Wherefore art thou firewall?

I can't resist the opportunity to say "I told you so." Back when the Eligible Products Database was introduced, I asked at the train-the-trainer workshop, "What if a vendor certifies that a product is eligible, and USAC certifies that it's eligible, and later it's found not to be eligible? Who will end up paying?" The answer: "The applicant."

Today I saw an appeal where that's exactly what happened. Back when firewalls became eligible, security appliance vendors came out of the woodwork to claim their product was a firewall. I'm a network engineer who understands the eligibility rules, so my clients are safe, but what is a school business administrator to do when a vendor says that their product is eligible, and USAC agrees? They don't cover the difference between "stateful packet inspection" and "behavior-based threat detection" in professional development for educators or business administrators. And the definition in the Eligible Services List was nowhere near as cut-and-dry as saying "Firewall means Network Address Translation and/or stateful packet inspection, but not application-level proxying" (which was apparently the rule when firewalls were first added).

That's why the Eligible Products Database died. Not because it was cumbersome (it was), not because it was largely unknown (it was), but because USAC didn't stand behind it. And at least one applicant suffered.

FCC wants you

I can't remember ever seeing anything like this: the FCC is requesting comment on an E-Rate appeal. On the contribution side of the USF, it seems like the FCC requests comments on all sorts of requests from service providers, but I don't think they've made a request for comments on the appeal of a funding denial in the E-Rate program.

It's a case that's been kicking around for a while. USAC denied the applicants using "pattern analysis" of 470s, which the FCC tossed back in the Academy of Careers Order. So USAC sent out PAIR letters requesting explanation of the similarities. In the Caldwell Parish Order, the FCC decided that the eight applicants which did not admit service provider could not be denied funding, even though USAC did not find their explanations of the similarities convincing. However, one applicant admitted service provider assistance in the creation and posting of the 470, and the FCC denied their appeal.

So the service provider filed a petition for reconsideration, and now the FCC is asking for comments. I may not get around to filing formal comments, but here's what I think:

The whole thing smells a little funny, but the rules concerning service provider involvement in the competitive bidding process stink worse. As I've said before, it's almost Kafkaesque for the FCC to refer to something on a USAC PowerPoint slide from 2001 as if it were a program rule.

What's the answer to this mess? The FCC should get out of the competitive procurement biz. State laws have ample protections against waste, fraud and abuse, and the addition of the FCC's rules just makes things more complicated, not more competitive.

The latest secret rules

The FCC approved the Funding Year 2008 Program Integrity Assurance (PIA) FCC Form 471 Review Procedures on April 10th. The glass half-full view would be that now applications can be approved. But for me, it's more than half empty. First of all, why did applicants have to submit applications by February 6th if the procedures to process those applications had not been finalized by then? PIA has been reviewing applications, I know, but without an approved set of rules, they have been operating on presumptions. There should be a rule that applicants don't have to submit 471s until the rules for processing those 471s are final.

But what really galls me is that the procedures are entirely secret. I don't know how big the procedure book is this year, but for 2006-2007, it was 700 pages long. Which, as I've said before, means most of the rules for the E-Rate program are secret. This for a program where most of the funding requests are for transfers of less than $3,000 from one public entity to another. Do we really need such a large set of secret rules to administer that program?

And those are just the rules for processing 471s. I don't know if the procedures for processing 486es or BEARs are approved by the FCC, but there's got to be a couple of hundred pages there.

No more timeouts

Every now and then, I have something nice to say about USAC's online tools. Today, I come to praise the online Item 21 Attachment.

First, of course, the rant: Why can't I just import last year's attachments? Most of the time, services are similar, so for each FRN, I'd like to opportunity to put in an FRN from the previous year and have all the info pop in. I've just about reached the point where I'm going back to paper, because that way I can just edit last year's and submit it. Also, how about asking for all the info on one page, instead of making me click, click, click to get through the process? And finally, when I click on the link to bring in the amounts from the 471, why does it erase any information I've already put in that page?

Now for the praise: I think the timeout is completely gone. I just ate dinner in the middle of doing some Item 21s, and when I returned, I was able to resume where I left off without any pesky timeout kicking me out. I like it!

Well, isn't that ESPAcial!

Kudos to the E-Rate Service Providers' Association (ESPA) for their comments to the FCC on eligibility. When announcing the last ESL, the FCC said, "this proceeding is limited to determining what services are eligible under the Commission’s current rules and is not intended to be a vehicle for changing any eligibility rules," and suggested, "those comments not addressed in the Funding Year 2008 ESL may be more appropriately filed for the Commission’s consideration in the general proceeding for the Schools and Libraries Universal Service Support Mechanism in CC Docket No. 02-6." Until now, no one had bothered to take them up on that.

Now ESPA has resubmitted its comments along with a cover letter suggesting that the FCC allow the public to submit suggestions for changes to eligibility, instead of the current policy, which is that only clarifications are allowed. Unfortunately, that would throw off the current FCC timetable, which is to get the draft ESL from USAC in March, sit on it for 5 months, release it (unmodified) in August, allow one week for comments, then make an edit or two over the next 2 months, release it in November, and waive its own rule, reducing the time between the release of the ESL from the 60 days (as set in the Third Report and Order) to a week or so.

Resubmitting my ESL suggestions has been on my to-do list for months now, but I don't know if it will ever get to the top of the list. The ESPA submission is a motivator, though.

Gateway gets me halfway

A recent letter made me happy, then I got cranky. Following the FCC's instructions from the Alaska Gateway Order, USAC sent me a letter warning me that a 486 might be overdue.

First, the happy: This is the way the program should work: make a mistake and miss a deadline, and you get a second chance. I don't have trouble keeping track of deadlines, since it's all I do, and I have automated systems to keep me on top of things, but applicants who are doing it themselves just can't keep track of all the deadlines. The 486 deadline was very frequently missed, because it isn't the same date every year, and it's a pointless form anyway. So it's nice that fewer applicants will lose funding because of it.

Now, the cranky: This particular reminder came for a 486 that is required because of an operational SPIN change/FRN split. That is, a funding request where the applicant switched service providers in the middle of the year, so the funding needs to be split between two service providers. Because USAC's database only allows one service provider for each FRN, a new FRN has to be created. And then USAC requires a new 486 for the new FRN. Why? It's not a new funding request. "FRN" is not a synonym for "funding request." An FRN is a database record used to record a funding request. An operational SPIN change does not create a new funding request. So a new 486 should not be required. All the certifications were already given with the 486 for original FRN. The service start date was given in the SPIN change. The 486 is just a waste of everyone's time in cases like this. The new FRN should be covered by the 486 filed for the original FRN.

2-in-5 is 0-4

The "Two-in-Five Rule" fails again. It has failed every year. Man, I hate the 2-in-5 Rule. I've stated my reasons before. This rule has got to go.

USAC just released its demand estimates for 2008-2009. Overall demand is up 16%, Priority 1 demand up 9%, Priority 2 demand up 24%, blah blah blah. But here's the number that jumped out at me: Priority 2 demand by 90% applicants is up 50%. That's exactly the demand that the 2-in-5 rule was supposed to suppress. What a spectacular failure!

With the Priority 1 at $1.95 billion, Priority 2 for 90% applicants at $1.07 million, we're over $3 billion in requests right there. E-Rate Central listed recent approval rates, and showed that for 2007-2008, about 86% of requests are being approved. Assuming that the approval rate for 2008-2009 is 86% (which ignores the upward trend in recent years, but let's be conservative), USAC will need $2.6 billion just to fund the 90% Priority 2 requests. So the FCC had better let this year's denial threshold stand at 83% and start stockpiling cash for next year.

In fact, the FCC had better roll over the $450 million now available into 2008-2009 right now. Otherwise, USAC will not have enough cash to fund any Priority 2 requests for 2008-2009, since it won't have enough income to cover all 90% applicants.

The Priority 2 funding system is broken, and the 2-in-5 Rule just makes it worse.