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Monday, January 23, 2017


Well that was quick: Commissioner Pai is now Chairman Pai.  It's not a surprise, and it is good to have the decision made.  But is it good for the E-Rate?

Let's look at the most important question first: does the new Chairman capitalize the "R" in "E-Rate"?  Yes!  But can he root out the Russian mole at the FCC that has been weakening our country's R?  Make the "R" in "E-Rate" great again!

What effect will Commissioner Pai have on the program?  At this point, it's mostly speculation, but I can't help myself.  It's hard to predict what the Chairman's priorities will be now that he controls the agenda, rather than just reacting to it.  Here are some thoughts based on his past statements.

Things I like:
  1. Big picture: the Chairman is not afraid to think outside the box and suggest big changes.  That's a little frightening, but I've been frustrated by recent reforms that just nibbled around the edges and tacked on a few new little facets.  He also seems to keep the needs of applicants foremost in his mind.
  2. Chairman Pai often deplored the partisanship and lack of collegiality in the FCC.  I have to agree.  Let's hope he can return the FCC to a less partisan body.
  3. He has said we should simplify the application process.  Yes!  Some of his proposals (while I didn't agree with all of them) could actually lower the workload on applicants.  I hope he really can simplify the process.
  4. As part of that simplification, the Chairman has suggested removing competitive bidding requirements from the E-Rate.  I'm all for that.
  5. The Chairman proposed a single discount rate for all applicants.  I don't actually like a single discount rate, but I do support simplification of the discount matrix.
  6. And that single discount rate would be 75%.  It's good that it's lower than 90%, which is too close to free, but I'd rather have the top discount rate be 65%, like it is over at the Rural Health Care program.
Things I don't like:
  1. Big picture: Chairman Pai has said, "E-Rate is a program worth fighting for," but has also said that he wants to reduce the size of the Universal Service Fund contribution factor, and seems willing to reduce the E-Rate program to do it.
  2. In the most recent statement I've found, the Chairman said, "We need to fire up the weed whacker...," but he seemed to be talking about Net Neutrality, not the E-Rate.  Still, I don't want anyone using a weed whacker near our little rose garden.
  3. The Chairman has suggested a per-student funding allocation, called "formulaic funding" in 2005 and "student-centric" funding when it was reheated in 2013.  Basically, take the current $150-in-5 budget for C2, and make it $32/student/year, including C1 and C2.   I'm not all that sanguine about per-student funding.
  4. The Chairman has said recently and repeatedly: "It is time to bring more openness and transparency to the FCC."  That's great, but it turns out what he meant is openness between commissioners, not transparency to program participants.  It appears that he means, at least in part, allowing Commissioners to meet in private.  That isn't good.
  5. Chairman Pai hates consultants, and has falsely implicated us in fraud perpetrated by service providers.
Other things:
  1. Chairman Pai sure sticks up for rural applicants.  When he talked about his budget concerns with modernization proposals, he was very concerned that rural schools were going to lose all their funding, when in fact, non-rural schools would lose funding first.  And his E-Rate 2.0 proposal included giving rural applicants twice as much funding per student as non-rural applicants.  I think it is true that rural areas are less likely to have the concentration of poverty necessary to reach a 90% discount, which meant the P2 gravy train didn't reach them, but I'm not so sure that rural applicants always need more money that non-rural applicants.
I don't think E-Rate will be at the top of his priority list, so the program should be stable for a year or two.  But then, watch out.

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