Imagine if it were every year

The FCC's unjust rollover of $650 million into the E-Rate program for 2007-2008 has had a happy result: USAC has requested approval to fund Priority 2 down to 83%. Amazing to have it go down to 83% so early.

The dark side: the gutsy appeal from the Gallup-McKinley County (NM) Public Schools (apparently penned by E-Rate Central's George McDonald), saying that the 2006-2007 denial threshold of 86% was unnecessarily conservative and should be lowered. Gallup-McKinley bet on the denial threshold being 85% or lower. (The 2-in-5 Rule was supposed to get funding to lower the threshold, and no one knew yet what a failure it is.)

It looks like Gallup-McKinley had the good sense to submit an application for the same equipment for 2007-2008, but they lost $2.7 million in maintenance funding. If they had grouped the 90% schools together with perhaps one or two 80% schools or admin buildings with lots of infrastructure, they could have gotten most of that $2.7 million.

Which brings me back to what the FCC should have done with the money: let it sit until September, and then announce the denial threshold for the 2008-2009 funding year at the same time that the Eligible Services List is released. With all the extra money, they could have announced an 85% threshold with confidence that there would be some money left over. In subsequent years, they could fine-tune the process for setting the threshold. Imagine: every year, 60 days before the opening of the window, we'd know what was eligible and what applicants could get Priority 2 funding.

They could also do really the right thing: cut the top discount for Priority 2 to 75% (and scrap the 2-in-5 rule). 75% is still a very nice discount for needy districts, but the 25% "co-pay" would cut a lot of waste, fraud and abuse. And it would free up some money for the rest of the applicants.

Vangent?

The last email I got from the Problem Resolution team had a return address ending in vangent.com, and a recent return receipt for a form submission was stamped Vangent. Vangent? I never heard of them; wasn't Pearson opening envelopes in Lawrence, KS? So I looked it up, and found that Pearson sold off their government services division, and it got the new name Vangent.

The new company apparently kept the contract from Solix (née NECA Services) to manage document flow. Here's a description of what Vangent does, where Vangent says they "operate a contact center on behalf of Solix." Does that mean calls to the Client Service Bureau are actually answered by Vangent employees? I knew they weren't USAC employees, but I always thought they were Solix employees. I guess I underestimated the penchant for subcontracting in this country.

Get your sled dogs ready

The countdown to the gold rush has reached one week! On July 23rd, registration opens for this fall's USAC training sessions. There are only 250 seats for each session, and only 7 sessions, so the training sessions typically fill up very fast; I seem to remember it only took a few hours last time. I wonder if I can get on at 12:01 am....

I was thinking this morning that I wish they would run a training just for consultants. The level of questions would be excellent.

Set the ESL free

Why is the FCC holding the the proposed 2008 Eligible Services List (ESL) captive? A phone conversation today reminded me that it's time for the proposed ESL to be posted for comment. As I described last year around this time, the FCC should post the proposed ESL in June. USAC delivers the proposed list in the spring, and the FCC doesn't seem to make many changes to it, so why hold it?

The schedule that the FCC has been using is unfair for two reasons. First, they compact the comment period to one week. I'd like to see the proposed list released June 1, with a month of comments and two weeks of reply comments.

Second, the period between the release of the ESL and the opening of the window is too brief. Because after the list is released, applicants have to work out what is going to go on their Form 470, and the 470 has to be up 28 days before the window opens. The final list should be released October 1, with the 471 window opening Dec. 1 and closing Feb. 15.

Release the ESL!

Site visits random? No.

The official line has always been that the BearingPoint Extended Outreach Site Visits are randomly assigned based on recently paid invoices. There is supposedly an algorithm that is randomish, but takes into account that some FRNs are invoiced more frequently than others, etc. If such an algorithm exists, it isn't working.

Recently, I was browsing the latest quarterly report from BearingPoint to USAC, and the bottom of the table on page 8 jumped out at me. It breaks down how many site visits are done for each Category of Service. What struck me: more than half of all Site Visits are for Internal Connections FRNs. So I went back to my database of all FRNs and looked at what percentage of funded FRNs are Internal Connections. In 2004, it was 13% of funded FRNs. In 2005, 10%. If you look at the dollars disbursed, it's closer in 2004: 41%. In 2005, though, it dropped to 23%. Meanwhile, telecom FRNs are under-visited: about a quarter of all visits, but a two thirds of all FRNs (and half of all dollars). You can see the tables here.

I think this is good. Internal Connections is the biggest source of waste, fraud and abuse is, so that's where SLD scrutiny should be focused. Site Visits are a good tool for reviewing equipment purchases, because they can see that the equipment is actually installed and working.

But the SLD should come clean: the Extended Outreach Site Visits are being used as audits, and they are targeted at Internal Connections FRNs.

Too complex - ya think?

So I'm looking at the folder with all my downloads from the Data Request Tool, and I notice that the files for 2007 are about half the size of the files for previous years. At first I thought my autodownload was failing, so I took a look. Everything seemed OK, and then it hit me: there were no comments yet. So a significant portion of the database file is the comments that go in whenever an FRN is modified or denied. With the length of that field growing, probably more than half of the data we download will be descriptions of why applicants aren't getting the funding they applied for.

I don't make too much of that: the FCDL comment field is by far the largest, but it is another indication that the program is too complex. So I did a quick query on 2005 FRNs and it looks like about a third of all FRNs (covering over half of the funding requested) had comments. That seems like a lot of work for PIA.

The application process needs to be simpler. A while back, the FCC was looking for program goals. One goal should be to simplify the program. Here's an objective for that goal: fewer than 10% of applications should require any adjustment by PIA. I figure 10% of applications will require adjustment due to clerical error, but I think most of the adjustments result from applicant confusion.

If the rules were simple enough that applicants could understand them, it would save USAC a lot of money on the contract for PIA review.

Priority 2 - huzzah!

I got my first FCDL (funding approval letter) for a Priority 2 application today. What a wonderful feeling! If we could get funding like this every year, at least the 90% applicants would be able to implement their maintenance agreements close to the start of the funding year, instead of going without maintenance for most of the year until the funding is approved.

Of course, part of the reason that the Priority 2 funding is coming out so early is the FCC's surprise rollover of $650 million. And we can't count on that every year.