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Monday, March 30, 2015

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.

Wednesday, March 25, 2015

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?

Thursday, March 19, 2015


As I'm filling out 471s, it suddenly occurs to me: most of my clients could be looking at a jump in Internet access costs of about 15% next year.  The FCC's recent Net Neutrality Order made ISP charges subject to USF contribution requirements.  The Order put in place a temporary forbearance on those charges, but footnote 1471 says, "...the Commission has referred the question of how the Commission should modify the universal service contribution methodology to the Federal-State Joint Board on Universal Service (Joint Board) and requested a recommended decision by April 7, 2015.... We recognize that a short extension of that deadline for the Joint Board to make its recommendation to the Commission may be necessary in light of the action we take today."  Commissioner Pai says that means the USF is coming to ISPs soon.

I think those recommendations then have to go into an NPRM, so I'd be surprised if we see contributions before July, but it seems likely that contributions will start before June 2016.

Wednesday, March 18, 2015

Stupid Window Tricks

I don't know why I didn't think of it before, but this morning it occurred to me:
With the window extended to April 16th, and the new rule that Category 2 equipment can be purchased any time after April 1st, you can actually make an E-Rate-eligible purchase before the window closes.

If you find that interesting, you are a full-fledged E-Rate geek.

Wednesday, March 11, 2015


The Council of the Great City Schools (CSGS) request for an extension of the filing window has me in a ranting mood.

The first reason that CGCS gave for needing an extension is an explosion in the complexity of the 471.  What caused the explosion?  The need to cost-allocate Category 2 purchases among locations.  The reason cost allocation is necessary?  Because the FCC made the $150-in-5 budgets location-specific.

Can we get that rule changed?  We should have a district-wide Category 2 budget.

First, per-location budgets solve a problem that doesn't exist.  Does the FCC really believe that a district is going to look at two of its elementary schools and for some capricious reason spend more on one school than the other?

Second, it restricts a district's flexibility in trying to meet its actual needs.  Districts should spend more on technology for some schools than others.  For example, districts should spend more on Wi-Fi for high schools than for pre-schools, because high school students have 2 or more Internet-connected devices with them at school (it's no longer "BYOD or 1-to-1"; it's both), while the pre-school kids have zero Internet-connected devices.  The high school needs more than $150/student.  The pre-school needs less.  But thanks to the FCC's perverse rule, the high school students will be in the Bandwidth Hunger Games, while the pre-schoolers will be bathed in bandwidth they can't use.

Here's an extreme example, but it is actually happening this year.  A district has 3 schools: 2 elementary and 1 high school.  Last year, the roof of one of the elementary schools gave out, which completely destroyed the data network.  The district ponied up its own money to put in an entirely new network at that school.  (There is no way to get E-Rate funding in time to cover a catastrophe, and besides, the FCC hasn't chosen to fund Priority 2 for the past couple of years.)  They don't plan to spend another dime on that school in the next 5 years.  But because their budget is location-specific, what are they going to do with the $150/student budget for that school?  They're going to tear out all the new switches and access points in that elementary school and move them to the high school, then buy the same equipment with E-Rate funding and replace the equipment they just removed from the elementary school.  That school has zero need for E-Rate funding, but because the FCC forces them to fund that location, they are going to ridiculous lengths to artificially create a need.

Third, it creates complexity.  The CGCS letter says that one Chicago Public Schools 471 will have 17,500 line items because it has to allocate costs among 250 schools.  (It would have been 35,000 line items if they'd included all 500 of their schools on the 471.)  How many person-hours will be wasted by Chicago creating that monstrosity, and how many will be wasted by USAC reviewing it?  LAUSD says that it's going to take them 5-7 days per application, as opposed to the 1 day it took to do before the per-location budgets.  5 times the work.

Fourth, it creates more complexity.  If the $150-in-5 budget weren't location-specific, there would no longer be any need to track the location of equipment.  Until this year, USAC had to track locations and the FCC had to make up a rule about transferring equipment so that districts wouldn't use high-discount locations as "equipment mills," buying new equipment every year (or twice every five years after that rule came in) and then giving their old equipment (or excess new equipment) to other (lower-discount) schools in the district.  Thankfully, the FCC got rid of location-specific discount rates.  But by making budgets location-specific, the FCC made it necessary to continue to tie equipment to locations.  It creates a whole bureaucracy around equipment transfers.

Fifth, it creates even more complexity.  USAC had to create a special procedure for handling cost allocation of Basic Maintenance.  I can't find it online yet, but yesterday we got a News Brief titled "Guidance for the Online FCC Form 471 Alternative Data Entry Process for Basic Maintenance Funding Requests."  (It even coins a new E-Rate acronym: ADE.)   Yet another fork in the road as you try to find your way through the application process.

So to solve a non-existent problem, we get inflexibility, complexity, complexity and complexity.

On the plus side, this rule is dramatically driving up demand for E-Rate consultants.

And I'll slip in a little something from an unrelated rant.  Imagine the above post if I'd used "entity" instead of "district" and "location."  It would have been an incomprehensible muddle advocating entity-wide budgets instead of entity-specific budgets, asking that Category 2 budgets should be allocated on a per-entity basis, not a per-entity basis.  Let's get the word "entity" out of the program.

Natural window enhancement

Worrying that you won't figure out how to do the cost allocation for Category 2 in time for the big March 26th deadline?  Well, maybe you can take a breath.

The Council of the Great City Schools (CGCS) has sent the FCC and USAC a request to extend the filing window to April 16th.  Funds for Learning ran a survey and sent the results to the FCC.  And now I see the AASA is jumping on the bandwagon, so it seems like an extension is a real possibility.  The question seems to be whether to go with a 2-week or a 3-week extension.

Me, I'd like to see the window close in May.

The people against the idea are saying, "If we delay the window close, it will delay FCDLs."  I don't think so, and here's why:
  1. By my count, there are 10,000 Forms 471 from FY2014 still sitting in the PIA hopper.
  2. On March 6th, Funds for Learning says there were 8,311 Forms 471 from FY2015 filed.  That will easily top 10,000 by March 26th.
  3. The FCC still hasn't approved PIA procedures (the secret 700-page set of rules that determine how PIA processes applications), so currently PIA can only "pre-process" FY2015 applications.
So whether there's an extension or not, on March 26th, PIA will have over 20,000 applications to chew on, and may not even know how to process half of them.  An extension is the least of their worries.