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Tuesday, March 14, 2017

What's the index, Kenneth?

Inflation is popping up everywhere this week.

First, the FCC has announced the cap increase for the E-Rate program for FY 2017-2018.  Normally, this would be a boring non-event, but I'm a little surprised that the new FCC Chairman is letting the fund grow.  Yes, the inflation index is in Commission rules, but surely some kind of special stay is possible.  More likely, the Chairman knew it's a fight not worth fighting: since the cap was raised from $2.25 billion to $3.9 billion, demand hasn't hit the cap.  So raising the cap 1.3% is meaningless.

What's this in footnote 2?  "This represents a $51,207,000 increase for the E-rate program funding cap as a whole, including a $38,077,000 increase for the category one services funding level and a $13,130,000 increase for the category two services funding level."  Why are they bothering to keep track of the increase to the non-existent $1 billion C2 set-aside?  Oh, it's in the rules.  Well, at least the WCB only wasted 5 minutes figuring that out.  But each year, due to the compounding increase, they'll need more time; in a decade or so, they'll be wasting 10 minutes.  (The draft of the EMO actually set aside $1 billion for C2, but before approval, that was changed to a sort of aspirational guideline.  Now the $1 billion which is not set aside for C2 has increased to $1.01 billion not set aside for C2.)

But here's an inflation calculation I missed.  In E-Rate Central's latest "News for the Week," they point out that the $150 in the $150-in-5 Rule is indexed to inflation.  And they've confirmed that USAC has increased the C2 budgets to $151.50/student.  That's actually not as pointless as calculating the increase to the non-existent C2 set-aside, and will probably have more of an impact than the cap increase  for the whole program.

But the math seems wrong.  They've increase the $150 to $151.50.  But shouldn't they use the FCC's inflation figure of 1.3%?  That would give us a $151.95-in-5 rule.  Is someone skimming that 45-cent difference?  Troubling if true.  Someone should demand a congressional investigation.  I'm kidding.  (Ever since the Dinner Table Rule made it into an NPRM, I feel like I have to make clear when I'm joking.)

I'm assuming that the $9,200/building minimum will also be indexed.  So those tiny schools and libraries that already blew their entire $9,200 budget will get a $119.20 windfall this year!

Eensy-weensy good news all around!

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