm offering you, and here is my Lowest Corresponding Price"?  That would be good.
3. Increased transparency on spending.  Yes!  Free the Item 21 Attachments!
4. Improve competitive bidding.  Uh oh.  Every attempt by the FCC to improve the purchasing process just makes things worse.  The FCC could improve competitive bidding by getting their noses out of local purchasing decisions.
5. "[A] pilot program to incentivize and test more cost-effective purchasing practices." Since the FCC doesn't seem to have realized that every attempt they make to improve the purchasing process just makes things worse, I am not sanguine about their ability to properly evaluate the outcomes of a pilot program.  If they want to pilot the FCC butting out of the purchasing process, I'd be for that, but otherwise, please stop having people who are not experts in purchasing technology in charge of making up rules for purchasing technology, or we'll end up with more crap like the 2-in-5 Rule, On-Premise Priority One Equipment, bundling rules, unbundled warranty rules, etc.

Streamlined administration

Again, nothing to do with ConnectED, but at least I kind of like these suggestions.  Did someone decide that each area had to have 5 suggestions?

1. Speeding application review.  Great.  How about starting application review?  This year has been abysmally slow on applications going into review, except for slam-dunk apps, which sailed through with no visible review (which is good).  The typical funding request involves $3,000 being transferred from the feds to a local government body.  How much review do we really need?
2. Streamline online application and require online application.  Don't require, just streamline.  If you build a good enough online app, no one will want to file on paper.  Oh, here's a suggestion: don't take the online BEAR offline just as BEAR season starts.
3. Increase transparency of USAC process.  Oh, I'm all for that.  Start with the 700 pages of secret rules.  Follow up with a video showing us what a PIA reviewer does all day.  Give us access to the screens that PIA is looking at for our applications.
4. Simplify the Eligible Services List; make disbursements more efficient.  Why are these in the same bullet point, much less the same sentence?  I'm all for a simpler ESL, but let's do it by simplifying eligibility rules, not obscuring eligibility rules.  All the rules concerning eligibility should be in the ESL, including rules on WANs and On-Premise Priority One Equipment and cost allocation and the whole mess.  If it's not in the ESL, it's not a rule.  Once it's a 200-page compendium, the impetus to simplify rules will be quite strong.  Removing a rule from the ESL is not simplifying; removing a rule from the program is simplifying.  By "more efficient ways to disburse E-rate funds," I hope they mean BEAR checks directly from USAC to applicants.  Everyone wants that, except USAC, who will be stuck sending out tens of thousands of checks instead of thousands of electronic payments.  Or maybe applicants could take electronic payments?
5. Streamline appeals process.  That should be "accelerate processing of appeals."  I don't know what goes on inside the FCC when an appeal is filed, but I've always had the perception that it gets assigned to someone, and that person tries to find time to deal with it among a sea of other responsibilities.  I think the FCC should adopt my "appeals decided in 90 days, or your appeal is granted" plan.  Complex problems demand bold and irresponsible action!

Other

Some other stuff that the FCC is thinking about, but didn't want to cram into one of the above categories.

1. Does CIPA apply to devices not owned by the applicant which connect to the applicant network?  What about applicant devices connected to other networks?  Worthy questions which should be answered.  The answers could be concise and clear.  Unfortunately, the right answers are not consistent with the way the CIPA law was written.
2. Adjusting to new NSLP rules.  The USDA created the Community Eligibility Option (CEO), which allows schools with at least 40% of kids "Identified" to agree to provide free breakfast and lunch to all students, and not distribute NSLP vouchers for 4 years.  The problem is that the criteria for  "Identified Student" included non-income-based criteria.  I say allow schools to use either Identified Students or students who meet income eligibility standards.
3. Additional measure to prevent WFA.  I'm all for preventing WFA.  Top on my list of preventative measures: lower the top discount rate to 65%.
4. Wireless community hotspots.  99% of libraries already provide this.  That's enough.  And if a school wants to have outdoor Wi-Fi, there is no rule against it.  Let's not create a new rule to make eligible something that's already eligible.  If the FCC is talking about putting hotspots somewhere not on school property, I say, "Hell, no!"  What would stop towns from having municipal Wi-Fi funded by the E-Rate?  I think municipal Wi-Fi is wonderful, but it is well outside what E-Rate should fund.

I'm eager to see the actual NPRM, but I'm not holding my breath.

Capital offense

Well, the NPRM we've all been waiting for has been approved (but maybe not finalized), so this morning, as a follow-up to my earlier analysis, I'll take a look at the single most important question: who is capitalizing the "R" in "E-Rate"?  We got five documents:

1. Press release: r
2. Summary: r
3. Chairwoman Clyburn: r by a score of 9-5  (Indicating a possible future as a politician, the Chairwoman comes down on both sides of this issue, even using both spellings in the same sentence.)
4. Commissioner Rosenworcel: R
5. Commissioner Pai: R, except, weirdly, in the title

So while the commissioners seem to be leaning towards R (the Chairwoman was solidly R last time I checked), and the White House is in the R camp, somewhere in the bowels of the FCC lurks a bureaucrat who insists on the whimpering r.  As I've mentioned before, the small "r" smacks of Russian grammar, so we need a whistleblower to come forth and expose the Russian mole in the FCC.

Hey, since we're talking about E-Rate 2.0, perhaps it's time to revisit my suggestion to rename the program something like "Educationally-Relevant Advancement  through Technology Enhancement," then we could call it E-RATE and be done with it.

April Fool's in July

I had to check my calendar to make sure this wasn't some kind of April Fool's joke: USAC has sent out an announcement that starting Monday (that's one business day from today), we will not be able to file BEARs and SPIs online for an indefinite period.

I'm pretty sure I'm reading this right: no more online invoicing until the new forms are ready.  When will the new forms be ready?  "As quickly as possible."

So the online BEAR is vanishing just as BEAR season gets into full swing.  (You aren't filing your BEARs before paying your June bills, are you?  Take a closer look at the certifications on the form.)

Unbelievable.

Oh, and by the way, if you were thinking that you would stay late today filing BEARs before the system goes down, USAC has also announced that the system will be down for maintenance this evening.  So we can still go to Happy Hour, and this week, we need it.

NPRM in the oven

Well, the FCC has approved the NPRM 3-0.  Now when will we see it?

I tried to take notes, but mostly I just jotted down things that struck me as interesting.

One thing I hadn't noticed before: the ConnectED initiative goal is to get high-bandwidth connections to 99% of students, not 99% of schools. That's bad news for small schools.  Why would the E-Rate pay $10,000/month to get broadband to some remote school with 20 kids when they can pay $1,000 to get broadband to a suburban school with 500 kids?

Some of the changes I heard:

1. Shifting funding priorities.  It seems like maybe we'll see Priority One become bandwidth and WLANs, and everything else is P2.
2. Update the ESL.  Translation: dump voice services.
3. Identify more efficient architectures.  Could this be an attempt to get cell phone data plans out?
4. More equitable distribution of funding.  The 90% gravy train is going back to the roundhouse.
5. Driving down prices.  More about this later.
6. Changes in CIPA applicability.  Interesting, but probably nibbling around the edge.
7. Get better data.  This means bigger forms, like the new Form 471, which is going to include a "Block 2 From Hell" for each FRN.  (By the way, notice that the 471 will no longer collect data on voice service.  Is that "Taps.." I hear playing in the background?)

About driving down prices, I heard four suggestions:

1. Increasing use of consortia:  Nope.  Consortia increase complexity, and only lower prices sometimes.  Sometimes they increase prices.  And they are always more difficult to get funded through E-Rate.
2. Bulk purchasing: Well, it's a nice idea, but it's totally hamstrung by the Form 470 process, since you have to identify who is covered by the 470 before filing, so new members can't take advantage of the pricing. And combining state contracts with the E-Rate is a headache.
3. Transparency:  Yes! The level of secrecy in this program is astonishing.  For some reason, Item 21 Attachments are secret, so none of us can see what other people are paying for services.
4. Improving procurement process:  There is only one thing the FCC needs to do to improve procurement: stop trying to regulate the purchasing decisions of locally elected school boards.

We didn't hear a peep about the most effective option for driving down prices: Lowest Corresponding Price. Maybe it's in the full NPRM.  Or maybe the telcos spiked it.

And now the wait begins.  Since the Commission gave the WCB the right to edit the NPRM, does that mean there will still be some changes before we see it?  That could be weeks.

Sputnik vs. our children

Busy week, so I'm only just getting to Wednesday's Senate hearing just as the FCC meeting is about to start.

I wondered if there would be some hard-hitting investigation, but I should have known better.  Sen. Rockefeller (D-WV) stacked the witness panel with:

1. A school tech coordinator from Louisiana
2. A state librarian from Maine (which made sure a Maine accent was still heard with Sen. Snowe (xR-ME) unfortunately having retired)
3. A VP from Cisco
4. A commissioner from the LEAD Commission (Leading Education by Advancing Digital, created to advance digital learning)

So of course it was a lovefest.  The witnesses were quite good, actually, but nothing they said really sticks with me.  The main point of every witness?  E-Rate needs more funding.  The only question seemed to be whether we need to increase funding to help our children, or we need to increase funding to keep us from falling behind in the digital arms race.

The only person who was willing to throw cold water on the festivities was Sen. Ron Johnson (R-WI), a tea party favorite, who tried to point out that local funding was better than a federal program, but of course got nowhere with the witnesses.

The only factoid I got from the hearing was the estimate that applicants spend $50-100 million per year on E-Rate consultants.  This is the worst kind of number, because there was no indication where that estimate came from, and now that someone said it in a Senate hearing, we can expect to see that estimate popping up every time someone wants to talk about the cost of consultants.

Is the figure accurate?  Damned if I know.  My guess would have been half as much, but I don't know what other consultants charge, because even if we wanted to play "I'll show you mine if you'll show me yours," we have to be really careful about appearing to collude on pricing, so we just never discuss fees.

So I didn't learn much, but it was nice to hear so much positive talk about the E-Rate.

The politics of Pai

I wanted to put up a separate post about the politics of Commissioner Pai's proposal, to keep that separate from the merits of the proposal.  I'm not going to get into the whole Democrat/Republican thing, nor talk about support on the Hill, because my blood pressure rises if I think about DC politics too much.  I'm thinking about two interest groups outside DC that are going to oppose the Pai proposal.

First, applicants will be against it.  Actually, most applicants won't be against it, but that's not how it will appear.  Like any change, this proposal will create winners and losers.  The losers will howl loudly, and the winners will be smugly silent.  And those who neither win nor lose will pay no attention.  So the only applicant voices we'll hear are those that have lost significant funding.

Second, the telcos will be against it.  It does seem unfair that a lot of USF funding comes from voice, but the E-Rate would no longer fund voice.  Rural Healthcare already doesn't cover voice, and Connect America (nee High Cost) and Low Income are both shifting away from voice.  On the other hand, telcos are shifting away from voice, too, so maybe they won't mind, if they can still keep most of the funding.

Who will be in favor of the proposal?  Equipment providers.  The removal of the Priority One/Priority Two distinction is a boon for companies selling network electronics, because they will be able to say, "You can buy our widget at 75% off!"  Of course, that won't be true for most applicants, who will hit their cap long before they think about network upgrades, but it won't stop companies from saying it.  And those schools in WV trying to dream up ways to spend $128/student will naturally turn to equipment.

I think VoIP providers will cling to the commish's use of "stand-alone" in front of "telephone service" as a way to shoe-horn their services into the E-Rate.  And bundling aside, if data circuits are subsidized and voice circuits are not, that tilts the playing field in favor of VoIP.

None of the above matters in the question of whether Commissioner Pai's proposal should be approved, but I'm guessing it will matter in whether it will be approved.  Although I suppose all the above will be swept aside by party lines.

I can't wait to see how it all unfolds.

E-Rate 2.0 Plan B

[I've edited this post based on updated information.  New info is in green; incorrect info is struck through.]

This was already a big week for the E-Rate, what with Congressional hearings today and the FCC scheduled to release a major NPRM tomorrow.  [For the benefit of those of you who have real jobs and therefore don't know what an NPRM is, when the FCC is planning to change a rule, they release a Notice of Proposed Rulemaking in order to give the public the opportunity to comment.  By the way, how is "RM" the acronym for "Rulemaking"?  My suspicion: Republican Commissioners didn't want any part of something called "NPR."]

In addition to all that excitement, yesterday FCC Commissioner Ajit Pai gave a speech at the American Enterprise Institute, in which he laid out his vision for the E-Rate program.  Not only did I get the full text of the speech, I got a nice summary, too.  In general, he's got some good ideas, and the Commissioner said, "E-Rate is a program worth fighting for," so all in all, a good speech.

But first, I have to get this off my chest: Commissioner Pai makes it clear that he has no love for E-Rate consultants. "[P]arents want funding to be spent on the classroom, not on consultants."  I can't argue with that, and I agree that the program should be simpler and more transparent.  But he slams consultants falsely in two ways.

1. "Now, there are sure to be some who will be skeptical of a student-centered E-Rate program. Consultants may fear lost business if the paperwork and the labyrinth of rules disappear."  Show me those consultants.  Read back through this blog and see how often I advocate simplicity and transparency.  At our E-mpa® meetings, we bemoan every new complexity and advocate for simplicity and transparency.  And hey, Commissioner Pai, your "student-centric" E-Rate proposals are mostly a rebranding of ideas created by Funds for Learning and yours truly.  As a group (or "cottage industry," as Commissioner Pai calls us), consultants are advocates for simplifying and improving the program.
2. "[A] consultant hired and paid Houston school employees to work on a variety of projects, all contingent on the consultant successfully winning E-Rate-funded contracts.... The consultant allegedly offered more than $60,000 in loans to decision-makers in the district and entertained them in luxury suites at sporting events and with tickets to the Super Bowl."  Isn't this the 2002 problem that resulted in a 2010 settlement?  Yup, here it is on page 29 of an FCC OIG report.  So all the wrongdoing above involved school district employees and service providers, not consultants.  Maybe I'm being over-sensitive, since the Commissioner didn't say "E-Rate consultants," but every other time he uses the word "consultant," he means "E-Rate consultant."

So while I share Commissioner Pai's disappointment at the program's complexity, and the abuses that have taken place, I take exception to the implication that those problems are the fault of consultants.  As a whole, consultants are a force for good in this program.  Remember back in 2009 when the GAO asked applicants were surveyed on who the best source of E-Rate information?  79% said consultants.  And only 25% of applicants were using consultants, so the majority of applicants not paying a consultant said consultants were a good source of info.  We ranked better than USAC or state E-Rate coordinators or the FCC.

OK, now onto the important stuff.

Commissioner Pai starts out (after plugging a number of companies including ITT Tech) by laying out the structural problem he wants to address.  And just to show where this consultant's priorities are, I'll list the year in which I first addressed those same issues in this blog:

1. Delay: the application process takes too long.  2007
2. Paperwork: the application process is too complex.  2006
3. Outsourcing: applicants waste money on consultants to manage the application process.  2005
4. Bad priorities: the funding should go to wiring, not phones, and to less-densely-populated states. 2013
5. Bad incentives: 90% is too close to free, and unlimited funding requests are bad. 2005

I think the commish should have listed "lack of transparency" as its own problem, instead of just putting it as a sort of sub-complaint under #5.  To me, the lack of transparency is a bigger problem than #1 and #2.
Now on to the Commissioner's four-step solution:

1. Allocate funding on a per-student basis, with some weighting for rural and poor students.
2. Fund "next-generation technologies that directly benefit students."  Don't fund phones, non-instructional facilities.  Get rid of Priority One/Priority Two.
3. Simplify the E-Rate application process.  A one-page application and one other form to "report back how they spend the money."
4. Add accountability and transparency. Lower the top discount rate to 75%. Make the discount rate 75% for all applicants.  Post online info on exactly how the money is spent.

And my thoughts on those proposals:

1. I given my thoughts on FFL's per-student cap proposal; a cap is a lot more complicated than it looks at first glance.  His example has caps of $128 for a student in WV and $32 for a student in NYC.  Two red lights there.  First, while WAN connections are probably more expensive to WV schools, NYC schools will pay something like 5-8 times more for internal connections so I'm not sure it's fair that the WV schools gets so much more.  Second, he mentions that the student is in a "tony" part of NYC; does that mean that the per-student cap is not going to be set on a district-wide basis?  So much for simplicity.
2. I agree with the concrete suggestions, but not the rhetoric. The first paragraph in this section says, "redirect spending away from outdated services and toward next-generation technologies..." while the second says, "Different schools face different circumstances, so letting each choose where to spend E-Rate funds...will stretch limited dollars and will have the biggest impact on students."  So I guess it's good to let local districts spend the money however they see fit, but only as long as they see fit to spend it on the technologies that the FCC finds "next-generation."  
3. I've already suggested that the application could just be a list of service providers and account numbers.  And for smaller applicants, just let them list total pre-discount spending.  Discount calculations based on census data?  That actually makes a lot of sense for libraries, but not so much for private schools.  For public schools, I would think NSLP numbers would be a better indicator of student income levels.  One unmentioned consequence of the Commissioner's suggestion: competitive bidding would no longer be part of the E-Rate process.  I've already said that the FCC should get out of the business of regulating the purchasing practices of local school boards.
4. I'm all for lowering the top discount rate to 75%.  Though I have to say, if we're only going to have one discount rate, can we make it 65%, like over at Rural Healthcare? The certification that "E-Rate funds will be used to benefit students."  All schools have boards whose job is to make sure all funds are used to benefit students.  I like the idea of publicly posting detailed information on how the money was spent.

Next the Commissioner lists the positive outcomes.  Here are those outcomes with my comments:

1. The simpler process will encourage more applicants to apply, and decrease reliance on consultants.  Both would happen, and both are positive for the program.
2. Local school districts would be empowered to focus on student needs.  True, as long as the local boards don't think students need services that the FCC finds aren't "next-generation" enough.
3. More careful spending.  I agree that cutting the top discount rate will restrain spending.  And if NYC gets $32/student, that will certainly force them to restrict spending.  But I'll wager that for many schools in WV, $128/student would be a spending increase.
4. A fairer distribution of funding.  Let's ask those tony NYC parents if they think it's fair that their children will get $6.40 in E-Rate funding ($32 x 20% discount) $24 in E-Rate funding ($32 x 75% discount) while students in WV are getting $96 ($128 x 75% discount).  Fair is in the eye of the beholder.
5. Sunshine and transparency.  Hear, hear.  I am all in favor of transparency.  But I think transparency should be part of the proposal, not in the list of benefits.  Transparency will require FCC action, like publishing the 700 pages of secret rules.

And here are a few other comments.

The commish creates a new (at least to me) term: "the red-tape funding gap."  He correctly points out that E-Rate disbursements are around $400 million lower than the cap each year.  But he incorrectly attributes it to administrative delays caused by applicant mistakes.  It's actually caused mostly by applicants over-estimating their needs, because their staff made fewer phone calls; or they had to apply for the same funding in two funding years, because the denial threshold for the current year wasn't set before the filing window for next year; or whatever.  It also used to be caused by applicants finding more cost-effective solutions mid-year, but the FCC's heinous SPIN change rules put an an end to that.  It's rarely due to an applicant mistake.

The commish only seems to want to exclude "stand-alone telephone service."  Please don't tell me that bundled telephone service would still be eligible.  We've had enough bundling trouble lately.

Saying that "an application for E-Rate funds can take a year to complete" is a serious understatement.  Even without any delays, appeals, etc., the process normally takes us longer than two years.  By September, we're already working on collecting info for the following funding year, while still completing BEARs for the previous funding year and 486es for the current funding year.  It's impossible to get from filing the Form 470 to receipt of all funding in less than 18 months, at least for monthly bills.  For Priority Two projects, I advise my clients to apply for funding 18 months before implementation, and be prepared for it to take 30 months.

The proposed cap system sort of double-counts poverty.  Because poor students get a higher per-student cap and schools with a high proportion of low-income students get a higher discount.  So a student from a family that makes $60,000/year in a school with similar families might get $16.80 ($42 x 40% discount), while a kid in the next town where families make around $40,000/year would get $63 ($84 x 75% discount).  That seems unfair, but there's an interesting idea in there.  By adjusting the pre-discount per-student cap, you could compensate low-income districts for the funding lost to a lower top discount level.  By creating two matrices, one for discount level, the other for per-student funding, you could get the benefits of lowering the discount level without lowering the amount of funding that low-income districts receive.  So much for simplicity.

In a couple of places, it seems that the Commissioner envisions a process where applicants file a (one-page) application, then get the funding, then later report on where that funding went.  I like the idea in principle, but in practice I'm afraid that when the report is filed, USAC will decide that some of the funding was spent on items not on the "next-generation" list, and will take some funding back.  And what will happen to responsible local boards who decide they don't need to spend so much money on next-generation services?

Commissioner Pai mentions that he wants the program improved by September 2014.  I'm all for expeditious change, but in the case of such drastic change, I would ask the Commissioner consider multi-year contracts.  Applicants got into multi-year deals based on one set of rules, and it could be ruinous to pull the rug out from under them in 3 months.

So I salute Commissioner Pai for adding his voice to the dialog, and I like many of his ideas.  But as always, the devil is in the details, and we don't have any details.

Most importantly, the commish consistently capitalized the "R" in "E-Rate."  The Big R is gaining steam.

Ears cut short?

I took a look at Funds for Learning's notes on USAC's conference call, and something jumped out at me: in June, 43% of the funding was denied.  What?!  Why?  So I looked at all the denial reasons for the whole funding year, and it breaks down to:

Denial Reason	FRNs	Requested	Avg. per FRN
471 cancelled by applicant	18	$1,854,308.66	$103,017.15
471 cancelled by RAL	383	$36,358,325.87	$94,930.35
None	10	$60,765.22	$6,076.52
Red Light	18	$461,916.85	$25,662.05
Grand Total	429	$38,735,316.60	$90,292.11

Oh, well, that makes sense.  401 FRNs cancelled by applicants, 18 auto-denied due to the Red Light Rule.  And I'll bet the 10 denied FRNs without any explanation are probably all cancelled by applicants.  So PIA hasn't actually decided to deny any applicants.  It's just slam-dunk denials, to go with the slam-dunk approvals granted so far.  One difference: the $90,000/FRN for denials is much bigger than June's $11,000/FRN for approvals.

Where, oh where, has PIA gone?  Where, oh where, can they be?

White House Down with Broadband

The White House has released a report on Four Years of Broadband Growth.  Without reading it, I know what it says: We have had great success, but challenges remain.  That's what politicians always say when assessing their own performance.  But let's take a real look.

Yes! It opens with bullet-point factoids.  My second-favorite form of information, behind graphs.  And it allows me to make my own bullet points:

• In 2000, 4.4% of households had broadband; by 2010, 68% did.  Further evidence supporting my claim that the E-Rate can't take all the credit for the large number of connected schools.  Are they counting every household with a smartphone?
• Networks with >10 Mbps reach 94% of homes.  More evidence that the E-Rate can't take all the credit for the large number of connected schools.  Or it would be, if I believed this number, which I do not.  There is no way 94% of US homes are connected at >10 Mbps.  So I guess "reach" means "run somewhere close to" or "serve a customer in my town" or some other useless metric.  My town is served by FiOS, but that does me no good in my office, because Verizon chose not to run fiber on this block, so I might as well be on the moon.  I cannot get FiOS.  Now now, not ever.  But the FCC would probably say that FiOS "reaches" me.
• Delivered broadband speeds doubled.  That's disappointingly slow.  According to Moore's Law or Nielsen's Law, doubling should take 2 years, not 4.  Butler's Law calls for a doubling every 9 months. Again, I need a footnote.  Are we talking about average or median?  All homes and businesses, or only those with Internet connections, or only with broadband connections?  Average mobile data connection speed was 2.6 Mbps.  That's pretty impressive.  I think I found the source of this number, too, even without a footnote.  But 3 Mbps is the cut-off for broadband, so what's this factoid doing in a report on broadband?
• Annual investment in wireless networks grew more than 40%.  OK, but shouldn't we be talking about investment in broadband, not cell phones?  Some of that investment might lead to broadband speeds, but who knows how much of it.
• Over 500 million Internet-connected devices.  That sounds about right.  But it should be higher.  The first Internet-enabled fridge was sold in 2000.  Shouldn't we all be updating anti-virus on our toasters by now?  What are we waiting for?  Don't you think my Facebook friends would want to know how dark I'm making my toast?  Imagine the productivity gain if my appliances could save me the trouble of tweeting what I'm having for dinner or watching on TV.  And my damned fridge should be telling me when it's time to buy milk (and when it's time to throw it out), suggesting foods I might like based on past selections, and telling me where the best tomato prices are.  Right now the only info I'm getting from my fridge is a whine telling me that I'll probably need a new fridge soon.

Uh oh, here we go into the text.  I think I'll keep going with bullets:

• Today, about 91 percent of Americans have access to wired broadband speeds of at least 10 Mbps downstream.  (page 2)  Wait, didn't you just say that it was 94%?  Or are you saying that the 9% of Americans who don't "have access" are in the 6% of houses that are not "reached" by 10 Mbps networks?  The stat I want to see is the percentage of people (or households) which have 10 Mbps. According to Akamai, that's 19%.
• 81 percent of Americans have access to 10 Mbps on mobile wireless broadband (p.3).  What does that mean?  At some point during the day, 81% of Americans will be bathed with radio transmissions that have the potential to transmit 10 Mbps, if they had the right device?  Because we for damned sure can't actually get 10 Mbps.  My 4G device on Verizon's network, sitting stationary in tower-rich suburban NJ, does not consistently get 10 Mbps downstream.  Hey, didn't we just read that the average mobile data speed in 2.6 Mbps?
• In just the last two years, more high-speed fiber cables have been laid in the United States than in any similar period since 2000 (p.5).  Translation: it only took 10 years to catch up with the fiber glut that was part of the dot com bubble which burst in 2000, and there are now places where there is no idle fiber.
• The ConnectED initiative will, within five years, connect 99 percent of America’s students, through next-generation broadband (at speeds no less than 100 Mbps and with a target of 1 Gbps) to, and high-speed wireless within, their schools and libraries (p.24).  Well, that puts to bed any question of whether Priority Two funding can be saved or Web hosting should be dropped from the program or whatever.  To get to 99% broadband and 99% WLAN, the E-Rate will have to stop funding everything but WAN circuits, Internet ports and WLANs.  Voice and video services and equipment out completely, "Internet-related services" like email and Web hosting  out (which should mean no servers).  Imagine an Eligible Services List with just digital circuits, Internet ports, wireless access points, and data switches.  Or maybe all those are Priority One, and everything else is Priority Two.  There won't be any money for P2, but at least it makes it look like the program hasn't been completely changed.

What a plethora of weak stats leading to the strange conclusion that WLANs in schools are a national priority.  I can't say I oppose the new priorities, as long as cell phone companies aren't able to make "one-to-one" mean one mobile data connection per student.  That would be a shame.

Still, it is clear that we've had 4 years of success, but challenges remain.

Wandering amid the weeds

USAC sent the FCC some data from 2011-2012, and you know me, I can't resist data, even if there are no charts.  And of course, I'm not going to do a responsible analysis, just pick out tidbits that look interesting.  So here they are, in no particular order:

1. Web hosting took up 1.4% of the total amount committed for Priority One.  So anyone who hoped that kicking Web hosting out of the program would help the funding crunch, sorry, but you'll have to look elsewhere.
2. Wireless Internet Access is becoming another bête noire, but it ate up only 1.5% of Priority One commitments.  It was over 7% of Internet access funding, though, and it's been spiking since 2011, so those numbers are probably higher.
3. For all the excitement VoIP has caused, it was only about 1.2% of commitments.
4. T-3 Internet access by far the most popular type of Internet connection.  According to USAC's numbers, it accounts for 37% of Internet FRNs, and 31% of funding (if you want to count OC-1 as equivalent, add 5%).  That makes the Obam-E-Rate plan more difficult, because T-3s are only 45 Mbps, a T-4, if you could even find  one, is only 274 Mbps, and there is no T-5.  But it seems most carriers, once you get above T-3, use the OC-whatever name.  To reach Obama's target of a gig, applicants would have to go OC-24, but you never see that, so they might have to go OC-48, or bond two OC-12 circuits.  
5. 20% of Internet access FRNs are for T-1 access, 10% are on DSL, and 5% are on cable modems.  A third of applicants are looking at a painfully big leap to 1 Gbps.
6. Leased fiber (dark and lit) accounted for a total of 103 FRNs.  That's less than one tenth of one percent.  They consumed less than 0.2% of committed funding.  Man, that's a whole lot of rules chasing a tiny amount of funding.
7. I knew ATM was dying, but I didn't realize it was completely dead: 38 FRNs altogether.  I kind of think some of those "OC" circuits are really ATM, but maybe it really is dead.

What are the big consumers in the fund?  Let's look at the top ten categories, in terms of percent of the total Priority One commitments.

OC-N (WAN)	15.47%
Cellular (including PCS)	9.04%
Local/Long Distance Phone Service	8.85%
OC-03 (WAN)	8.62%
T-3 (Internet)	6.80%
Local Phone Service Only	5.86%
T-1 (WAN)	5.04%
T-3 (WAN)	4.90%
OC-03 (Internet)	3.86%
OC-N (Internet)	3.51%

Some observations on that table:

1. If you add up local/long distance, local only, Centrex, POTS and PRIs, we get up to about 21% of Priority One funding.  I would have guessed that voice consumed more funding.
2. OC-N digital circuits lead the pack.  That could be good news for the Obam-E-Rate, because maybe we're seeing the N because USAC only goes up to OC-12, in that case, those applicatns are already at a gig.  But I'm afraid it's just what applicants put down when they have OC-1 (45 Mbps) at branches, and OC-3 (155 Mbps) at the hub.
3. Cellular is bigger than any other single voice category.  Kicking cell phones out of the E-Rate program would actually make a noticeable difference in demand, though it is far from solving the funding crunch.
4. The E-Rate has a lot of products that get a little funding.  Only 12 products have 3% or more of committed funding, and there are 73 products on USAC's list.  51 products get less than 1% of all commitments.  Time to do some weeding.

Sorry, no big conclusions.  Just a little puttering through the data.

Goring sacred cows

I like the E-Rate.  I think it's been very helpful in bringing broadband to the classroom.  I think further growth of the E-Rate would be a good thing.  [Can't you just feel the "but..." coming?]  But today, I want to complain about two stats that I have seen repeatedly over the last few weeks.

First, the chestnut that the success of the E-Rate is demonstrated by the percentage of schools that are online.  If you read anything by a politician supporting the E-Rate, you'll read that before the E-Rate, 14% of schools were online, and now 95% are online.  I won't quibble with the actual numbers; I don't know where they come from, but they're probably pretty close to right.  What I do quibble with is cause-and-effect.  Would the percentage be lower if the E-Rate hadn't existed?  Let's take a look at how Internet use has increased for those not benefiting from the E-Rate.

Here's a nice graph of Internet use among American adults. (You know I prefer to get my facts from pictures, not text.  And yet I almost never put graphs on this blog.  Just lazy, I guess.)  The use of Internet among adults has grown from around 20% in 1996 to about 80% today.

What about other organizations?  Less than 1% of components of federal agencies do not have Internet access (see the bottom of page 32 of this OPM report).  So the feds are better connected than schools.

Unfortunately, I couldn't find any data on municipal governments' Internet connections.

It's also hard to get stats on private companies, but it looks like in 1995, about 15% of companies had Internet access, but that climbed to over 60% by 1997.  I can't find any figures for 2012, perhaps because the assumption is that every company is connected.

Why don't the politicians mention libraries?  The Census Bureau says over 99% of public libraries offer public Internet access.  Surely that is a better stat; 99% beats 95%.  Oh wait, only 40% of libraries participate in the E-Rate. (Hang on, the Census Bureau says there are twice as many libraries as the ALA info I used, so maybe only 22% of libraries apply for E-Rate.)  So what percentage of libraries without E-Rate funding still offer public Internet access?  No matter how I slice it, I come up with at least 98% of libraries with no E-Rate funding still offering public Internet.  E-Rate can't take credit for that.

So I'm hard-pressed to show that E-Rate funding caused the increase of Internet access in schools.

I think the compelling message is not how many schools have Internet access, but the speeds that those buildings connect at.  So I'm happy to see that the new proposals focus on connection speeds.  Now if we could fix the Item 21 Attachments and stop hiding them, we would have a very complete picture of the bandwidth available to U.S. schools and libraries.

Without the E-Rate, I think close to 95% of schools would still be connected, but that connection speeds would be lower.  Alas, that's harder to prove, and more difficult to cram into a simple sentence, so we'll keep hearing "14% to 95%."


Second, several sources have said that 80% of  schools don't have sufficient broadband connections.  I have 2 problems with this.  First, the stat is based on a survey, and it's in our nature to want just a little more than we have.  Ask any American, "Do you have enough _____?" with anything in the blank (except taxes), and most people will say, "No."  How much is enough?  More than I have now.  If we took The DeLorean back to 1996, snagged a school employee and brought her to her school in 2013, and asked her if the bandwidth was good enough, we'd probably have to sit through her saying "Wow!" half a dozen times before she collected herself enough to say, "Oh, yes!"  If we asked the 2013 version of that employee the same question, chances are she'd say, "No."

I also doubt that most schools know how they are using bandwidth now and where the bottlenecks are.  I used to think Verizon's data network was causing my phone to load web pages so slowly, but then I connected it to a WLAN, and discovered the problem was the device, not the bandwidth.  In my experience, school network admins are getting much better at monitoring, and have a better handle on where the bottlenecks are, but still, most of the admins I talk to are too busy putting out fires to really determine why Ms. Smith's computer loads web pages so slowly.


I know we have to come up with something to support our drive to increase the size of the E-Rate, but I wish we had something better than these two factoids.

For those of you who were worried, I got a new phone, and I'm very happy with the speed.  I'm sure that's a result of a faster processor, not a faster network.  And I'm sure that in a year or two, I'll find it unbearably slow.