So was the Seventh Report & Order (7R&O)/E-Rate Modernization Order (EMO) a good thing?
Most of the reactions I've read are full of platitudes like "good first step" and "squandered opportunity." Among politicians, the choice of platitudes seems to fall along party lines. The reaction from applicants has generally been in the "good first step" camp.
I think the 7R&O/EMO does more harm than good. Let's look at whether it meets the goals the Commission put forward in the statement released Friday:
Closes the Wi-Fi Gap: The 7R&O/EMO takes 3 concrete steps to increase Wi-Fi adoption: 1) leverages the fund to free up an extra $2 billion, 2) tosses other services out of the program, and 3) caps C2 spending at $150/student ($2.3/sq.ft. for libraries). There is widespread consensus among program participants and the American public that this program should get more money, but leveraging the fund is not the way to do it, especially since it only gets us 2 years of funding. I suggested tossing voice out of the program over a year ago, so I have no problem with trimming the Eligible Services List. The C2 funding cap is just another in a string of bad rules to try to overcome the perverse incentives created because 90% is too close to free (and so is 85%).
In short: Focus on Wi-Fi and broadband, good. Creating more perverse rules to compensate for perverse incentives, bad. Only enough funding to get Wi-Fi to 30% of students, even if we stiff libraries.
Maximizes E-Rate Spending: There is no evidence that bulk buying lowers prices, and creating incentives for bulk purchasing will encourage applicants to join bulk buying even when buying individually would be cheaper. Transparency is very good. Did someone say Lowest Corresponding Price?
In short: Increased price transparency should more than overcome the pricing inefficiencies of bulk buying.
Simpler Application Process: The streamlined process for multi-year applications is apparently only for some multi-year applications, and really, if you're doing a 471 already, the effort of adding a normal Block 5 item for your multi-year contract is negligible. Apparently at first, the small-dollar, cost-effective FRNs with an expedited process will be only "business class" Internet access (around $200/month for 100 Mbps best-effort). So now if I have a multi-year Wi-Fi contract, low-dollar Internet access and month-to-month phone service, I have to keep track of 3 different application processes? And 2 different discount amounts (3 if I'm a 90% applicant). How is this simpler? And I have to file electronically, regardless of whether I find that simpler or more difficult? And now I have to amend my district's document-retention policy to include keeping E-Rate-related documents for at least 10 years, hoping that won't conflict with state rules?
In short: Faster application processing is good, but it's not due to this order. The other reforms just make the application process more bewildering and onerous.
Excellent: pricing transparency
Good: focusing on broadband
Bad: everything else
Good in a bad sort of way: This order will drive more applicants into the arms of E-Rate consultants, so my personal business outlook is good. It's confusing enough just trying to guess the name and acronym for the 7R&O/EMO.
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