Bonanza!

Once again, I am Chicken Little.  Back in May when the FCC decided to use the entire $1.6 billion surplus for FY 2015-2016, I predicted that the fund would get whipsawed in FY 2016-2017, as demand rose and the rollover shrunk.  Now it looks like I was wrong.

Yesterday, USAC told the FCC that it will have $1.9 billion in unused funds available to carry forward into FY 2016-2017.  Wow! An even bigger rollover than last year.

What does this mean for applicants?  It means that the fund will have $5.8 billion available for FY 2016-2017.  Even I think it's extremely unlikely that demand will exceed that number, so that means that once again, everyone will get C2 funding.

But you know I'm not going to make it all the way through a blog post without finding a little rain cloud where everyone else just sees sun.

Where did that huge carryover come from?  I don't know, but I guess part of it is the extra $2 billion that the Chairman identified back in March 2014.  He promised an extra $1 billion/year for 2 years.  So looking ahead to FY 2017-2018, the rollover might be much smaller.  And one of the reasons that demand has not been higher is that most school districts had upgraded their Wi-Fi networks for the PARCC and SBAC tests in FY 2014-2015.  Assuming a 3-year replacement cycle, 2017-2018 could see a surge in demand.  Surge in demand, drop in funding.

And looking further out on the horizon, there is a big black storm cloud, but it probably won't hit us: ADA.  The Chairman didn't say where the extra $1 billion was coming from, other than some mention of "better accounting practices," which I took to mean leveraging the fund.  That's great and efficient all, but it's not the way government operates.  The Anti-Deficiency Act says that the government can't commit to spend money that it doesn't have.  Government is not allowed to leverage.  Except the USF has an exemption from the ADA, and the Universal Service Antideficiency Temporary Suspension Act keeps getting extended, so all is well.  And the current extension doesn't run out until...[sound of record scratching]

The current ADA exemption runs out in 9 days.

Not to worry, the House is on the job, and has included an extension until 2020 in H.R.2583, which has been passed by the House and sent over to the Senate, where it's been read and referred to committee.  But H.R.3675, a pretty identical bill, got that far last year before dying in committee.

I'm not a legislative expert, so I feel like I've missed something.  Anybody know how we're going to avoid the program grinding to a halt in 9 days?

Or should it be spelled E-Moji?

Nick Shipley over at Funds for Learning is a genius.  Why?  Well, not only has he noted the unbelievable Form 470 2,000-word-lockout, but he has proposed a solution that is both ingenious and hilarious: emojis.

You should visit his blog post to see his proposed emojis.  Of course, I am inspired to add my own:

	Self-provisioned fiber
	Filing window
	Funding wave
	Form 470
	Form 471
	Form 486
	Form 472
	Form 474
	Entity
	Billed entity
	Organization
	Consultant
	Good Samaritan
	USAC
	PIA review
	Selective Review
	Cost-effectiveness review
	Audit
	Code 9
	the change applicants expected when they heard the fund had grown to $3.9 billion
	the change that applicants have actually experienced
	the change that applicants will continue to experience
	hraunfoss
	COMAD
	Data Retrieval Tool
/	Free/reduced lunch
/	Urban/rural
	Wi-Fi
&	M&C
	Axillary use (you try finding an emoji for "ancillary")
	ADA
	EPC (OK, it's not an emoji, but the E-Rate portal is every bit as difficult to navigate; now if only EPC had a humorous computer mastermind)

And here are some terms I haven't developed emojis for yet:

	Category 1
	Category 2
	WFA
	NIF
	$150-in-5
	2-in-5
	Tennessee test
	Item 21 Attachment
	Basic conduit Internet access
	Document retention
	Invoice deadline extension
	Recovery of Improperly Disbursed Funds
	Operational SPIN change
	FCC
	Service substitution
	State master contract
	Red Light status
	Remand
	CSB
	FRN
	SPIN
	Block 1
	Block 3
	Block 4
	Block 5
	Block 6
	CIPA
	Duplicative services
	ESL
	Allowable contract date
	Internal connections

Pixels are the new pink

What's got my dudgeon up today?  Envelopes.

This week's BEAR Notification Letters showed up in half-page-sized envelopes which had transparent windows taking up almost the whole front.  No complaints, there, really.  The postage franking had to be on the back of the envelope, since the paper frame around the window on the front was too narrow to accommodate the postage meter's stamp.  But that's no skin off my nose.

Meanwhile, 486 Notification Letters showed up in big 9"x12" envelopes, with largish transparent windows.  The flat mailing is nicer for us, since we don't have to unfold the letters, avoiding my folding complaints of the past.  But an envelope that's over 6.125" tall costs an extra $0.49 to mail (maybe more if you count the extra weight from the larger envelope).

The large windows make it easier to see color of the paper, which is good, but I've been begging for USAC to bring back colored envelopes since they did away with them in 2006.  Of course, BEAR notifications have always been white, so colored envelopes are out of the question.

You know what I'm thinking?  If applicants have to retain documents for 10 years, shouldn't they're be a 10-color cycle?  And how about pastel colors for C1, and neon versions of the same color for C2?

For those who are curious, here is the cycle of colors:

Year (old style)	FY	Dates for Recurring Services	Color
Year 1	FY 1998	1/1/98 - 6/30/99	White
Year 2	FY 1999	7/1/99 - 6/30/00	White
Year 3	FY 2000	7/1/00 - 6/30/01	Yellow
Year 4	FY 2001	7/1/01 - 6/30/02	Pink
Year 5	FY 2002	7/1/02 - 6/30/03	Blue
Year 6	FY 2003	7/1/03 - 6/30/04	Yellow
Year 7	FY 2004	7/1/04 - 6/30/05	Pink
Year 8	FY 2005	7/1/05 - 6/30/06	Blue
Year 9	FY 2006	7/1/06 - 6/30/07	Yellow
Year 10	FY 2007	7/1/07 - 6/30/08	Pink
Year 11	FY 2008	7/1/08 - 6/30/08	Blue
Year 12	FY 2009	7/1/09 - 6/30/10	Yellow
Year 13	FY 2010	7/1/10 - 6/30/11	Pink
Year 14	FY 2011	7/1/11 - 6/30/12	Blue
Year 15	FY 2012	7/1/12 - 6/30/13	Yellow
Year 16	FY 2013	7/1/13 - 6/30/14	Pink
Year 17	FY 2014	7/1/14 - 6/30/15	Blue
Year 18	FY 2015	7/1/15 - 6/30/16	Yellow
Year 19	FY 2016	7/1/16 - 6/30/17	Pink

Will we ever see pink notifications again?  USAC's EPC goal is to do away with paper.  Will electronic RNL and RAL messages for FY 2016 have pink backgrounds?  I'm betting no.  I was happy to be getting rid of paper, but suddenly, I'm feeling nostalgic.

C2 Budget Anschluss

This week's headache?  "Annex."  The latest USAC News Brief includes a new type of entity: the Annex.  In the past, I have whined about the peculiar status of single schools with multiple locations. Having to create a separate BEN for those locations was unnecessary and an added complication.  Apparently someone at USAC agreed that it was unnecessary, but felt the complication was insufficient, so now we have even more complication.  Now we get another type of entity.

At this point, USAC should abandon "entity" and just adopt the term "thingy," because an annex doesn't get a BEN, and does not exist separately from the main school location, so it's not really an "entity."

I'm all for clarity, but this new thingy does not clear things up.

Let's say my little private school bought the house across the street, and put an art studio on the first floor, where all the kids go to art, and a music room on the second floor, where some kids go for band practice.  Last year, it was an entity, with its own BEN.  This year, the main location does an Anschluss, and it's an annex.  What if they get tired of moving kids across the street, and put the development office into the art studio?  Is it still an annex?  Some kids do go in there during the day.  The development office gets tired of the screeching violins, and the band practice gets moved across the street.  Can it stay an annex?  What if the band practices there, but only after school? The description of annex that we got in the News Brief does not mention a classroom requirement, so maybe it still qualifies as an annex.  Of course, it also qualifies as a NIF, so that's probably what you have to make it, which means you need a BEN for that thingy.  Why?  What is the difference in how a NIF is treated versus how an annex is treated?  It boils down to this: if you want to get some C2 funding for an annex, go ahead, but if it's a NIF, you can only get C2 funding if the C2 gear serves the school across the street.

(Side NIF rant.  What is a NIF?  Here's the definition (from this page): "School NIFs are school buildings or buildings on school property that generally don't contain classrooms...."  Then the next sentence says, "...school NIFs that contain classrooms do not have Category Two budgets."  A NIF with classrooms?  That is a building that doesn't contain classrooms that contains classrooms.

But it simplifies the application process right?  Not so much.  The News Brief says I don't have to get a BEN for the annex.  Yeah, except I already have a BEN for it, because last year we needed one.  And this year, I have to create a new thingy with the same information that is in the existing BEN.  And when I import last year's Block 4, I'll have to go back in and yank out the BEN, because now that thingy is an annex, so it doesn't get listed separately.  So it's just more work for me this year.

And then comes PIA.  Since I'm creating a new thingy that is actually a thingy from last year, PIA is going to have to somehow associate the two thingies (which are actually one thingy, but have to be treated as two thingies now), in case I spent some C2 budget on the thingy back when it had its own BEN.  Annexes can't have C2 budgets, so any C2 funding I got for the thingy when it had a BEN can't be transferred to the annex.  (Wait, would it be a transfer, since we're talking about the same thingy?  Oh, my aching head.)  Somehow USAC is going to have to kludge the former-BEN-now-annex's C2 funding into the main location's BEN's C2 budget.

At first, I felt a little schadenfreude glee that the C2 budget for a BEN-become-annex will be a bigger headache for USAC than for me.  But based on past experience, I expect that the kludge will not exist when PIA reviews start, delaying my clients' applications, and when the procedure for shoehorning a BEN-become-annex's C2 funding into a main location's budget will require a lot of extra work for me.

And why?  Now that we have district-wide discounts, the only reason to list thingies in the "Discount Calculation" section of the 471 (née Block 4) is so that C2 funding can be allocated to those thingies that have C2 budgets.  It would really simplify the program if we had C2 budgets that were district-wide (or private-school-wide or library-system-wide).  (I would call for "organization-wide" C2 budgets, but alas, USAC is now using "organization" as a euphemism for "entity," so "organization-wide" could mean "district-wide" or "school-wide" or "campus-wide" or "bookmobile-wide.")   Location-specific budgets are a bad idea.  Attach C2 budgets to FEINs, and we no longer need NIFs, annexes, C2 cost-allocations, etc., etc., etc.

Yes, having BENs for annexes was an unnecessary complication, but as usual, the reaction is not to remove the complication, but to create a whole new set of rules.

An entity by any other name smells as sour

Time for the annual running of the entities.  Once again, USAC's News Brief tries to clarify the muddled meaning of "entity."  I've been griping about this at least since 2007: instead of trying to draw an inconsistent distinction between "billed entity" and "entity," start using "organization" and "location."

And when I log into EPC: happiness!  Right there at the top: "Organizations."  Yes!  Now please tell me that they consistently separated "organization" from "location."  No, alas, they just sometimes substitute the word "organization" for "entity."  So if you want to search for a school, you have to go to "Records" then click on "Applicant Entities."  At least you can filter by entity type to see only schools (unfortunately, while "school" means "location" for districts, for private schools, it might mean organization, location or both).

A worse sin: if you open the record for a school, right at the top, it says "Organization."   No!  Likewise, if you bring up a school district's record, then click on "Related Entities," you get a list of schools under the heading "Organizations."  When USAC used the vague term "entity," they could apply it to anything, but a school is not an organization.  It's a location.

So instead of clarifying things, they've just started using "organization" as an occasional euphemism for "entity."  Just look at the "Applicant Entities" page: you can filter by "Organization status" or by "Entity type."  Could you at least be consistent on two headings that are right next to each other?

Ugh.  So the situation is even worse.  Instead of a distinction between organizations and locations, we just get another word for "entity."  And I have to think that it's too late to overhaul EPC, so the muddle will just go on.

The News Brief makes clear that if your school district's main location is an administrative building (NIF), then you need to have a BEN for both the district and the admin building.  Two BENs, one address.  Hey, that's good: USAC is finally trying to make a distinction between the organization and the location where it's headquartered.  And for school districts with no separate admin building, the distinction has always been there: if the district office was located in the high school, there were separate BENs for the district and the high school.  The distinction even existed for one-building districts, though I see a lot of them mistakenly using the school's BEN in Block 1, where the district's BEN should go, or the district's BEN in Block 4, where the school's BEN should go.

But libraries and private schools are not treated the same.  A single-location library or private school has only one BEN, so it is used for both organization and location.  And in the case of libraries with more than one branch and private schools with more than one campus, the main location's BEN is used as the organization BEN covering all the locations.  Shouldn't USAC be requiring libraries and private schools to get either a new BEN for the organization or a new BEN for the main location?

Alas, the entity mess goes on.

The view from the top

If you're big enough E-Rate geek to read this blog, you've certainly seen Mel Blackwell's Letter to the Field.  I think that, as usual, he strikes a pretty good balance between being positive and being frank.

While he notes that USAC very nearly hits its goal of processing all the "workable" apps by Sept. 24th (well, there was a big batch of FCDLs that came out Sept. 25th, but that's close enough for government work), he does note that 6,000 applications are "unworkable," and expects that most will be processed within 90 days.  "Most" means at least 3,000, so it's possible that close to 3,000 applications will be languishing 90 days from now, which is half-way through the funding year.  And Mel admits that the remaining applications tend to be larger than average.

What is "workable" anyway?  The E-Rate Modernization Order gives us this definition:

“Workable” means that a funding request is filed timely and is complete, with all necessary information, to enable a reviewer to make the appropriate funding decision, and the applicant, provider, and any consultants are not subject to investigation, audit, or other similar reason for delay in a funding decision. Funding requests from applicants that decline to respond to USAC inquiries over the summer may be considered “unworkable” for purposes of this performance goal, though USAC will process these applications as quickly as possible when school staff return for the year. 

Doesn't "...with all necessary information, to enable a reviewer to make the appropriate funding decision..." exclude most applications?  It would seem that if PIA needs to request information from the applicant, the application is unworkable.  Unless they streamline PIA procedures dramatically, most applicants will have to supply additional information to PIA, in part because even though the Form 471 is more detailed than it used to be, it still does not collect all the information that PIA needs.  It seems to me that if the Form 471 doesn't collect the necessary information to allow 6,000 applications to be processed, the form has some serious shortcomings.

But back to the letter.  We get promises about how much better EPC will make our lives, but also acknowledgement that the roll-out has not been flawless.  I particularly appreciate Mel saying, " the accelerated timing of the deployment did not allow for adequate user testing."  I think that more could have been done to bring the applicant and service provider community into planning meetings, but I guess they can't let anyone look behind that curtain, since the FCC considers the application process to be a law enforcement activity whose workings need to be kept secret from the public (and the people going through the process).

But here's some good news: "We are committed to...user testing for the new EPC-based FCC Form 471 filing process."  Where do I sign up?

Worries about an old friend

Has the ax finally fallen, even before the big outage/upgrade?  Has hraunfoss gone the way of the dodo?  If you know what I'm talking about, you are a true E-Rate geek.  If you don't, hraunfoss.fcc.gov is the name of the FCC server that holds (held?) appeal decisions.

Just today I noticed that my links to documents on hraunfoss give me a 404 error (page not found).  I have feared the disappearance of hraunfoss since 2010.  We went through a "transitions.fcc.gov" phase, and a flirtation with "www.fcc.gov/document/...."  Could the reign of hraunfoss finally be over?

One encouraging sign: the FCC links are all broken, too.  Try going to the list of 2011 WCB appeal decisions; it looks like 800some broken links.  It wouldn't be the fist time that hraunfoss had trouble getting started on a Monday.

In the short term, you can get at the documents by editing the URL: take out "http://hraunfoss.fcc.gov" and put in "https://apps.fcc.gov" at the start of the Web address.  Note that you have to put an "s" after "http."  Perhaps that will be hraunfoss' demise: everybody's moving to https, and as long as you're going to have to change every URL....

FCC going dark

Check out this announcement: from Sept. 2nd to Sept. 8th, "most Commission resources normally accessible through the Commission’s web site,including access to all electronic filing systems and electronic dockets, will be inaccessible.... The Commission’s web site will remain available, but with reduced content and limited search capabilities. ... FCC telephones will work but voicemail will not, and most Commission staff will not have access to e-mail."

As a practical matter, not really a big deal, since they're giving automatic extensions of filings due during that time.  And there's always snail mail....

But I'm dismayed: it's going to be a really uphill slog to explain that redundant connections are cost-efficient to an organization that knowingly crashes itself for a whole week.

Who asked for C2?

Oh goody, more numbers from Funds for Learning!  It's a summary of Category 2 (C2) funding utilization.  [OK, first off, no graph?!  C'mon FFL, you know I like my data in pictures.  And I can't even copy and paste the data into a spreadsheet to do my own analysis, since the table is a screenshot.  Really, the presentation could not be more annoying.]

And the data's not as interesting as I had hoped.  I wanted the data sliced and diced by discount level, school size, etc.  Oh well, let's see if I can tease any information out of this paucity of data.

First, the bottom line: The total possible C2 demand is $5.8 billion.  That's in line with earlier calculations.  I wonder if it might not be a little low, as some small applicants who have been scared off by the huge pile of paperwork (and huger pile of rules) may stop in to get their dollop of C2 gravy.

On the whole, applicants requested only 28% of the total possible C2 demand.  So thanks to rollover, the FCC didn't even have to up collections to the new $3.9 billion cap.  I'd like to speculate on what C2 demand will be like next year, but I don't really have any good indicators.  My gut says slightly less demand than this year, but I'm just guessing.

What can we tell about who's getting the money?  Let's see....  What's the total budget/site for each row?  The C2 budget is $126,243.59/site for those who requested their entire budget.  Those are some large, high-discount schools.  If they were all 85% schools, then the average enrollment would be 990 students/school. If they were all 40% schools, the average enrollment would be 2,104 students/school.  NCES says the average school has 517 students.  Only about 10% of schools have more than 900 kids.  Check out this table of average enrollment size taken from an NCES report (page A-5).

Urbanicity	Elementary	Middle	Secondary
Total	424	569	825
Urban	528	528	1,313
Suburban	492	492	1,197
Rural	354	463	577

[OK, first, I love "urbanicity."  It sounds like a word I'd make up.  It's not in Merriam-Webster or the OED, but I like it.  Can we get USAC to use "urbanicity" instead of "urban/rural status?"  Actually, "ruralocity" might be a better made-up word for the E-Rate.]
So we can safely say that there is no way that many rural schools applied for their full discount.  And no way that many 40% schools used up their full budget.

Once you get below that top row, the numbers aren't so stark.  Sites that requested some funding (but not their full budget) had average per-site C2 budgets in the $56,000-$59,000 range, which means that they tend to be larger and/or higher-discount schools, but there could be a significant number of smaller, lower-discount schools. Schools that requested no funding had an average budget of $36,344.77.

So as you'd expect, the schools that stood to get more funding were more likely to apply.

Sometimes the forbear eats you

The FCC has released the Third Quarter Contribution Factor: 17.1%.  I have the 3Q factor from 2014 handy from a previous post, so let's see how things have changed over the last year.

That's a 9% increase in the contribution factor!  What caused the jump?  Let me dump all the data into a spreadsheet and see what happened.

Well, it's not due to a jump in spending.  Total demand is up less than 1% (an 8% decrease over at Low Income compensating for a 4% increase in E-Rate and a 15% increase from Rural Health Care).
The problem is a 6% drop in the contribution base.  People just aren't making enough long distance calls.  I found the Contribution Factor announcement from early 2007 in a previous post, and the contribution base has dropped 20% since then.  It sure does seem like the FCC is going to have to end its forbearance of USF fees for ISPs.

Be still, my beating heart

Want to make your heart skip a beat?  I've got 2 ways to do it, courtesy of USAC.

The first one applies to everyone.  Go to the Data Retrieval Tool, and look up your funding for FY 2007.  Isn't it exciting to get "No Records Found Matching Your Criteria" where your funding should be?  Don't worry, it's not you.  All the data from 2007 is gone.  Where did it go?  No idea.  When did it vanish?  I can say for certain the data has been missing at least since yesterday morning, but that it was there a week earlier.  Does anyone have a "No Records" sighting for 2007 before yesterday?

The second only applies if you submitted (or certified) your application after 8:00 p.m. Eastern time on the last day of the window.  If you did, go to the 471 Display page, put in your 471 number (if you didn't submit late, try using 471 #1051523), then click the "Display" button.  Look at the "Date Submitted" and "Date Certified."  April 17th?!  Out of window?!  Not to panic; the display tool seems to be showing you the date UTC (Coordinated Universal Time (the acronym is a sort of anagram, but at least it's properly capitalized, unlike "E-rate")) instead of Eastern time.  So don't worry; your application is in window.  Probably.  In the old 471 Display page, you would have had "Certified - In Window" at the top of the form to calm you, but now you have to go to the Application Status tool to bring your pulse back to normal.

E-Rate is always a thrill!

Apples to apples to apples to apples

As promised, today we'll look at comparing the cost of fiber leases (lit and dark) to self-provisioning and bandwidth service agreements.

I tried to build a spreadsheet that broke out every conceivable cost.  Under a normal contract, you would probably be leaving the vast majority of them blank, but I think PIA is going to be instructed to ensure that all costs are being considered, so you should be prepared to defend every number in there, especially blanks.  You can see that in my hypotheticals, I didn't fill in every number for every type of service.

How to use my spreadsheet?  Fill in the yellow blanks from amounts in the bids you're considering.  Feel free to leave blanks for amounts not included in the bid.  (The spreadsheet assumes that you've already selected the most cost-effective solution in each category, so there is only space for one Dark, one Lit and one Self-Provisioned.)  You can fill in grey blanks, too; I greyed them out just because I thought it was unlikely that your contract would have those fees, but they're still included in the calculations.

Notice the tab for the BandwidthNeed worksheet.  It's basically yesterday's worksheet, and here serves 2 purposes.  First, the cumulative costs are copied into the Cumulative Cost area of the CostCalculation worksheet, so you can compare to the costs to your leased solutions.

The second purpose of the BandwidthNeed worksheet is to give you a basis for stating future bandwidth needs.  You'll need that to figure out when you'll need to buy new electronics.  If you look at the sample numbers I put in, a 1 Gbps connection is projected to be enough until Year 11.  I rounded it down to Year 10.

The handling of upgrades is a little clunky.  For lit fiber, I assumed that equipment would be leased (or included in the cost of the bandwidth), so it's just a matter of guessing...er..."determining" how much the monthly fee will change.

For dark fiber leases and self-provisioning, I assumed that a bandwidth upgrade would probably mean an equipment purchase.  So over in cell H8, you'll see that I'm anticipating an equipment purchase in Year 10 (120 months into the contract).  There are two rows, so you can put in a second upgrade if you want.

You'll notice that there are 3 terms available.  In the first row of each term, in column F you'll put the length of that term in months.  (Note that if your term is not divisible by 12, there will be an error in the Annual Cost for the year during which the term ends.) Fiber contracts often have 2 terms; the initial term, when you're paying off upfront costs, and subsequent term(s), when you're just paying maintenance.  I added a 3rd term for flexibility.  In the hypothetical contracts I put in, I have an initial term of 5 years, because the hypothetical dark fiber lease has 5 years of higher fees paying off most of the cost of stringing the fiber, then a much lower fee for the next 15 years.  Then I have the second term end 10 years into the contract, where I'm anticipating the upgrade to 10 Gbps will increase the Monthly Cost of the lit fiber lease.  The Monthly Cost of the dark lease and self-provisioned don't change, but you'll notice that the equipment purchase from H8 bumps up the Annual Cost in Year 10.

Some shortcomings of the spreadsheet:

• Only allows 2 equipment upgrades
• Only allows 3 terms
• Doesn't do a present-value calculation 
• Only one contract of each type can be inserted
• It's way more intimidating than I'd like it to be, since most of it will be blank
• Contracts with terms that are not whole years will cause a miscalculation; for example, if your first term is 42 months (3.5 years), the spreadsheet will act as if it were a 48-month (4-year) contract.

Any feedback on the spreadsheets would be welcome.

How about them apples?

Based on the FCC Fiber Build Workshop and USAC service provider training, it's becoming a little clearer what applicants are supposed to do to make the apples-to-apples cost comparison for dark vs. lit fiber.

First, you determine what your term will be.  USAC mentions terms of "5, 7, 10, or even 20 years."  I've seen 40-year IRUs, but 20 years does seem sufficient.  For one thing, the highest speed I could find anyone cramming down current fiber cable is 15.5 terabits/second, and you'll probably need more speed than that before we reach year 30.  Within the next 20 years, you'll want to move to a better fiber optic cable.

Once you've figured out how long the term of your dark contract, you just compare the total cost of a dark fiber (self-provisioned or leased) and compare it to the total cost of leased fiber (or a service agreement for a certain amount of bandwidth).

Simple, right?  Not really.

Let's look at what ought to be the simplest: the 20-year cost of a service agreement.  Just multiply your current monthly cost by 240, right?  Well, that hides two bad assumptions: 1) your bandwidth needs will stay flat for 20 years, and 2) the cost of bandwidth will stay flat for 20 years.  Neither is true.  You could assume that you'll keep your monthly cost flat, and just take whatever bandwidth you could get for that price, but I'll bet that hasn't been true for you in the past.

Not to worry: I am coming to your rescue with a spreadsheet to calculate future costs.  First, to project future bandwidth needs, I just used Nielsen's Law of Internet Bandwidth: bandwidth increases by 50% per year.  (OK, it's based on one guy's residential connection speed, so it's pretty bogus, but it's amazing how often I see it quoted.)  For future costs, I found data showing annual decreases in cost/Mbps between 27% and 35%.  So let's look at the results for 20 years out, assuming you're currently paying $1,000/month for a 100 Mbps circuit:

Bandwidth Increase	Cost/Mb decrease	20-year cost
50%	27%	$649,466.79
50%	35%	$190,709.91

Well, that's quite the stark difference, eh?  That's why your financial adviser is always going on about compound interest.  The bad news for the telcos is that the 27% is probably a more accurate number, since the 35%  number is a based on a small sample and covers backhaul prices, not retail.

My cost-estimation spreadsheet is cooler, though; you just fill in the cells shaded yellow with data from two years from your own network: the current service (or from the best bid) and any year from the past.  The example that's in the network shows a T-1 in the year 2000, which cost $400/month, and the current 100 Mbps Ethernet circuit, which costs $1,000/month.  The spreadsheet annualizes the cost/Mbps decrease (19.67%) and bandwidth increase (32.31%), and then extrapolates those costs over 40 years.  If you go to cell F39, you will see that, based on the past for this school district's network, your total cost for a 20-year service agreement is $455,883.34.

By the way, column B estimates how much bandwidth you'll need each year.

Also, none of those cells are locked, so you can mess with the spreadsheet any way you want.  And if you mess it up irreparably, you can just download a fresh copy.  By the way, the PriceDecrease worksheet shows how I came up with the 27% and 35% annual cost decreases, if you're interested.

I wouldn't bet much on the numbers actually turning out to be right 20 years from now (or 5 years from now), but they are based on real data....

Tomorrow, let's look at the cost of leased fiber.

Not up to the challenge

At yesterday's E-mpa® meeting, John Harrington from Funds for Learning delivered a report that was chock full of data (and more importantly, data delivered in the form of pictures, just the way I like it).  I found this to be the most interesting picture:

The blue column is the number of entities that applied in FY 2014-2015, and applied again in FY 2015-2016.  The red column is entities that didn't apply last year, but did apply this year.  The green column is entities that applied last year, but didn't apply this year.

The most significant bar for me is the green bar for Schools.  Almost 30% of schools that were in the program have left!  I guess it's not really surprising.  If you're a single-building school, you have maybe 10 phone lines, 2 cell phones, a cable modem, and a website.  The phone lines were running you about $3,000/year, the cell phones $720,the cable modem $1,500, and the website $1,200.  Let's say you're able to prove that 1% of your kids are low-income and you got a 40% discount.  Your funding was close to $2,600 last year.  This year?  Maybe $1,300, if you're able to show that most of the cell phone bill was for voice.  Next year?  $600. (Not able to document enough low-income students?  Last year's $1,300 in funding becomes $300 this year.)  If I'm one of those schools, I might drop back into the program one year to collect my $150/student in Category 2 funding, but otherwise, it's not worth my time.

And then there's the data that's not on the graph: according to the US Dept. of Education, there are 30,861 private schools in this country.  So school participation in the E-Rate has dropped from 30% to 22%.

Maybe they're moving into consortia?  Nope, the number of consortia in the program also dropped.  Hey whoa, those slivers are so tiny, they obscure the fact that almost 30% of the consortia that were in the program last year left this year.  So much for encouraging consortia.

Not long ago, the Chairman said: "These reforms will only have their intended impact if schools and libraries step up to take advantage of new opportunities. Early indications are that they are up to the challenge."  I guess 2,596 schools weren't up to the challenge.

Some pig!

Check it out: the FCC is redoing their website.  Here is a prototype.  I like it, though I don't often hit the homepage.

Have a suggestion to improve it?  Send it to WebFeedback@fcc.gov.

Maybe I should start a spamment campaign to bring back hraunfoss.

Eligibility brief

The new proposed Eligible Services List came out last week, but I'm just getting around to reading it today.  I'll give you my reactions as I read though.  (It's sort of like one of those unboxing videos, only more boring.)

Before we open the box, let's just look at the size of it.  4 pages of pre-amble, 8 pages of ESL.  And shaking the box a bit, I see that the ESL rules are rattling around in mostly empty pages. Uh oh, looks like we're stuck with ESL Lite for another year.

The card attached to the box is not bad: the proposed ESL was released on May 21st, with comments due by June 22nd.  A month for comments gives us all a long time to ruminate.  And the early due date for comments means we might get an ESL in the summer.  That's only fair, since at the recent fiber WAN workshop, the FCC wanted applicants to get 470s up in July.

The package has a meager ribbon: In the past, the ESL was always in Docket 02-6.  Somewhere along the way, Docket 09-51 got thrown in.  Last year, they added Docket 13-184, the docket created for the E-Rate modernization NPRM.  This year, we're down to Docket 13-184.  Is Docket 02-6 going the way of the dodo?  Why not a new docket for the proposed ESL each year?  We need to do something to address the E-Rate docket deficiency.  The single docket is good news for paper filers, since it means they only need to send one copy along with the original, not the 5 copies they had to send when 3 dockets were listed.

Oh, dear, I don't like the pattern on the wrapping paper: the small "r" in "E-Rate."  At least the use was consistent.  And again the phrase "more commonly referred to as the E-rate program," when as I've said before, the capital "R" is more common among Congresspeople, the press and FCC Commissioners, and even the Chairman (at least until recently).

First smile comes from a footnote: "...we do not invite requests for reconsideration of the E-rate Modernization Orders as part of this notice seeking comment on the proposed funding year 2016 ESL."  In other words: "Don't tell us you want Web hosting and voice back.  Tell us what you think about the wording and format."

"The proposed ESL adds equipment necessary to make a broadband service functional to the list of eligible costs for leased lit fiber, dark fiber, and self-provisioned broadband networks. This clarification is necessary to fully equalize the treatment of lit and dark fiber and to support self-provisioned broadband networks."  Yes, and combined with the earlier "...applicants must seek competitive bids for network maintenance and operation, and all other eligible services and equipment," it means that dark-fiber companies can't make their bid look cheaper by failing to include the cost of electronics.  A win for the phone companies.

"...the costs for bundled voice and data services provided over a single circuit, must be cost allocated."  That's got me worried.  Am I going to have to make up a number for the miniscule portion of my 100 Mbps circuit that is being used for VoIP, and then apply the lower voice discount to that?  We'll see when I get to the actual ESL.

"...applicants that may be receiving ISDN as bundled voice and data service...."  Nope.  ISDN is a data service.  It's just that no one uses it for anything but voice.  (Is there anyone out there still using 3 BRIs for videoconferencing?  Please tell me no one is using a BRI to dial up the Internet.  And a PRI is just a T-1 set up for voice, so if someone's using it for data, it's just a T-1.)  Also, at least around here, unless the PRI has been there for more than 3 years, when a provider gives an applicant a PRI, it only stays a PRI until it hits the service provider's router in the applicant's building.  It leaves the back end of that router as IP packets.

Hey, look, comments to be filed at http://fjallfoss.fcc.gov/ecfs2/!  Faithful readers will know that I miss those icelandic waterfalls.  Alas, it just forwards you to the real page: http://apps.fcc.gov/ecfs//.  Stupid Web trick: For those of you that miss hraunfoss as much as I do, you can use http://hraunfoss.fcc.gov/ecfs2/.  Svartifoss does not work, so I guess the FCC never took my suggestion to use that name.

"Additional guidance from USAC about the E-rate application process and about eligible services,
including a glossary of terms, is available at USAC’s website at http://www.usac.org/sl/.  The documents on USAC’s website are not incorporated by reference into the ESL and do not bind the Commission.  Thus, they will not be used to determine whether a service or product is eligible."  So you want to know what is meant by "Radio loop" or "Interconnected voice over Internet protocol"?  Go look on USAC's Web site.  But that definition is not binding, so you're really just guessing.

Hey, where is that glossary?  I looked in the Reference Area: nothing.  I searched for the word "glossary" and the only two uses of the word were here and here, with both pages saying the glossary was part of the ESL.  So the ESL says the glossary is on the USAC website, and the USAC website says it's in the ESL.  Beautiful.

OK, let's see which digital transmission services get us to 1) broadband (defined by the FCC as 25 Mbps) and 2) 100 Mbps (the goal set in the E-Rate Modernization Order).

Technology	Top Speed	Broadband	100 Mbps
Asynchronous Transfer Mode (ATM)	10 Gbps	Yes	Yes
Broadband over Power Lines (BPL)	Service not available	?	No
Cable Modem	150 Mbps	Yes	Yes
Digital Subscriber Line (DSL), theoretical Digital Subscriber Line (DSL), actual	100 Mbps 6-50 Mbps	Yes Maybe	Yes No
DS-1 (T-1) DS-3 (T-3) Fractional T-1 Fractional T-3	1.5 Mbps 45 Mbps < 1.5 Mbps < 45 mbps	No Yes No ?	No No No No
Ethernet	10 Gbps	Yes	Yes
ISDN PRI ISDN BRI	1.5 Mbps 128 kbps	No No	No No
Leased Lit Fiber	10 Gbps	Yes	Yes
Dark Fiber	10 Gbps	Yes	Yes
Self-Provisioned Broadband Networks	10 Gbps	Yes	Yes
Frame Relay	45 Mbps	Yes	No
Multi-Protocol Label Switching (MPLS)	10 Gbps	Yes	Yes
OC-1 OC-3 OC-12 OC-n	50 Mbps 150 Mbps 622 Mbps n x 50 Mbps	Yes Yes Yes Yes	No Yes Yes if n>1
Satellite Service, theoretical Satellite Service, actual	1 Gbps 15 Mbps	Yes No	Yes No
Switched Multimegabit Data Service	45 Mbps (if you can travel back to the 1990s)	Yes	No
Telephone dial-up	0.056 Mbps	No	No
Wireless services (e.g., microwave)	1 Gbps	Yes	Yes

So if we tossed voice out of the program, is it time to start tossing digital transmission that doesn't help us get to the goal of the program?  Or at least get rid of circuits that aren't even broadband?

"Applicants may seek special construction funding for the upfront, non-recurring costs of deployment of new or upgraded facilities, including design and engineering, project management, and construction of network facilities."  Does that mean I can get E-Rate funding for the cost of a design firm to write my RFP?  Or is it more like the design of a C2 solution, which has to be done by the installer right before installation?  If the FCC wants top-notch fiber RFPs, they should pay part of the cost to create them.

"The reduced discount rate for voice services will apply to all applicants and all costs for the provision of telephone services and circuit capacity dedicated to providing voice services...."  Hmm....  "Dedicated," eh?  Well, you can't really "dedicate" a portion of a circuit in a packet-switched network, so I guess this only applies to dedicated circuits.  That's OK.

"Firewall protection that is provided by a vendor other than the Internet access provider or priced out separately will be considered a Category Two internal connections component." By the people who brought you the On-Premise Priority One Equipment morass, it's the brand-new "Off-Premise Category Two Service," coming soon to an ESL near you.  I guess we already had O-PCTS with cloud-based WLAN controllers.  I dislike loopholes, but I have to say that O-PCTS is a better idea than O-PPOE, because no one's trying to cram things into C2.

"Access points...such as wireless access points."  That implies that there are access points that aren't wireless.  If such a device were not wireless, it would be called a "hub."

Hey, UPS is just listed as eligible.  There is absolutely nothing in the ESL which says a UPS is only eligible if supports eligible equipment.  So go ahead and plug your ineligible servers into that E-Rated UPS.

"A manufacturer’s multi-year warranty for a period up to three years that is provided as an integral part of an eligible component, without a separately identifiable cost, may be included in the cost of the component."  That means that if the warranty is longer than 3 years, it may not be included in the cost of the component.  So now I've got to make up some cost for the lifetime hardware warranty that's standard on most manufacturers' switches?  Oh, wait, if I didn't put the warranty on my 470 or RFP, then I can just say it's ancillary.  What if I ask for at least a 3-year warranty and I end up with a lifetime warranty?  I think I'll need a lawyer to split the hair of whether asking for an eligible warranty but getting an ineligible one still fits into the Ancillary Use definition.  Or since it's a bundled warranty, is it eligible, just not as part of the purchase?  Three years after buying the equipment, I could start making separate BMIC FRNs for $0 to cover the non-cost of the bundled warranty....

Why do I think some service provider is going to try to jimmy their video server into the Caching definition?

"The agreement or contract must specifically identify the eligible internal connections covered, including product name, model number, and location."  Why?

"Upfront estimates that cover the full cost of every piece of eligible equipment."  That implies that as long as my upfront estimate is for less than the full cost of every piece, I'm good.

And that's all she wrote.

Wait!  We just heard last week that the FCC will be requiring RFPs for self-provisioned fiber, and requiring that applicants seeking self-provisioned fiber have to solicit bids for leased fiber.  How is that not mentioned?  That's a whopping new and unusual condition on eligibility.  It should be in the ESL.

Does anyone else feel like this blog post is longer than the ESL?

Success? Well, yes, but...

Mostly, I agree with Chairman Wheeler's latest blog post.  But of course, I'm going to focus on areas of disagreement.  It's sort the inverse of the new ESL: I'm not going to list everything I agree with, so if something he said isn't mentioned in this blog post, you can assume I agree with it.  Unless I have disagreed with it somewhere else in this blog or filings with the FCC.

First, the most critical issue: the Chairman used a small "r" in spelling "E-rate."  No, no, no.  As recently as September, he was using the big "R."  What happened?

Next, a disagreement that seems nitpicky, but is kind of important.  The Chairman talks of "supporting cutting-edge, one-to-one digital learning."  From what I've seen, schools have blown right by 1:1 and are passing 2:1 and wondering if it will stop at 3:1 (phone, laptop/netbook and tablet/gaming device).  It's important because it affects the recent excitement about "duplicative" services.  Because a lot of schools aren't going to want student smartphones using the same Internet connection as online testing.  So we'll increasingly see schools buying a separate Internet connection for the students' second (and third) devices (and the Internet connection for testing is actually going to be 2 connections, because if testing gets paused by connectivity problems, it's in the papers).  Unfortunately, the current duplicative policy is based on the mistaken belief that each student has at most one device (and the mistaken belief that a school can rely on a single connection).

I don't see the "pent-up demand."  Here's a table showing what I mean:

Disc.	Max. Demand	Requested	% Requested
20%	$ 6,049,500	$ 531,458	8.79%
40%	$ 338,603,400	$ 39,027,526	11.53%
50%	$ 444,421,125	$ 68,381,954	15.39%
60%	$ 628,483,860	$ 141,881,622	22.58%
70%	$ 1,091,851,950	$ 64,178,921	5.88%
80%	$ 1,833,255,480	$ 1,351,202,599	49.71%
85%	$ 885,083,963
Total	$ 5,227,749,278	$ 1,665,204,080	31.85%

The "Max. Demand" column shows the maximum demand for each discount band, from a spreadsheet I made back in June.  The "Requested" shows what applicants actually requested, based on USAC's Demand Estimate.  It's a bit of a blunt instrument, but it does show roughly how voracious demand was.  Except for high-discount applicants, I don't see a release of pent-up demand.  The 80-90% applicants went after it a bit, but requests have been over $2 billion in recent years, so I don't think $1.3 billion is big.

Ooh, some example applicants, those are always fun.

How did Kindred, ND get selected?  I just wonder what made them the poster child for small rural C2 requests.

The application hasn't been through PIA, so I'm not going to discuss what I think of the equipment in the request or what it costs, but I do want to point out one thing.  According to the 471, the Kindred school district has 689 students, giving them a C2 budget of $103,350.00, so the total pre-discount charges of $98,725.00 fits in nicely right?  Nope.  Unfortunately, the high school only has 299 kids, so it only has a budget of  $44,850.00, and since the district opted to split the cost evenly between locations, each location has a pre-discount cost of $49,362.50.  So right away, PIA is going to knock $4,512.50 off the pre-discount amount, which means Kindred loses $1,805.00 in funding because the FCC decided that $150-in-5 budgets have to be divided by location.  In general, does anyone think that an elementary school with 390 kids really needs 30% more C2 funding than a high school with 299 kids?  Because that's what the rules say.

And you know what Kindred's E-Rate funding will be in 2 years?  $0.  Because their C2 budget is almost used up, and their voice discount will drop to 0% by then.  OK, so they'll still get funding indirectly as part of the big ND School Net consortium, but they will no longer be filing a 471.  Actually, I guess that's what the FCC wants: everything through a consortium.

The Philadelphia School District gets mentioned, too.  Yes, that $5.7 million will help connect their kids to Wi-Fi.  But in the 5 funding years before that, the average annual request was $6.3 million.  And the overall average since the start of the program is $16 million per year.  So $5.7 million is only exciting if you're thinking of the last 2 years, when the FCC decided not to fund any P2.

Philly shows us another dark side of the per-location $150-in-5 budgets.  Open their application, go to the Item 21 information, and expand everything.  The relatively simple purchase of some wireless gear has exploded into a bookkeeping nightmare.  Imagine an auditor trying to figure out if the amount listed for each school was used in that school.  And what did we gain from all that complexity?

I have to admit, though, that the FCC's demand projections were better than my doom-and-gloom.  And the reforms are driving funding to broadband and Wi-Fi.  So overall, I think the Chairman has a right to crow.

Bundling a loophole

I thought Managed Internal Broadband Services (MIBS) was a messy loophole through which service providers will try to force all sorts of things.  Here comes a prime candidate: Sprint has launched a service that seems to be called OfficeFuel or WorkPlace-as-a-Service (WPaaS).  It is a full-service MIBS offering, but since it's Sprint, of course it also includes voice and mobile data.  As if figuring out MIBS weren't difficult enough, now we're going to get differently eligible services.  The cost allocation possibilities are extreme. The voice portion is eligible, but at a reduced discount.  And hey, if Sprint is running the whole show, they'll be able to show what portion of your cell phone's data goes through Wi-Fi, and since the cost of your cellphone data plan will be part of the monthly per-user fee, will mobile data creep back in?

Ugh, MIBS.

You celebrate. I'll grumble.

OK, so maybe I was a little pessimistic.  My pre-window estimate was that Category Two (C2) funding would run out somewhere between 70% and 50% applicants.  Well, last week USAC released the official Demand Estimate, and the total demand is just over the $3.9 billion cap.  Then 2 days later, the FCC issues an order directing USAC to cover it all.

Now it's official: everybody who applied correctly will get C2 funding in 2015-2016.  That is very good news for the stability of the fund.

If demand was higher than the cap, how did they fund everyone?  The rollover, of course.  Because the FCC has chosen to violate their own rule and deny all C2 funding for the past 2 years, USAC is sitting on $1.6 billion in unused funds.  So they can cover the $0.019 billion over the cap.

But the way they've chosen to cover it is bad for the stability of the fund.  To maximize the safety of the fund, the FCC should have raised the contribution factor to pull in the cap, $3.9 billion, and then used just a smidgen from the $1.6 billion unused funds war chest.  Because it is possible that demand next year will be way over $3.9 billion, and the FCC will be wishing it still had that unused slush fund.

OK, that seems extreme, but I think they should have left some of the money in the unused pile.  For example, they could have said, "OK, here's that extra $1 billion that the Chairman promised for FY 2015," and left $600 million in the unused pile for next year.

What did the FCC do?  They said: "We ... direct USAC to fully fund eligible category one services under the new cap. We also direct USAC to fully fund eligible category two services, first using as much as $1.575 billion in E-rate funds unused from previous years, and then using any additional funds needed under the new cap to fully meet demand."

Seems reasonable, right?  No, it's actually a mistake.  Maybe a big one.  Walk with me as we go through what will happen.

First, USAC will fund Category One (C1).  Total C1 requests are $2.25 billion.  USAC usually ends up denying/reducing a little over 10% of the total requested amount.  So USAC will probably approve something like $2 billion in C1 funding.

Next, USAC will start using the $1.6 billion in unused rollover funds to cover P2.  Total C2 requests are almost $1.7 billion.  Applying a 10% denial factor, we get to about $1.5 billion in approvals.  Hey, we didn't eat up the whole rollover!

Did you notice the problem?  The amount that E-Rate pulled from the Universal Service Fund (USF) for FY 2014-2015 was just over $2.4 billion, the program cap.  But in 2015-2016, the E-Rate is only going to pull enough to cover C1, which is going to be something like $2 billion.  Now normally, I would say it's a good thing that the E-Rate program will be reducing the contribution factor.  But does anyone believe that demand is going to decrease next year?  Does anyone believe that the FCC is going to find another $1.6 billion for FY 2016-2017?  Remember that the big reserve is the result of no C2 funding for 2 straight years, and by leveraging the fund.  Neither of those options is available in the future.

So next year, it is possible that the E-Rate will need to pull $3.9 billion from the USF. Since we're only taking $2 billion this year, that almost doubles the E-Rate's demand on the USF, which means the contribution factor is going to spike.  This year's "yippee! we cut spending" party will give us an "oh my aching contribution factor" hangover next year.

And the spike will hit in July 2016, just a few months before the elections.  If I were Hillary Clinton (or any Democratic candidate for Congress), I would be on the phone to Chairman Wheeler right now.  And I would be saying, "Take $3 billion or so from the fund this year, and let's have the 'yippee! we cut spending' party at this time next year."

Meanwhile, Commissioners Pai and O'Rielly should start resting their voices now, so they'll be ready to give a proper outcry at this time next year.

Duplicativicity

Early reports indicate that USAC has misunderstood what they asked for on the Item 21 Attachments, and PIA is going to be asking about "duplicative services" over and over.

See, if your ISP provided the circuit from your district hub to the ISP's POP, you were expected to describe that as "Internet and Transport" instead of "Internet only."  (I believe the thinking was that the information could then be used to better compare Internet pricing if you knew whether it was just the Internet port or port+circuit.)  Of course, then you'd also have a WAN providing Transport from the district hub to the other locations in the district.  So now you have Transport twice for each of the non-hub locations, so it looks duplicative.

And PIA is going to ask about it.  It's not duplicative, of course, which I hope PIA will understand quickly, but it creates a lot of extra work.

Meanwhile, you can't really draw any conclusions about the price of an "Internet and Transport" FRN, because you're allowed to dump your WAN (a telecommunications service) into an Internet Access FRN (a kludge that was created to allow statewide/regional networks and ESAs, which are not telecom providers, to provide WAN connections to individual schools).

Ironically, the warning that duplicative services are not eligible was removed from the 2015 Eligible Services List because the FCC wanted to "streamline" the ESL.  The FCC apparently feels that if you wanted to get $3,000 in funding for your school, it is your responsibility to find, read and retain the information in paragraphs 22-24 of the Second Report & Order (written in 2003).

In short, now that the duplicative services rule is well hidden, PIA is going to try to enforce it using misinformation from a system which had to be weirdly designed to allow grey-market sales of telecommunications services by states, ESAs, et al.

Get her!

I opened USAC's Annual Report when it first came out, but then the filing window got in the way, so I'm finally getting back to it.  If you're looking for a reasoned summary, you should know better than to look here.  As usual, it's just going to be a waggish look at whatever pops out at me.

My first laugh: the "Interactive PDF" version was OK, but the first three pages of the vanilla PDF version says:
MOVING FORWARD
TO GET
HER
Alas, I guess someone noticed and now the USAC PDFs both have two-page-wide layouts, so "TOGETHER" is no longer split, but the FCC retains the old, threatening version.

Staying with the snark, here's part of the USAC CEO's opening statement:
"In 2014, the FCC continued to pursue an aggressive modernization agenda for the universal service programs.... These changes have created a dynamic and exciting environment for our organization...."
Translation:
"Holy crap!  Did you have to change everything in one year?!"

"High Cost Program"?  I thought it was renamed the Connect America Fund.  That change should happen now, because "High Cost" is a terrible name for a government program.

"Lifeline Program"?  When did the Low Income Program get a name change?

The Service Providers Participating by Funding Year graph on page 13 is interesting for a couple of reasons:

1. The graph only shows the last five years, so it ignores that there were once over 8,000 service providers in the program.
2. The number of service providers dropped by 10% from 2013 to 2014.  Meanwhile, P2 demand dropped by only 3.6%.  Why would that be?  I'm guessing that every year, a new batch of P2 providers thought they'd found the Promised Land, but left the program in dejection, to be replaced by an eager new crop every year, and after 15 years, there aren't any naive P2 vendors left to replace the dejected ones that are leaving.

I expect a large drop in the number of service providers in 2015, with so many services cut out of the program.

Here's an incorrect statement on page 12: "USAC paid nearly 98 percent of invoices within 30 days of receipt."   Do a little math on the invoicing numbers on page 16, and you'll see that 6% of invoices were rejected.  And it's not clear whether that includes "pass zero" invoices, where the invoice is approved, but for $0.00, so nothing is paid.  So USAC paid at most 94% of invoices.

Page 16 has a chilling blast from the past: "internal controls."  Years ago, that was PIA's way of saying "mind your own business" whenever you tried to find out why you were being asked all these questions.  Now we have the secret 700-page tome of PIA "procedures," and "internal controls" means that USAC is keeping track of its money.

Ooh, let's play with the application processing numbers on page 16.  The FY 2014 numbers don't look too bad: by the end of 2014, half way through the funding year, only 5.7% of applications remained undecided.  Not bad.  About 53.1% of applications were approved before the start of the funding year, which seems low unless you know the recent history of the program.

The FY 2013 numbers aren't so pretty.  At the end of the funding year (2Q 2014), 5.7% of the applications were undecided.  At the end of 2014, six months after the end of the funding year, the undecided percentage was down to 4.7%.  At that rate, they'll finish up sometime in 2018.

The percentage of applications rejected seems pretty steady around 17%.  Wait, what is a "rejected" application?  A 471 that was rejected before looking at individual FRNs (for example, an application filed outside the funding window, or never certified)?  A 471 on which all FRNs were denied (perhaps en masse due to, for example, not having a 470, or each dismissed on its own (lack of) merits)?  A 471 on which at least one FRN was denied?

I find I don't have much patience for the financials, but let's see what catches my eye.  Looks like USAC is holding almost $8.5 billion to cover future payouts under "Assets held for the Federal USF."  That's up from $7.7 billion in 2013 (and $5.4 billion in 2006).  Is this where the Chairman is going to get his extra $1 billion/year?  I'm betting it's just the CAF reserve that the FCC started building at the end of 2011.

I am tempted to do some analysis of the table on page 43, but I did that analysis last year, and I doubt much has changed.

How was that new form?

Well, I'm finally recovered from the filing window, so I thought I'd give some feedback on the new online form.  All of these observations were made in the heat of filing, and I'm unwilling to go back and verify them, so they're a little suspect.  They're also in no particular order. I'll divide them into pluses and minuses, but otherwise they're just pretty much in the order in which I was nettled by them.

Pluses:

1. The "Back" button saves whatever you've put in.  Sometimes.  In the old days, "Back" meant "discard everything I just typed in and go to the previous page." 
2. The countdown clock still shows the seconds ticking away.  I just love that.
3. If you paste in a number with extraneous spaces, the spaces are stripped out.
4. On the last couple of days, I didn't notice any significant slowdown or failure.
5. Some errors are automatically fixed (like if you put in a Service End Date outside the Funding Year on a Month-to-Month FRN).

Minuses:

1. Item 21 is a pop-up in front of the browser window (the browser window is grayed out).  If you click outside the pop-up but inside the browser window, it makes the pop-up vanish, and any info you put in vanishes.  So if you've completely filled the attachment, but you want to switch to the vendor's bid to check the price of one of the items, when you click back in the browser window, beware!  Click on the grayed-out part of the window, and you have to start over again.  On a big Category 2 FRN, it's an easy way to lose a half hour's work.
2. Why do I have to make a selection under Burstable Bandwidth for an FRN that's just POTS lines?  [Perhaps the programmers thought Burstable POTS was a clever shout-out to Legend of Zelda?]  At least you can leave the bandwidth fields empty.
3. You can't paste in an amount if it has a dollar sign or comma in it.  You don't get an error message, it just acts like you never pasted.  After pasting 3 times and seeing nothing happen, I figured something was up and starting stripping out punctuation.
4. It's tedious to have to fill out several pages where you used to have only one.  Block 1 used to be one page, now it's several pages.  Simpler pages, but still.  And Block 5 is a dizzying array of pages, popups and buttons.  But I guess most of the extra Block 5 pages are the result of the amazing increase in the complexity of Block 5.
5. If you import Block 4 from a Category 1 application into a Category 2 application, it doesn't fill in the enrollment in the Budget Calculation section, even though the enrollments are right there in the Discount Calculation Worksheet.
6. Chrome autofill doesn't work.  Not a big deal for normal applicants, but I was grinding my teeth every time I had to type my Consultant ID again.
7. If an Item 21 item has only one entity, you have to check that services are shared equally among all entities.  I want it to say "shared equally among all entity."
8. Item numbers are gone.  No longer can I say: "Whatever you do, don't check Item 23f" or "The person in Item 6a should be the person who will answer application reviewers's questions."  It was handy shorthand for us E-Rate geeks.
9. We still have "Item 21 Attachments," even though there is no Item 21 any more.  It was unfortunate jargon before, but now it's just inscrutable.
10. Tab order is messed up.  For example tab from Item 23d and you end up at the "Certify Online" button, which is definitely not where you want to be, because you still have to check all those certifications.
11. Why force people to check all those boxes in Block 6?  Why not just one big fat certification?  It would streamline the process to have applicants ignore one big certification rather than having to ignore a dozen little ones.
12. You can't tab from checkbox to checkbox on the Certifications page.  Block 6 used to be: click the first box, tab, space bar (which checked the box), tab, tab, space, tab, type in some number for 23d, tab, tab, space, tab, space, tab, space, tab, space, tab, space, tab, space, tab, space, tab, space, tab, space, tab, space, tab, space, tab, space, tab and then you're filling in certifier information.
13. Those certification checkboxes are too small for a man of my age to click in reliably.  When my laptop wasn't docked to a big screen and mouse, it was taking me 2 or 3 attempts using the trackpad and the little screen.
14. Why do I have to give a bandwidth for dark fiber?  It's dark; it doesn't have a bandwidth.
15. Some of the fixes are too automatic.  If you put a date outside the funding year for a Month-to-Month service, the system automatically fixes it.  That's great, except maybe you checked MTM by mistake, and if a message popped up saying "Hey, you put in the wrong date, but it's fixed now."  Actually, an error message does appear for a moment, but it vanishes instantly as the form fixes the date for you.
16. And sometimes those autofixes are weird.  When you type a date into the contract expiration date box in Block 5, if you type two digits for the year, it automatically adds the "20"; cool!  But wait, it changed to "6/30/16" to "6/29/2016."  And if you click in there and try to change "29" to "30," you end up some time in the year 2199.  So check it out: type in "6/31/16," and it will become "6/30/2016."  I spent way too much time trying to imagine what algorithm would unintentionally cause that behavior.
17. In Block 5, if you check "Yes" under "Is every entity on this application receiving the product or service in this line item?" then go back to Block 4 and add a new entity, unbeknownst to you, the box unchecks itself, and the new entity is not part of any funding request.  Seems to me if you checked Yes to every entity sharing, that should include entities added later.  And even if it doesn't, you should get a warning that adding an entity in Block 4 changes Block 5.
18. Sometimes if you make an error in a pop-up window, the window goes away, and you think you've accomplished whatever you were in that pop-up to do, when in fact you need to go back and do it over.
19. If you aren't ready to put numbers in the Discount Calculation Worksheet, for God's sake don't click in there.  Once you've clicked there and opened one of those text boxes, you can't do anything else until you put a number in there.  You can't even log out of the application. I was stuck in that box when the system logged me out for inactivity, and I was completely locked out, looking at a grayed-out window (with the countdown clock ticking away) and a pop-up saying: "Number of Students Attending this School as their Home School is required." I had to close the browser window.

Overall, the form was better than I expected, and less quirky, but any new form will have its oddities.

I was disappointed that we didn't find any new Stupid 471 Tricks, but we'll keep looking.

First wave soon?

Let the waves begin!  The FCC has approved the application review procedures for FY 2015-2106.  In theory, PIA could start issuing FCDLs tomorrow.  Funds for Learning says 659 applications were in Quality Assurance as of March 24, 2015, so there are applications ready to go out the door.

Is it possible that we'll get a wave of FCDLs before the end of the filing window?  It could happen: in 2010, the first FCDL came out 13 days after PIA procedures were announced.  And back in 2000, the first FCDL was issued April 14.

Don't hold your breath: last year the PIA procedures were approved 19 days before the end of the window, but we had to wait 50 days after the close of the window to see the first FCDL.  And this year the application process is more complex and has changed a lot.  I think we'll be lucky to see a wave in May.

A wave inside the filing window would certainly encourage applicants to file earlier next year.  But providing carrots to change applicant behavior doesn't seem to come naturally to the FCC, so if they really want earlier applications, look for the stick.

USF as Peter, FCC as Paul

If you're like me, you can't bring yourself to read the 120-page FCC FY2016 budget request, nor even the 20-page Budget in Brief.  (Here's a good rule of thumb: if you can call 20 pages "brief," you've been inside the Beltway too long.)  But I did read Chairman Pai's recent testimony about it, because he's getting reliably hostile, and I love a good rant.  Plus, he uses bold text and bullet points, so I can easily skim over parts that don't interest me.

But I found one part that does interest me: the FCC wants to transfer $25 million from the USF to the FCC.  Oh, hell no:

1. This is a step closer to the old Joe "Bleed It Dry" Barton plan to kill the E-Rate by moving it into the Treasury and giving it the Death of a Thousand Paper Cuts.  The USF should not be paying the salary of any government employees.
2. The FCC wants to use the money to fund more investigations.  I can say with considerable confidence that no one in the applicant community feels that what this program needs is more investigations.  
3. The FCC can make the USF as large as it wants with no Congressional approval.  If it gains the ability to fund itself from the USF....

So I'm with Commissioner Pai on this one.  I just can't get behind taking money from program beneficiaries and gives it to government employees to investigate beneficiaries.  It feels good to be agreeing with Commissioner Pai; it feels like lately I haven't had anything good to say about his ideas.  I'm not even going to put a Pai pun in the title.

One positive note: the request says $10 million will go towards the creation of  a "Joint USF Anti-Fraud Task Force."  I hope that means the Chairman has finally given up on the "Strike Force" rhetoric.

But instead of spending $10 million on a new Task Force, how about just implementing a few more of the recommendations from the 2003 Task Force?