Blowin' in the Wind

What's coming out on July 11th?  Chairman Dingo [sorry, I couldn't resist] has released the broad strokes of his plan; the particulars are circulating at the FCC, but not public.  Let's take a look at the proposed changes.

Close the Wi-Fi Gap

• Commit at least $1 billion in support to Wi-Fi next year to connect over 10 million students... followed by another $1 billion in 2016 with predictable support continuing in future years.  
• Provide multi-year funding predictability..., and stop cutting rural schools out of Wi-Fi funding.
• ... gradually phasing down support for non-broadband services.
• Adopt clear broadband goals to measure overall program success....

My reaction:

• Three problems: 1) a billion is not nearly enough, so they'll have to implement the Pecking Order Rule, 2) if you connect 10 million students a year, it will be 2021 before you connect 99% of students and 3) if you carve out $1 billion for Wi-Fi, there won't be enough left to cover broadband.  Could we see pro-rating of broadband access?
• Does "multi-year funding predictability" mean multi-year funding commitments to cover multi-year contracts?  That's a fine idea, but if the fund doesn't increase, the multi-year commitments will consume the entire fund, and no one will get funding for new services.  No one is "cutting rural schools out of Wi-Fi funding."  Rural schools face the same standards for Wi-Fi funding as everyone else.  It may be true that there is not as big a concentration of poverty in rural areas, so the P2 gravy train has not reached them, but that's not being cut out.
• At least he said "non-broadband" instead of "obsolete."  Let's be honest about why we're tossing voice: not because it's obsolete, but because the FCC wants to focus on broadband.
• Clarity is good.  We'll have to wait and see if the goals are good.

Make E-Rate Dollars Go Farther: 

• Set the maximum program match at 4 to 1  for Wi-Fi services.
• Speed consortium applications to drive down prices.
• Increase transparency on how E-rate dollars are spent and on prices charged for E-rate services.
• Leverage GSA pricing so schools can buy for less.

My reaction:

• Finally, the death of the 90% discount!  Oh wait, it's only for Wi-Fi?  So I guess some applicants will still get everything else at 90%.
• I'll keep saying it: consortium purchasing does not drive down prices.
• I'm all for transparency.
• Well, first of all, schools and libraries can already use GSA pricing, if state law allows it.  Second of all, GSA pricing is not the best.  Let's look at the Cisco AIR-CAP3702I-A-K9, which is Cisco 802.11ac access point with internal antennas.  Oops, it's not avaialable through GSA.  OK, let's look at the model with the external antennas and hope the school can place them where students can't detach the antennas.  On GSA, the lowest price for the AIR-CAP3702E-A-K9 is $1,020.48.  On Amazon, it's $794.61.  On Newegg, it's $925.89.  OK, maybe Amazon and Newegg are a little sketchy.  I don't have a quote for a AIR-CAP3702E-A-K9 in front of me, but if you know anything about buying Cisco, you know it's about the discount off list.  On GSA, the best deal is 36% off list.  That's pretty good.  But I know where I can get 44% off list.  Let's plug those APs into a WS-C3650-48FS-S switch.  GSA: $6,327.71, which is 40% off list. Amazon: $2,365.00.  Newegg: $2,823.99.  Because the GSA schedule is not about getting the lowest price.  It's about administrative convenience and decent prices.

Deliver Faster, Simpler, More Efficient Applications and Other Processes

• Fast, simple process for multi-year applications.
• Expedited process for small dollar, cost-effective applications.
• Speed review of all applications.
• Move to electronic filing of all documents.
• Simplify discount calculations.
• Zero tolerance for fraud or abuse: toughen document retention and site inspection rules.

My reaction:

• I'm in favor of multi-year commitments, but adding a new procedure for those applications does not simplify.
• Yes! Wait, only for "cost-effective applications"?  So your application has to pass a Cost-Effectiveness Review to get the expedited process?
• Yes!
• For 2014-2015, 98.3% of 471s were filed online.  Not much room to move.
• Like, say, by setting up a separate discount matrix for Wi-Fi?  I think this may be the "every school in the district gets the district discount" rule.  Simple is good.
• Are you telling me the FCC has been tolerating fraud and abuse?  I thought we always had zero tolerance.  At least he didn't say "strike force."  But I think tightening rules will increase compliance/audit costs by more than it reduces improper payments.

In sum, it sounds like the application process might actually improve a little, and I'd be happy to see more transparency.  And dropping the top discount to 80% is a positive step, even if it is only for Wi-Fi.