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Monday, November 17, 2014

The $1.5 billion is official-ish

A little more information on the $1.5 billion increase in the E-Rate.  The FCC notice says that a proposed draft is being circulated to the Commissioners.

There is a staff report full of numbers based on the CoSN and SHLB reports, but I don't have time to crawl into those numbers just now.  The bottom line number seems to be increasing the USF charge by $2/line/year to fund it.

The press release seems to be just rehashing the info from earlier reports and anecdotes, so I'm only going to scan the graphs, because I like my data in pictures.

Well, the graphs at the top of page 4 caught my eye.

  • I would love to see the data behind the graph on the left, because it absolutely does not agree with my experience.  I'd like to see how they define "Affluent" and "Low income."
  • The graph on the right shows how fast bandwidth demand is increase, which is what it's meant to show.  What is also shows, which the FCC did not intend it to, is that the Avery County School District, with an enrollment of 2,266, had, as of May 2013, a peak bandwidth need of less than 120 Mbps.  Even with the same fast growth on the chart, they wouldn't be up to 150 Mbps yet.  But the FCC says they need at least 200 Mbps to serve those 2,000 students, and they should have over 2 Gbps.  The artificial goal set by the President based on some numbers made up by SETDA will result in capacity being over 13 times greater than needed.
I look at the graph on page 5, and it strengthens my feeling that we're actually going to see a $1 billion increase in the fund.

But take a look at that graph on page 5.  It says we're going to $3.5 billion in FY 2015.  Really?  If they're going to completely change the funding landscape, I hope they do it at least 28 days before the window opens.

And faster than a speeding bullet, Commissioner Pai has voiced his displeasure.


  1. And Commissioner O'Rielly has released a statement on the plan:

    What's his position? Here's a hint: he called it a "spending spree."

    It's also oddly worded. He keeps says "the FCC did this" and "the FCC will do that." It seems a strange way to put it, since he's 20% of the FCC. Not that he has any good choices; he certainly doesn't want to use "we," but he can't use "they." Actually, I give Commissioner O'Rielly kudos for not being partisan, because the obvious thing to do would have been to say "the Democratic Commissioners did this" and then use "they." Both he and Commissioner Pai avoided getting that overtly partisan, which I applaud.

  2. Commissioner O'Rielly also closed his speech to the Chamber of Commerce ( with a warning that the new proposal was going to be costly to businesses.

    The Commissioner implied businesses would "pay at least 16 percent more for communications services." That's a gross exaggeration, since the increased fee only applies to part of telecom bills. Let's take a look at what it will really mean. To do so, I am going to unscientifically pick three bills that are handy.

    The first is a bill for bundled Internet/VoIP and a 100 Mbps WAN link. The service charges are $4,800/month. The USF fee is $38.54. If the contribution climbs 17.2% (Pai's number), that will mean an increase in cost of $6.64/month. That's an increase of 0.14% in the total cost of that bill.

    The second is a cell phone bill for 8 lines (some of them with data plans). The total cost is $775.70, and the USF charge is $20.42. The increase would be $3.51/month, or 0.45%.

    And here's a bill for 22 phone lines and a couple of analog circuits totalling $751.40. The USF charges are $42.68. The increase cost would be $7.34, or 0.98%.

    So based on my bogusly small sample, it looks like the increase in telecom costs will be between 0.5% and 1%. Not 16%.