Cowabunga

The first wave is out!  And it's a big one.  USAC's New Brief on the subject says that over half of the applications got an FCDL.  We've had bigger waves, but we've never had one this large so early.

It's definitely the low-hanging fruit.  Why do I say that?

1. The News Brief  says that commitments were issued for 18,500 applications and 24,000 FRNs.  So they vast majority of the applications approved had 1 FRN.  
2. While over half the applications were funded, only 18% of the requested funding was committed. So the amount of funding per application was way below the average.
3. Only 6% of the funding is for Category 2, while 34% of the funding requested was for C2. So they avoided C2 for the most part.

Here's a table to put this wave in historical perspective.

FY	Window close	Days passed	PIA approved	Days passed	First FCDL	Total days	Million	Apps
2019	3/27/19	0	3/27/2019	31	4/27/19	31	$530	18,500
2018	3/22/18	6	3/28/2018	23	4/20/2018	29	$501*	15,033*
2017	5/11/2017	1	5/12/2017	14	5/26/2017	15	$47	4,919
2016	5/26/2016	14	6/9/2016	7	6/16/2016	21	$17	2,251
2015	4/16/2015	-27	3/20/2015	62	5/21/2015	35	$151	7,100
2014	3/26/2014	-19	3/7/2014	69	5/15/2014	50	$607	14,600
2013	3/14/2013	57	5/10/2013	19	5/29/2013	76	$130	12,023
2012	3/20/2012	35	4/24/2012	77	7/10/2012	112	$646	23,800
2011	3/24/2011	75	6/7/2011	19	6/26/2011	94	$398	18,500
2010	2/11/2010	91	5/13/2010	13	5/26/2010	104	$429	18,200
2009	2/12/2009	49	4/2/2009	26	4/28/2009	75	$134	6,931
2008	2/7/2008	63	4/10/2008	21	5/1/2008	84	$352	10,000
2007	2/8/2007				4/23/2007	74	$202	21,000
2006	2/16/2006				4/26/2006	69	$184	4,880
2005	2/17/2005				6/27/2005	130	$342	7,700
2004	2/4/2004				4/27/2004	83	$43
2003	1/16/2003				5/1/2003	105	$230
2002	1/17/2002				4/24/2002	97	$233	9,300
2001	1/18/2001				7/23/2001	186	$478
2000	1/19/2000				4/14/2000	86	$253	13,000
1999	3/11/1999				7/13/1999	124	$116	6,000
1998					11/23/1998		$73	3,000

*The FY 2018 first wave was released it on in two waves, on 4/20 and 4/21; I'm counting those as one wave.

Tempest in a specially constructed teapot

USAC has sent a letter to Commissioner O'Rielly in response to his letter with questions about consortium's overbuilding existing fiber.

First, the most important question: did USAC capitalize the "R" in "E-Rate"?  No!  Philistines!  They even have the gall to shrink the big R when quoting from the Commissioner's letter (he used the big R consistently in his request, perhaps to avoid being labeled O'rielly).  USAC didn't even acknowledge that they were altering the Commissioner's letter with something like "E-[r]ate" or "E-Rate [sic]."

On the main question, USAC's response is a big nothingburger: USAC doesn't know which special construction projects are overbuilding existing networks because carriers don't share the routes of their fiber deployments with the public.  Perhaps the Commissioner will explain exactly what he means by "overbuild" and make a new request.  At one point, he hinted that "overbuild" might mean "installing new fiber in a county where some fiber is already installed." Even so, I can't find any way to find out whether fiber optic cable is hung on poles in a particular area.  USAC mentioned the National Broadband Map, but that's only useful for determining consumer access to Internet access at speeds of at least 25 Mbps (the FCC's benchmark for "broadband").  I can't find any tool that determines if there is any fiber installed in a geographic area.  I guess it's safe to assume that if an ISP is offering 25 Mbps to consumers, it's probably moving that traffic to fiber somewhere nearby.

And now, a little analysis that no one cares about.  The numbers don't add up for me. For example, in FY 2017, USAC says 19 applicants requested special construction as consortia.  Of those, 18 got a funding commitment, 2 were denied for cost-effectiveness, and 2 are still pending.  That's 19 applicants and 22 results.  That must mean that some poor applicants are both Committed and Denied and/or Pending. And if you look at the dollars, there is $74 million requested, $34 million Committed, $2 million Denied-for-cost-effectiveness, and $3 million Pending.  That leaves $35 million unaccounted for.  So that means that almost half the applicants are neither Committed, Denied-for-cost-effectiveness or Pending.  (I suppose most of them are Denied-for-reasons-other-than-cost-effectiveness.)  That means that at least one applicant had a result other the 3 results shown, so we've got 19 applicants and 23+ results.

While writing this, I was just watching a Funds for Learning webcast [my inability to focus on one thing at a time is no reflection on the quality of the info or presenters], and one of their slides (you can see it right around 21:00 in the recording) showed that program-wide in FY 2019, applicants planned to spend much more on lit fiber with special construction ($175 million) than on leased dark fiber ($69 million) and self-provisioned ($57 million) combined.  So some (perhaps most) of the funding shown in the USAC letter will be used to connect existing lit fiber networks to applicant locations, which means it's not overbuilding.  For context, requests for lit fiber with no special construction total $1,889.7 million.

So how much overbuilding is going on?  No one knows.  But we do know that it isn't much.

Special constriction

You know I'm going to read and comment on a new report out from the Benton Foundation and EducationSuperHighway called "Improving the Administration of E-Rate."

Oh dang, it's long. And no pictures.  OK, maybe just the Executive Summary.  Here's my Executive Summary Summary:

• USAC is using a flawed cost model to delay and deny special construction applications.
• PIA is asking confusing, opaque and flawed questions. 
• “Cardinal change rule”  ('nuff said).

Damn, they pulled me in.  I'm reading on.

"But nothing in the FCC’s orders authorize USAC to administer its duties through a hidden process, based on non-transparent criteria...."  What?!  The entire PIA process is administered through 700 pages of hidden processes and non-transparent criteria!  Yes, the special construction approval process is kafkaesque, but it's no worse than any Cost-Effectiveness Review (CER). All the points they raise apply to all CERs, as some of us have been pointing out since the CER first appeared.

The report also says that the ever-shifting questionnaire on fiber builds is improper because USAC is making changes in the standards for approval of E-Rate applications.  That may be true, but we don't know; the standards are secret.  It may be that the questionnaire is in the PIA procedure manual that the FCC approves every year.  We'll never know, because the FCC says that the routine processing of funding applications is a law enforcement action.

I like the report's discussion of the Public Records Act (PRA) requirement that information collections be approved by OMB. " The absence of OMB approval appears to provide any E-rate applicant with a complete, statutory defense to any agency action." Oh, snap!  Except unapproved information collections are nothing new.  Remember Item 21 Attachments?  Required information collection, but not approved by OMB.  And don't forget bid evaluation worksheets.  Shouldn't Service Substitutions and SPIN Changes be on a form?

Next, the report turns to the "cardinal change rule." I agree that USAC has provided no guidance on what the rule is, but what did you expect?  They haven't even defined what an RFP is, even though they're requiring them for some applications. (Add RFPs to the list of information collections without PRA approval from OMB.)

The recommendations in the conclusion are all very good and quite reasonable.  But since the FCC believes that E-Rate applications are law enforcement actions, it wouldn't be prudent to give all that information to the suspected lawbreakers (applicants).  

Also, reducing the fear and uncertainty in the E-Rate application process will put us E-Rate consultants out of business.  In principle, that's good, but in practice ... well ... can we wait until my kids are out of college?

ESH we hardly knew ye

I've had my disagreements with EducationSuperHighway about the data they collect and how they analyze it, but on the whole, they have been a very positive influence on the E-Rate program.  And their message of "more fiber!" is an important counterpoint to Commissioner "Overbuild" O'Rielly.

So I can't say I'm happy that they're winding down.  In principal, I find it quite refreshing for an organization to say, "OK, we did what we set out to do.  Bye!"  But in this case, I have the feeling that we'll always need someone to fight a rearguard action against the special construction naysayers.

So, ESH, kudos on deciding to phase yourselves out.  Only don't.