O'Rielly with a capital "R"

Commissioner O'Rielly has made his first blog post, and it's about the E-Rate.  Let's take a look at what he says, and my ill-considered opinion of it.

But first, the most important issue.  In his first written statement about the E-Rate, did the Commissioner capitalize the "R" in "E-Rate"?  Yes!  He used "E-Rate" 15 times, and capitalized it every single time.  Full marks.  And we are all spared the prospect of this blog snarkily referring to him as O'rielly.  Dedicated grammar geeks will also have noticed that the Commissioner uses "E-Rate" anarthrously.  I'm surprised this isn't more common among E-Rate geeks.  It seems anarthrosity is a government employee thing.

Uh oh.  We're not off to a good start in the preamble.  The Commissioner makes the case that expeditious reform is needed because of waste, fraud and abuse (WFA).  He provides links to evidence of WFA [though I almost missed the links because the FCC's CSS has links in dark blue and not underlined, which are tough for this old man's eyes to notice].  I like that the Commissioner is linking to supporting evidence, but all the instances of WFA in his links occurred more than 10 years ago, which doesn't give me a feeling of urgency.  He also mentioned that internal controls are insufficient, based on a GAO report.  I won't complain that the GAO report is over 3 years old, since I just got around to reading it a year ago.

The main problem with this program is not that a very small percentage of bad actors are cheating or wasting.  The main problem is the administrative burden on applicants, which causes many to forego funding or be denied for funding which they deserve.

Then he lays out 6 priorities.  Here they are with my commentary:

1. "E-Rate must not increase costs on consumers."  Well, I can't say I like that.  The program is vastly underfunded.  If we're not going to increase income, we'll need to chop expenditures.  So what drastic cuts to the program will the Commissioner suggest?  Let's wait and see.
2. "E-Rate must be refocused on broadband access."  All right, here we go, let's see what cuts the Commissioner proposes: paging and long distance.  Really?  That's all you got?  First, the total cost of those two is maybe $20 million ($0.02 billion) and is falling every year.  The Fund is several billion dollars short of funding all the services in the ESL for all applicants.  If you want to pay for more broadband without raising fees, then you'll need to toss everything else, including all voice service.  Second, if you cut long distance service but not local service, you open a gigantic, smelly can of worms because so much long distance is bundled, and the E-Rate has a poor track record in teasing out bundled services.  Third, the program is paid for by a fee on interstate telecom, so it seems unfair to have only long distance providers pay in, but only local service get funding.  More broadly, I don't have a problem with the focus on broadband, but isn't a Republican Commissioner going to get in trouble for agreeing so wholeheartedly with the President's mission?
3.  "E-Rate matching requirements must be made consistent with other federal programs."  Hear! Hear! I don't think there is consistency among all federal programs, but we could at least have consistency inside the USF by making the E-Rate's top discount 65%, like over at Rural Health Care.  I'm all for that.  A 90% discount is too close to free.
4. " E-Rate funding must leverage the private sector networks and services, not overbuild them."  The Commissioner doesn't want the E-Rate to pay for "duplicative networks."  Yeah, it sounds bad when you say "duplicative."  So instead, let's have E-Rate pay for building "network competition."  I don't think the presence of a single provider is a reason to deny funding for competitive providers.  But I completely agree with the Commissioner's minimum: "schools and libraries should not use E-Rate subsidies to become broadband providers outside of their campuses."  I'm happy to see at least one Commissioner come out against the weird idea of "anchor institutions."
5. "E-Rate funding must not over supply."  Yes.  I just wish that the Commissioner had come out and said, "Not every school needs 100 Mbps."  I deal with a lot of schools, and in general, an individual elementary school does not generate enough traffic to fill a 100 Mbps pipe.  They probably will at some point in the future, but buying bandwidth is not like wiring a building; future-proofing is a waste.  When you need more bandwidth, you get more bandwidth.  Don't buy 100 Mbps now because you think you'll need it in 3 years.  100 Mbps by 2015 is wasteful for most schools.
6. "E-Rate program administration must be revised."  Yes.  I have no idea if the Commissioner and I would agree on specific revisions (and his interest in WFA ancient history is not encouraging), but I do agree the program needs to be revised.

So kudos to Commissioner O'Rielly for letting us know what he's thinking about the E-Rate.  And I found more common ground than I expected.  And, of course, he comes down on the right side of the program's most important issue: the big R.