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Monday, August 25, 2014

Prices not yet lower than expectations

Enough whining: it's time to praise the FCC for getting it right on some things.  And by "getting it right," I mean, of course, "agreeing with me."

Back in March, I posted a response to a speech by Chairman Wheeler.  In the speech, the Chairman asked: "What can we do to help all schools pay the lowest price for the best service?"  I made six suggestions.  Let's see how the FCC did on implementing them.
1. Free the Item 21 Attachments! Yes!
2. Enforce your Lowest Corresponding Price rules.  Make service providers tell applicants their LCP. Maybe we'll see enforcement.  I still don't see any punishments mentioned, but the new rules are clearer, so that’s some progress.  And freeing the Item 21 Attachments is a step towards informing applicants of LCP.
3. Toss the Form 470.  Allow applicants to negotiate contracts as they see fit. A little.  The Form 470 is tossed if you use a Preferred Master Contract or buy Internet access for less than $3,600, but you can’t negotiate in either of those cases, and the rest of your purchases still have to use the Form 470.
4. Allow applicants to make operational SPIN changes any time they want. No.
5. Don't force applicants to sign illegal contracts locking in prices 3-4 months before service starts. No.  Well, there is some weird new guidance about not needing a written contract in some cases, but it’s useless and confusing.
6. Lower the top discount levels. Yes.  But they only lowered the 90% discount to 85% for Category 2, which is the absolute least they could do.

So only one unqualified "No."  At least we saw some movement on all but one suggestion.  That's pretty good for the FCC.  And freeing the Item 21 Attachments is really important.  If LCP enforcement happens, that will be huge.

Overall, I give it a C-.  But I'm a pretty tough grader.  If I were grading FCC decisions on a curve, I would give their performance on this list a B, maybe even a B+.

The dark side of a good reform

Will the new district-wide discount level mean more or less funding for districts?  The answer, of course, depends on the district.  But Funds for Learning has given us a big picture.  You know I like pictures, and the graph is a nice summary, but in this case, it boils down to two numbers:
32.4% of districts will get less funding because of the new calculation
14.9% of districts will get more funding because of the new calculation

OK, Block 4 got simpler for some applicants.  Those with more than one location which aren't applying for Category 2 and have no other reason to separate out locations (like different services to different locations) will no longer have to supply location-by-location NSLP data.  That's a good thing, and a real simplification of the process for applicants.  It is also a significant streamlining of the PIA process.

But it's a bitter pill that the overall effect of this simplification will be a cut in funding.  Almost a third of applicants will see their funding cut.

Is it just me, or does it seem like all the "reforms" mean less funding for applicants?  At least this one is a real simplification, unlike so many other changes, which are mythic simplifications.

Friday, August 15, 2014

Kafka Lives!

I just stumbled across a blog post from 2008 concerning the pile-up of appeals and complaints about Cost-Effectiveness Reviews.  It ended with: "So when will we see some FCC action on this? ... Let's hope we don't have to wait five years."

It's been almost 6 years, and no decision has been issued on the appeal I linked in that blog post.  (Unless it was decided secretly.)

The FCC has spoiled another attempt at humor by exceeding my hyperbole.

Secrecy 2.0

We've got secret rules, secret forms, secret funding sources, secret evidence, secret reviews, secret reforms, secret brightlines, secret selection algorithmssecret de minimis standards.  And now you can add to the list: secret appeal decisions.

Seems that back in 2007, the FCC decided several appeals by remanding the applications to USAC.  By email.  As they should, they notified the public of their decision.  Seven years later.

So what if they took their time informing the public about their decision?  No big deal, right?  It's true that the applicants were given a second chance at approval, and at least some of the denials were overturned way back when.  But the applicants might have liked to know that the FCC granted their appeal.

More importantly, we could have used this decision as a precedent.  The denials were part of a USAC practice of requiring that applicants have all the documents listed in the document retention requirements of the Fifth Report & Order (the source of the unkillable "two-signature/two-date" rule).  USAC denied many applications because an applicant didn't create one of the documents in the list.  Several years later, USAC realized that the FCC never meant that all those documents had to be created, only that, if created, they had to be retained.  If this appeal had been published, it would have helped us convince USAC earlier.

What's next?  Secret Commissioners?  Secret disbursements?

Wednesday, August 13, 2014

Hey, Chairman Quint...

Final rant on about the staff report on the E-Rate Modernization Order: projected savings from kicking services out of the program.

I don't know where the FCC got their numbers.  I took USAC's numbers for FY 2013 and dumped them into a spreadsheet.  There is some room for argument, but what I come up with is:

  • $605 million for voice ($700 million if you toss in PRIs, which seems fair)
  • $42 million in other services tossed out of the program

So 5 years from now, when voice funding gets to zero, there will be maybe $750 million in savings.  Not the $968 million the FCC claims.

And here's the real error: that assumes flat demand for broadband.  Look at the increase in P1 demand over the last five years: 29%.  If we take the $1.4 billion in FY 2013 requests that would still be eligible under the new C1 rules, a 29% increase would be $408 million.

So if the FCC's attempt to accelerate broadband deployment is a total failure, and C1 spending keeps increasing at the same pace that it has been increasing, we'll see a savings of $342 million ($750 million in savings less $408 billion in spending increase).  If the FCC is successful in accelerating broadband deployment or in dragging more libraries into the program, that $342 million could evaporate.

We're going to need a bigger fund.

Just some dumb broadband

Part two on my ranting about the staff report on the E-Rate Modernization Order: External Connections.

First, I like using "External connections" instead of "Category 1."  Could we make that official jargon?

The definitions in paragraph 15 don't really describe the situation in most districts.  The definitions make it appear that the purpose of a WAN is to deliver data to the Internet.  Even with so many services moving to the cloud,  most WAN traffic is not bound for the Internet, especially in districts with VoIP internally.  Also, many applicants will have at least two aggregation points.

The data about fiber starting in paragraph 17 is confusing need with ability.  The numbers don't seem right to me, but maybe they're close.  Even if they're accurate, they don't indicate a problem.  Only 15% of libraries have fiber?  Maybe.  But do they need fiber?  I'll use my local library as an example.  For $159/month, they could get 100 Mbps over fiber to their building, since Verizon has FiOS fiber running right in front of the library.  Instead, they get 100 Mbps from the cable company for $139/month.  Would it really improve the program to have them pay an extra $20/month for the same bandwidth, just so they could say they have fiber?  Don't talk to me about scaling: FiOS is not part of Verizon Business Global (which does connections of 1 Gbps and greater), so if the library decides to go to 1 Gbps, it's going to mean pulling a new fiber, no matter which company they're using for their current 100 Mbps connection.

"Based on this analysis, we estimate that only 40 percent of schools will purchase at least 1
Mbps per student of last-mile bandwidth in Funding Year 2014, and only 10 percent of schools will purchase the 10 Mbps per student of last-mile bandwidth needed to achieve the SETDA last-mile goal....  EducationSuperHighway has found ... that over 90 percent of schools are currently below the 1 Mbps per student five-year goal."  And based on my analysis, only 1% of schools will actually use 1 Mbps/student in 2014, and 0% will use 10 Mbps/student.  SETDA just pulled some numbers out of the air.  I can't argue with their guess on the need five years from now, but I can say that at present, using 1 Mbps/student as a standard is just promoting waste.

Those numbers in paragraph 32 look pretty conclusive for the power of consortium purchasing.  Network Nebraska dropped member costs from $87 to $1.28 per megabit per second per month.  A savings of 99.985%.  Oh wait, if you read the actual submission, that's over 8 years.  

For comparison, I'll pick a local district here with about 1,000 students.  In 2006, they were spending $568.65/Mbps/month (breathtaking when you look back on those T-1 prices, isn't it?).  In 2014, they're paying $24/Mbps/month.  A savings of 99.958%.  Or they could go to a 1 Gbps connection for $3.90, for a savings of 99.993%; that 1 Gbps connection would make everyone happy, from President Obama on down, but 90% of the bandwidth would be unused, and it would be a waste of $16,200/year in E-Rate funding.

By the way, that district has access to a purchasing cooperative.  If they joined that consortium and contracted with the same service provider, their costs would go up from $24/Mbps/month to over $34/Mbps/month.  Consortium purchasing would drive their cost up 43%.  (The price for 1 Gbps is 173% higher through the consortium.)  Same vendor, same service.

When bandwidth prices have dropped 99% over the last 8 years, showing that your consortium has cut prices by 99% is not demonstrating success.  And Mississippi definitely shouldn't be bragging about lowering costs only 90% in 9 years.

[Side note: Network Nebraska joins Utah Education Network on my list of consortia that are no longer eligible for E-Rate funding under the new definition of "consortium"; they have private universities and museums in their consortium.]

So my advice to E-Rate applicants: ignore the 1 Mbps/student benchmark.  And take a close look at whether that consortium is really going to save you money.

C2 blues

The FCC has released a staff report on the E-Rate Modernization Order (I guess I have to give up on calling it 7R&O and go with EMO) "to help stakeholders and the public navigate the large and data-intensive record in the E-rate Modernization proceeding...."

You know I'm going to do an "analysis," which for this blog means, "picking out a few things here and there and making snarky comments and rants about them."  In this post, let's look at the new Category 2 (C2) info.

[But first, a quick side rant: " the schools and libraries universal service support program, commonly known as E-rate...."  I would submit that it is more commonly known as "E-Rate" (with a capital "R"), among Congresspeople, the press, and even FCC Commissioners.  Was this report edited by our Russian mole?]

I like pictures, so let's jump right to Figures 1 and 2.  The staff says it shows "provided internal connections support for only four to 11 percent of ... schools participating in the program each year...[and] no more than three percent each year of public library locations."  I say it shows that spending roughly $1 billion/year on Priority 2 met the needs of only 4-11% of schools and 1-3% of libraries per year.  Now we're going to try to meet the needs of 20% of schools and libraries with $1 billion.  Oh that's right, we're not going to try to meet anyone's needs, unless that need is less than $150/student or $2.30/sq.ft.

"In February 2014, USAC determined that, for the first time, there was insufficient E-rate funding to fully support any internal connections requests...."  Even I'm tired of this rant.

On to Figure 4.  It looks like a good justification for the $150/student number, since it looks like $150/student is the median request.  Some problems:
  1. I think this includes libraries.  Library applications have student counts in Block 4, so you can do a per-student analysis, but it really throws things off, since library requests are much smaller than school requests.
  2. More than half of applicants are over the $150/student limit.  That means $150/student would not have met the needs of most applicants.
  3. The idea of the ConnectED is to bring Wi-Fi to 99% of students.  That means better (more expensive) networks.  The amount of money that 90% applicants found sufficient to maintain networks in 2012 is not sufficient to upgrade networks at schools that have been making do for years.
  4. Those applicants could get P2 funding twice every 5 years.  So if $150 was the median need in one year, the median needed over 5 years would be $300.
What the data actually show is that the per-student cap for five years needs to be well over $300.

Figure 5: Wait, what?  How were the deciles divided?  The most profligate decile is about a seventeenth the size of the most miserly decile.  Even the two most spendthrift deciles have less than half the number of students in the stingiest decile. The top "decile" is just a few outliers.  Calling these divisions "deciles" is extremely misleading.  It's like doing an analysis based on household size, and dividing it into "deciles" starting with 0 kids and ending with 9 kids, obscuring the fact that over 30 million households would be in each of the 2 lowest "deciles," while less than 2 million would be in the 3 highest "deciles" combined.

"Under the new approach, 'schools in districts that seek category two funding during funding years 2015 or 2016 will be eligible to request E-rate discounts on purchases of up to $150 (pre-discount) per student for category two services over a five-year period.'"  Yeah, not exactly.  Applicants who apply in those 2 years will be limited to $150/student over 5 years, but under current rules, there will be no C2 funding past FY2016.  So while I earlier christened this the "$150-in-5" Rule, it would be more accurate to call it the "$150-in-5-but-you-better-spend-it-all-in-the-first-2" Rule.  By my analysis, the funding currently committed will not be enough to fund applicants with discounts of 81% or less.

Figure 5 shows that by giving applicants less than half what they need (see my comments on Figure 4 above), we can serve more than twice as many students.  Algebraically, that would be:

Hey, make it $25/student, and with the $2 billion we already have, we'll be able to cover all the school districts and those few libraries willing to put up with CIPA and the paperwork.

"funding category two requests for all schools and libraries nationwide will require approximately $1 billion per year over each of the next five years."  Not quite.  If certain assumptions turn out to be correct, funding C2 requests at $150/student may require about $5 billion.  Spreading it over 5 years is not required.  And spreading it over 5 years when you only have 2 years of funding is irresponsible.

I guess modernization ≠ improvement.

Tuesday, August 12, 2014

Let's do the time warp

Here's a sentence from the 7R&O (paragraphs 203-204) that has me thinking about slingshotting around the sun:
"...after a commitment of funding, an applicant’s receipt of services consistent with the offer and with the applicant’s request for E-rate support will also constitute evidence of the existence of a sufficient offer and acceptance."

So in April when PIA requests the contract, all I have to do is give them proof that I have received service in the future (after commitment).

Why is a contract required?  I mean, isn't the inclusion of the terms of an offer on a federal form at least as good as an email saying we accept your offer?

But really, why is a contract required?  What negative consequences would there be from allowing applicants to file without a contract?  I'm pretty good at imagining potential negative consequences, and I can't think of any.

And let's not forget, those contracts are illegal.  Can an illegal contract be legally binding?  And to be clear, an email accepting an offer would also be illegal.

I'm not a lawyer, so I may just may not be mentally limber enough to follow the contortions involved, but what do these two paragraphs change?  I no longer need a "written contract" as long as I have a "legally binding agreement."  Wait, what is a contract?  I guess the exact definition varies state by state, but let's look at some general ones.  Cornell Law School's online legal dictionary defines it as "An agreement creating obligations enforceable by law."  The FAR (Federal Acquisition Regulations) defines it as " a mutually binding legal relationship."  "Contract" and "legally binding agreement" are the same thing.

The difference must be that word "written."  But the order says, "A verbal offer and/or acceptance will not be considered evidence of the existence of a legally binding agreement."  The FCC is saying you need a written offer and a written acceptance.  That is both written and a contract.

So the FCC is saying you don't need a written contract, as long as you can provide a contract that is written.

Or prove that you have received service in the future.

Thursday, August 07, 2014

Perversity is always ready to consort with human nature

I wonder if we can get some clarification on a misconception that the 7R&O "cleared up" in Paragraph 179.  The FCC "reminded" applicants that consortia can choose a range of service providers to meet applicant needs.

How does that work?  Let's say I've got a consortium with 100 members, all looking for 100 Mbps.  I post a 470, and 3 vendors respond.  The first says, "I can supply all 100 members for $1200/month each."  The second says, "I can supply Internet to 50 members for $1100/month each."  The third says, "I can supply 90 members for $1300/month."  (Let's assume that they are all of equal quality, so price is all that matters.)  [There were a few other potential bidders, but they could only serve 20 or so members, so they figured it wasn't worth bidding.]

Now what?  Well, I guess I give the second vendor a contract for the 50 members it can cover.  But now the first vendor says, "Wait, you gave away the 50 easiest sites, the remaining 50 members are further from the existing cable plant, so I have to charge $1,400/month each."  Now vendor 3 looks good, but can only serve 40 of the remaining members, so for the last 10, I have to go with vendor 1.  Total cost? $121,000.  That's $1,000 more than if we'd just awarded the whole shebang to vendor 1.  What should the applicant do?  Am I even allowed to accept the new pricing from vendor 1, since the bid period was over when I changed the size of the project?  Once I award the 50-member contract to vendor 2, should I post a new 470 for the remaining 50 sites?

If I award it all to vendor 1, how are those 50 members going to feel when they find out they would have paid less if you'd split the award.  But if the award is split, those last 10 members will be paying $200 more per month.

Let's say my consortium was wise enough to know that only one vendor could supply all members, and divided up the bid to allow more vendors to compete.  Remind me again, how are consortia supposed to decrease pricing?  By aggregating demand.  My consortium is disaggregating demand.

I'll restate my position on bulk purchasing: sometimes purchasing as a consortium lowers prices, but sometimes it increases prices.  The FCC should do nothing to either encourage or discourage consortia.

Wednesday, August 06, 2014

Toiling in Obscurity

The draft of the new Eligible Services List is out!  Let's see what's changed.

Everything.  It's nothing like the old ESL.  It's more like a summary of the ESL.  Oh dear, is this another case where the FCC claims to be "simplifying" the rules, but is in fact obscuring them?  Let me meander through before I answer that.

There's a 7-page intro to the 5-page ESL.  That doesn't bode well.  All the information we need should be in the ESL, not in some press release that most applicants will never see.

"Streamlining the list of supported services" is delightfully orwellian.  It makes it sound like they're simplifying the program, when in fact they are cutting everyone's funding.  Later they do cop to eliminating "outdated, legacy, and other services that do not provide broadband," but even that's spun pretty hard; they could have eliminated the words "outdated, legacy and other" from that sentence.  Outdatitude and legacity have nothing to do with it: they're eliminated all services that do not provide broadband.  Direct inward dialing is not outdated.  Text messaging is not a legacy service.  The E-Rate is now only funding broadband.

Looks like they kept maintenance.  Damn.  That should have been the first thing to go.

Category 2 is only for LAN/WLAN components.  Fine; servers were a cost-allocation nightmare, and I'm sure phone systems were a thorn in the side of the telecom carriers.  Wait, gateways and antennas are gone?  While I can't think of anyone selling a separate device called a "gateway" any more, the functionality (conversion of one protocol and/or physical medium to another in order to provide continuity of data flow) is certainly eligible.  But without antennas, there is no Wi-Fi.  Granted, many access points have bundled antennas, but not all: here's an example of some antennas that had better be eligible if applicants want to use the Cisco Aironet 1260 Series, 1600e Series, 2600e, 3500e Series, 3600e Series, or 1550 Series, since "These access points require the use of external antennas to make them fully functioning units."

It's good that installation can be purchased separately from equipment.  Wait, did I just fully support a change?  Rats!

They merged digital transmission and Internet access.  Good!  Oh, wait: "Applicants are still required to identify the category one service type on the FCC Form 471."  So with no guidance from the ESL, applicants have to figure out which of their services are telecom and which are Internet.  A great example of thinking that a change simplifies the program, when in fact it merely obscures the complexity of the program.

And here's another example.  The FCC has removed the "helpful" list of ineligible services because the list doesn't look "simple."  "Also, rather than examining long lists of ineligible services, it will be more efficient for applicants to assume that any service or component not listed in the ESL is ineligible for E-rate support." If a list of ineligible services is inefficient, why is it efficient to provide a mashup of some of the eligible data transport protocols, devices, signaling, handoffs and physical media?   Let's see how I can match up my Comcast Business Class bill with the ESL.  I guess "Internet service" on my bill is the same as "Internet access" on the ESL, but there's no mention on my bill of any of the protocols or physical media on the ESL.  Is my Internet service eligible?  Oh wait, over here under "Additional Digital Voice Services" there is a $5 charge for "Cable Modem Lease."  Since "Cable modem" is on the list, I guess that's eligible, but does that mean the whole service is eligible?  And I have my computer connected to the service by an Ethernet cable; does that make the service eligible?

Wait, "any service or component not listed in the ESL is ineligible for E-rate support"?  Does that mean because the FCC didn't list MPLS, it isn't eligible?  Or is it eligible if it has an Ethernet handoff?  What about free-space optical?  Does that come under wireless?

"The proposed ESL removes descriptions of E-rate program requirements that may be related to eligibility but do not directly name or describe the services that are eligible, and descriptions that provide extra information pertaining to certain services."  More simplification by obfuscation.  Yeah, all those rules were overwhelming and confusing.  But removing them doesn't make them less overwhelming and confusing.  It just means that in addition to being overwhelming and confusing, they're also hard to find.

"The proposed ESL also removes the 'Special Eligibility Conditions' section of the ESL because the requirements therein are already explained in the Commission’s rules or in Commission or Bureau orders and USAC provides information about these requirements on its website."  I'm having trouble expressing my opinion without vulgarity.  Last time I looked, there were 781 pages on the USAC Web site and 200 FCC orders, and that was 2008.  And don't forget the rules to be found in USAC PowerPoint slides.  It is incredibly irresponsible to believe that just because a rule exists somewhere, applicants will be able to find it.

Moving the glossary out of the ESL again obscures rather than simplifies.  Only people who worked as WAN engineers in the 1990s can be expected to know that Switched Multimegabit Data Service refers to a particular protocol, not just a concept (MPLS and Frame Relay, for example, are both switched, multimegabit data services, but neither is SMDS).  And even those aging engineers might not recognize "Switched Multimedia Data Service," since they always just called it SMDS.

OK, on to the list.

The DTS/Internet list is, as I mentioned, a strange mix of protocols, handoffs, physical media, etc.
  • ATM, frame relay and Broadband over Power Lines could probably all come off the list. Back in FY 2011, they had a combined total of 220 FRNs for $5.3 million.  Since then, those numbers have certainly gone down.  And while ATM can top 100 Mbps, I don't think you can get there with the other two, so they don't serve the goal of the program.
  • "Integrated Services Digital Network"?  Really?  In my experience, ISDN is like ISTE or AFS: at some point in the past, the letters stood for something, but not any more.  Also, ISDN comes in two flavors: BRI and PRI.  PRI is only used for voice, and BRI is 0.128 Mbps, so it's not broadband.
  • You want to get rid of an outdated service?  Take "Switched Multimegabit Data Service" off the list.  So 1990s.
  • You know T-1 and DS-1 circuits are 1.5 Mbps, right?  They do not provide "broadband" unless bonded.  And there is no way you can use them to get to 100 Mbps, which is the purpose of this program now, right?  
  • Fractional T-1 circuits are not broadband.  They do not get us closer to ubiquitous 100 Mbps.
  • Telephone dial-up?  This service is more outdated and legacy than any of the services they tossed, and it's not broadband. While I would love to see someone try to bond 1800 dial-up connections to create a 100 Mbps connection, it's hard to see how paying for 1800 POTS lines is cost-effective.  Also, putting "telephone" in there is going to make applicants stretch to fit POTS lines.
  • Say, when my fax machines send a fax, they are using a POTS line the same way a dial-up modem uses it, so can I keep my fax lines eligible?
  • Hey!  The wireless Internet access entry includes info about eligibility limitations.  I thought lists of that kind of information were inefficient, and should be hidden in the name of simplicity.  
  • Cost-allocating cell phone use made the IRS throw up their hands.  Up until now, I've considered it hyperbole when people said that PIA was worse than an IRS audit, but now the FCC really is going for nitpicking preeminence.
  • Where is MPLS? FSO? Hot air balloons?
Voice services
  • "Circuit capacity dedicated to providing voice service" leads to cost allocation hell.  I have to figure out what portion of my broadband connection is used for voice?  I've advocated tossing voice, including VoIP, but this goes too far.  Taking the broader view, why is it that the E-Rate will pay for broadband to allow students to watch Nyan Cat videos, but not to dial 911?  OK, it wouldn't be technology-neutral to fund the last mile for VoIP but not analog, but since even CLECs turn their noses up at POTS lines these days, no one cares about being fair to analog voice.  "Circuits dedicated to providing voice service" would be an OK way to toss PRIs and T-1 lines that VoIP providers install.
  • "Excluding ... text messaging."  Why?  The savings from removing the charges is tiny compared to applicants' administrative cost to remove those charges and USAC's administrative cost to verify the removal.
  • ISDN should be on this list.  I would also clearly state "PRI" here.
C1 limitations
  • If an IRU is considered a dark fiber lease, what kind of upfront charges could there be?  It can't be for build-out, right?  Because construction costs are not allowed on dark fiber leases.  What else could large upfront charges be for?
  • An IRU is not a purchase agreement.  You can add a buyout clause to a contract that contains an IRU, but an IRU is by definition not a purchase.  Think about it: why would I need to pay for a Right to Use (regardless of degree of defatigability) if I own the fiber?
  • You know what we should do for fiber instead of getting into the weeds on which pieces of fiber are eligible and which aren't depending on whether its lit, dark or IRU?  Say this: "Any applicant seeking a dark fiber lease must also request and consider lit fiber proposals."  Because, really, if it's cheaper to build a new dark fiber WAN than to lease a lit one, shouldn't we fund self-provisioning of dark fiber?  Oh wait, then we'd be pulling dark fiber all over Alaska.  That needs more thinking.
  • The Internet Access portion has some more ineligible components listed.  I guess having a full list of ineligibles is inefficient, but having several partial lists is efficient.
  • Firewall service is only eligible if it meets the criteria for Ancillary Use.  We have a term for services that are only allowed if they're ancillary; we call those services "ineligible."  Firewall service is an ineligible service.  Add firewall, DNS and DHCP to that (inefficient) list of ineligible items, and then let them come in if ancillary.
  • Managed internal broadband: So if a cell phone provider sets up a microcell in a school building, is that ineligible?  Where is the line between C1 wireless broadband and and C2 wireless broadband?
Category Two
  • If "equipment ... necessary to bring broadband into ... schools and libraries" is eligible, why isn't modulating equipment for dark fiber WANs eligible?
  • Client Access Licenses are not software.  In the case of LANs, CALs are generally just a way of throttling how many devices can connect, and don't involve any software.
  • If voice traffic goes through my router or switch or access point or firewall, do I have to cost allocate?  If I don't have voice on my data network, but later move to VoIP and my voice starts going through them, do I have to retroactively cost-allocate?
Managed Internet Broadband Services:
  • Clearly, the Commission liked the idea of Wi-Fi as a Service (WaaS).  And it's not a bad option for applicants.  But I wouldn't sign more than a 2-year contract, since we only have 2 years of C2 funding.
  • Interesting that an applicant can get funding for a service provider to monitor its LAN if it's "Managed Internal Broadband," but if exactly the same service is called "Basic Maintenance," it's not eligible for funding.  With the managed service, can get back to paying service providers for maintenance whether they do any maintenance or not.  "Managed Internet Broadband Services" (MIBS) will completely replace "Basic maintenance" (BMIC).
  • Generally, WaaS contracts include hardware replacement coverage.  The BMIC section still excludes "unbundled warranties."  That used to mean hardware replacement support contracts, but maybe that's changed; we'll have to search the USAC website for the meaning of "unbundled warranties," and hope that the FCC agrees with whatever we find there.  Another advantage of MIBS over BMIC.
  • Why aren't universal service administration fees eligible, anyway?  It's not a service that you can opt out of.  I think the separate charge is an unsavory practice, but rather than punish the victims of the fee, the Commission should contact whichever branch of government is in charge of regulating what can go on a phone bill. (Hint: they'll be able to use 4-digit dialing.)
Have the eligibility rules gotten simpler?  No. The removal of everything but LAN electronics simplified C2 rules a little, but this "Managed Internet Broadband Service" is a complexity explosion.  The C1 rules are more complicated because of the addition of a third category service: applicants now have to separate out Voice from the old Telecom Services and Internet Access categories.  The eligibility rules are more complicated.

As I feared, the brevity of the new ESL is just the Commission trying to hide the complexity of this program.  If they want to release this 5-page thing as an ESL Summary, fine.  But don't try to "simplify" the rules by burying them in some hidden corner of the USAC site, where the FCC can consider them rules when it suits them, or say that they're not rules if it's inconvenient.

The ESL should be at least 100 pages long.  Because that's how complex the rules are.

Monday, August 04, 2014

Hidden dragon?

Hmm ... what are the "Other Rules Changes" in paragraph 182 of the 7R&O?  Oh, it's only one change, adding a definition for "consortium," and the FCC says, "This change does not alter requirements for applicants and service providers."  On to the next paragraph, right?

Let's take a look at the definition.  It's at the top of page 123.  It says, "Eligible schools and libraries may not join consortia with ineligible private sector members unless the pre-discount prices of any services that such consortium receives are generally tariffed rates."  Say what?

Right away I'm thinking about a consortium I worked with that included some non-profits, which was a pain in the allocation, because I had to calculate what proportion of services they were using and remove it from the 471 FRN and the BEAR.  That consortium is apparently no longer eligible for E-Rate funding.  Then I thought how many large networks include private universities.  I did some checking on a few statewide networks.  I seems the Alabama Supercomputer Authority, the Utah Education Network and CENIC all include private colleges and universities.  So I guess those consortia are no longer eligible for E-Rate funding.  Then I got thinking about all those Catholic dioceses that include a college or university.

Well, that doesn't seem to be encouraging consortium purchasing.