Ex parte part 2

The American Library Association (ALA) dropped a delightful post-reply comment proposing changes to the E-Rate. Let's take a look. The changes suggested:

1.  Create a bid threshold where competitive bidding obligations don't apply to any purchase of less than $10,000.
2.  Eliminate the 486.
3. Permit service substitution.
4. Validate the discount every five years. 
5. Permit rolling applications for C2.

All really good suggestions. But of course I'm going to offer more fullsome opinions. 

1. Of course, I'd rather the FCC just butted out of regulating the purchasing decisions of local government entities, but this is a great first step. Honestly, $10,000 seems a little low (I like $15,000), but it would still exempt a *lot* of E-Rate purchases, especially for smaller applicants.
2. The 486 doesn't trap as many applicants as it used to, but still, eliminating a whole form would be great, and there's really no need for it. Delete! Delete! Delete!
3. This one puzzled me, since service substitutions are already permitted, but what the ALA is saying is that service substitutions should not go through a compliance review. Hell, yes! No need to hold up a ServSub. While we're at it, can we simplify ServSubs? The EPC form is a complete drag. Basically, FRN line items suck, and their suckitude is laid bare in the ServSub process.
4. Another good one, especially for libraries, who don't know what's coming discount-wise, since it's determined by their school district. Set the discount when the C2 budget is set, and let applicants change it during the 5 years if they want, like with C2 budgets now.
5. The dime has almost dropped. Yes, C2 applications should be allowed on a rolling basis. But so should C1 applications. Since we're never anywhere close to hitting the program cap, there is no need for an application window. Rolling applications for everything! Or at least multiple filing windows until the money runs out.

Bravo, ALA! Imagine this: if changes 1 and 2 happened, and the applicant chose to use the SPI method, the E-Rate application process would be one form for most purchases. You know, like a normal program, where you just file an application.

Simplify! Simplify! Simplify! 

Ex parte part 1

What's been going on in the ex parte world? What's ex parte, you ask? Well, the FCC sometimes takes  a meeting or gets a letter to an open docket outside a prescribed comment period. When they do, the commenter sends them a summary of the meeting and the FCC publishes it, and puts out a daily list of all the ex parte presentations and post-reply comments. The E-Rate doesn't come up often, but there were a couple of interesting items in yesterday's ex parte list. Here's the first one.

Infoblox wants the E-Rate to cover DNS and DHCP services, and did a nice PowerPoint presentation describing DNS and DHCP and why they should be eligible. 

I agreed with everything they said, except for one omission on the eighth slide, where they give reasons why schools and libraries don't rely on their ISP for DNS and DHCP. In my experience, the main reason schools don't use their ISP's DNS is Web filtering. A lot of schools are using products like ThreatLocker to filter Web content at the DNS level. (By the way, if you aren't using DNS Web filtering at home, check out Cisco's OpenDNS Family Shield; it's free and it's effective.)

And then we got to the last slide, where they got down to brass tacks on eligibility, and I thought, "Nooooo!" First, they said that DNS services should be listed as "Category 1: Network Equipment." Huh? The beauty of third-party DNS services is that you make a simple change on your DHCP server (or DNS server if you have one), no equipment required. Then standalone DNS and DHCP services should be listed as "Category 1: Network Equipment with Mixed Eligibility" and "Category 2: Internal Connections and/or Managed Internal Broadband Services."

What the what? Why "mixed eligibility"? Unless they're acknowledging the can of worms that got DHCP and DNS kicked out in the first place. See, most of the time, DNS and DHCP are running on servers that also serve other purposes (because DNS and DHCP are not very demanding on a server). So allowing them is the camel's nose under the tent for making servers eligible again. It would allow applicants to put DNS or DHCP on a server that had some other (ineligible) function, and poof! it's 50% eligible, even though it's spending 5% of it's time answering DNS queries. And it would be easy to make a case for a DNS server in each building to decrease latency, so now you're getting 50% off a bunch of servers.

My bottom line: I'm OK with allowing DNS and DHCP services in Category 1, but not for equipment, unless the service provider is dropping an appliance that they manage onto your network. I don't like it for Category 2, because it's easy to abuse, but you know what? C2 budgets are so ridiculously small that it's fine to let applicants make a bunch of servers 50% eligible, because it just means they're going to run out of C2 funds for switches and APs faster. I just dread getting back into server cost allocations.

One last tangent: How did Infoblox shoehorn in comments about something that should be eligible? The FCC hasn't asked about that in ages. They made a comment on an NPRM clarifying the Wi-Fi Hotspot Report and Order. Gotta love that creativity.

New News is good news, or at least not so bad news

Oh, that  news feed. I recently complained about USAC's reference to "your News feed" being useless, because there are so many different News feeds in EPC. Turns out I wasn't looking at the only News feed USAC was talking about. Oops.

See, I was only looking at the "News" link that appears on every page in the row of links (under the title of the page) that starts with "Summary." But in the recent notification of some missing FCDL emails, USAC actually told us where to find the News feed they're talking about: the feed you get when you click the "News" link in the upper left-hand corner of every EPC page, to the left of the "Tasks" link. Who knew that link was there? I did, probably, at some point, but forgot about it.

So what does this News feed get us? Let's see: RNLs, RALs, FCDLs, RFCDLs, notifications of certification and approval of 486s (no acronyms for those notifications? (and yes, I know that some consider RNL and FCDL to be initialisms, not acronyms, but I prefer the broader definition of "acronym")), BEAR notification letters (should that be BNL or BEARNL, or perhaps IDN from "Invoice Disbursement Notification"?), notification of Service Substitution receipt, notification of Form 500 receipt, notification of Appeal receipt, QDRs, SPIN Change request notification letters (SPINCRNLs), News Briefs, notification of changes in EPC (like changing the General Contact), and probably more.

All of the above you see only for your district, or in the case of consultants, districts to which you are currently attached as a consultant. 

And, for some reason, all the RFPs that are added to existing 470s (not the RFPs that are uploaded while creating a Form 470) for all applicants, whether you have any association with them or not. 

Naturally, it goes back to 2016, when EPC was born. Yes, I scrolled all the way down to check.

The best part about this News feed is that the Search tool works pretty well, so you don't have to scroll through all those documents.

What will I use this News feed for? Nothing. That's why I forgot it existed. 

The contribution bandwagon

 The Contribution Factor is having a moment. Today it's an op-ed in the Washington Post. The author advocates levying fees on Big Tech's online advertising revenue.

The article also links to a more in-depth analysis of funding options. 

Jump on the bandwagon and tell Congress that it's time for the contribution base to expand! 

Growth Factor

 The FCC won't release the final order until September, probably, but it looks like the Contribution Factor is going to set a new record: 39.3%. Looking at the USAC Fund Size Projections for 4Q25, it seems demand will growing 6.6%, so the rest of the growth in the Contribution Factor is coming from the shrinking Revenue Base.

Time for us all to ask Congress to expand the Revenue Base. 

Side rant

 Word from USAC:

A recent change by Microsoft prevented users with Outlook from receiving some email notifications from EPC between July 30 to August 5, 2025. USAC recommends users check their news feed to monitor any FCC Form 471, post commitment, and FCC Form 486 notifications that may have been missed.

Now you might think I'd rant about the email outage, but I don't fault USAC for that; they found the problem and fixed.

No, I'm going to rant about the recommendation to "check their news feed." To which I say: which news feed? 

As a consultant, I have news feeds for:

1. Myself as an individual
2. My company
3. Each of my clients 
4. Each consortium to which my clients belong 
5. Each of my clients' individual 470, 471 and 486 forms
6. Each FRN on each of my clients' 471s
7. Each FRN line item on each of my clients' 471s

There may be some others I'm not thinking of. 

Some notifications make sense: RNLs, RALs and FCDLs appear in the news feeds for both the organization and the relevant form. But why don't FCDLs appear in the feed for each FRN? Nothing seems to appear in the FRN and FRN line item news feeds, so why do they exist?

But RFCDLs do not appear in the news feed of the form(s) to which they pertain, only in the organization's feed. Appeals, too.

In the case of a consortium, the notifications appear in the consortium's news feed, but not in the feeds of the organizations which belong to the consortium.

You know what I use news feeds for? Absolutely nothing. If an email gets lost, we'll pick up whatever the notification was about in some other way. 

Well, they did ask

 Want to give Congress a piece of your mind about the E-Rate program? Now's your chance.

The Congressional Universal Service Fund (USF) Working Group has put up a form to submit comments. (You can also email comments to USFWorkingGroup@fischer.senate.gov.) The questions are pretty wide open, so you can let Congress know how you feel on any USF-related topics.

For me, nothing springs to mind for the questions in the Effectiveness section, but the Reforms section has my mind whirring.

The first question:

What reforms within the four existing USF programs would most improve their:
- Transparency;
- Accountability;
-Cost-effectiveness;
- Administration; and 
- Role supporting universal service?

Transparency: How about making public the 700-page book of procedures for handling applications?

Cost-effectiveness: Cut the top discount rate to 65%.

Administration: Stop making applicants go out to bid for $1,000-a-month Internet. Wait, what am I saying? Get the FCC entirely out of the business of regulating the purchasing practices of local government entities.

Role supporting universal service: Triple the C2 budget for applicants. The current level is completely inadequate.

Second question:

 What reforms would ensure that the USF contribution factor is sufficient to preserve universal service?

Expand the revenue base; most of the increase in the contribution factor is due to a decrease in the contribution base. ISPs are the main beneficiaries of the E-Rate program, so they should be paying into it. I mean, voice service isn't even eligible any more, so why should voice service alone pay into the fund? Let's toss in big edge providers, too, who benefit mightily from school children learning to use the Internet.

 

Third question:

What reforms would reduce waste, fraud, and abuse in each of the four USF programs? 

Looking just at the E-Rate, getting the FCC out of regulating purchasing would help cut waste by allowing schools to have service providers suggest configurations before going out to bid; applicants could choose the most cost-effective configuration, not just the only configuration they happen to know of.  I think requiring electronic deposits for reimbursements has made fraud much more challenging. To cut fraud further, require that applicants use an E-Rate management professional; since E-Rate is all we do, we can spot shady deals, and since our entire livelihood is the E-Rate, we steer well clear of fraud. To cut abuse (and waste), cut the top discount to 65%.

Fourth question:

What actions would improve coordination and efficiency among USF programs and other FCC programs, as well as broadband programs housed at other federal agencies? 

Oh no, don't tell me overbuilding is going to come up in Congress, too. Seriously, I can't think of any efficiencies to be gained by coordinating the E-Rate with the other USF programs. 

Sixth question (I skipped #5):

Is the USF administrator, the Universal Service Administrative Company (USAC), sufficiently accountable and transparent? Is USAC’s role in need of reform? 

According to the FCC's response when I made a FOIA request, USAC's routine processing of applications is a law enforcement action, so their procedures are secret. Make those procedures public.

That's enough ranting for now.