Jedi protecting the E-Rate?

Check it out! George Lucas testified in front of Congress in support of the E-Rate. Here's the transcript of his testimony. Here's a newspaper article with lots of congresspeople invoking Star Wars imagery. In his opening statement, Rep. Ed Markey says that Lucas supported the E-Rate back in 1993, and led Markey to fight for its inclusion in the Telecom Act. I didn't realize Lucas was such a big E-Rate supporter. I take back everything I ever said about Jar Jar Binks.

Now if only we could get Shatner to support the program.

Another interesting E-Rate footnote: in his opening statement, Rep. Markey claims credit for coining the term "E-Rate." I thought Gore claimed credit for that, just like he invented the Internet.

Another $600 million misspent

I shouldn't have used such a pessimistic title, because I think this is good news, mostly: today the FCC rolled over $600 million in unspent funds from the 2002, 2003 and 2004 funding years, into funding year 2008. (Here's the announcement.)

First, my complaint: the FCC should stop changing the size of the fund after the application window has closed. It's unfair. As I've said before, the FCC should take this rollover money and use it to set the Priority 2 denial threshold before the application window.

For the short term, though, this rollover is wonderful news. As I posted earlier, it is likely that USAC will need more than $2.25 billion just to cover Priority Two for the 90% applicants (after paying for Priority One).

The bad news is, this rollover probably isn't enough for USAC to start funding Priority 2. About $1.95 billion was requested for Priority One, and Priority Two requests from 90% applicants totalled about $1.07 billion. That's $3.02 billion. With this rollover, the fund has $2.85 billion. Now some of the funding requests will be denied, so eventually maybe the $3.02 billion will be reduced to $2.85 billion; they'd only have to deny 6% of requests to do that. It seems likely that eventually, 6% will be denied. E-Rate Central did some calculating on this, and 14% of applications were denied in 2007.

But it will take time for USAC to deny $170 million. I'm betting no Priority Two until maybe September.

On the other hand, I would have expected the FCC to do whatever was necessary to find enough funding to allow USAC to start funding Priority Two, so maybe I'm wrong.

A secret step in the right direction

So I just got confirmation that I thought a PIA reviewer had hinted at some time ago: a client's application was approved without submitting any Item 21 Attachments.

The applicant in this case has two small FRNs ($3,000 and $1,000 in funding), both for Telecom Services, both identical to FRNs from the year before. We prepared Item 21 Attachments online, but didn't submit them. PIA never contacted us requesting the attachments, they just approved the FRNs.

A few months back, a PIA reviewer had mentioned that he could use last year's Item 21 Attachment, but since I never heard any official confirmation of that, we've been submitting attachments. And we have gotten requests from PIA, though I can't be sure that any of them were for identical requests. Also, maybe only small FRNs can be approved this way.

This is great news! We're moving closer to something I've been asking for for years now: a "same as last year" button, where an applicant just presses a button and duplicates the funding requests from the previous year.

But why is it secret? This change should be spelled out on the USAC Web site, which still says: "Each funding request on the Services Ordered and Certification Form (Form 471) must include a description of the products and services for which discounts are sought." And it should be the topic of a News Brief. Instead, the June 6 News Brief says: "Remember that PIA cannot review your application without your Item 21 attachment."

Is this just a part of the culture of secrecy? So much of the inefficiency and fear in this program stems from an apparent core belief at USAC and the FCC that if you tell public servants what the application review procedures are, they will use that knowledge to circumvent the procedures.

Or maybe they're just trying to quietly cut small applicants some slack, and I should keep my mouth shut.

Unfunding mandate

Well, it must be Audit Report Day, because another audit just crossed my desk. Unfortunately, this applicant was not an On-Tech client, so they had a couple of "findings" (for those who have the good fortune of never failing an audit, a "finding" means a material deficiency has been found). I'm not going to go into details, but one of the findings surprised me a bit.

The applicant apparently took over 90 days to pay a bill, and the auditor thought that meant the applicant should give back all the money from that FRN.

Based on how long it takes my clients to pay me, I've got to think that a lot of schools and libraries don't make that 90-day deadline every time. I remember looking at this once, and the average time for clients to pay me was like 135 days. Since then I think it's gotten better. The current recordholder? 550 days and counting.

Hmmm, I wonder if we could get the FCC to mandate that applicants pay their E-Rate consultants within 90 days....

Audit final score: couln't run, managed to pass

I got my first draft audit report from the new round of FCC OIG IPIA audits, and it surprised me. Surprised me because it was so brief, and somewhat unclear. It basically boiled down to a form letter and a checklist.

I jumped right to the checklist scanned it, and found 5 boxes not checked. I was ready to blow a gasket, because I knew we had answered all the auditors questions.

But once I read the unchecked items, I realized that in at least 4 cases, the box wasn't checked because the item was not applicable. It's not as clear whether the 1st unchecked box indicates non-compliance or non-applicability.

Then I went back to the form letter, and it said "Blah blah blah [two paragraphs of blah blah blah] In our opinion, management’s assertions that the [applicant] complied with the aforementioned requirements are fairly stated, in all material respects." So I guess all the unchecked boxes meant "not applicable."

I get the impression that this is a standard checklist, so I think it should be revised before they do the rest of the 260 audits this year. At the very least, they ought to have an "n/a" option for the checklist. Even better, in the case of any unchecked box, a brief comment on why the box isn't checked.

Because this is a program fraught with fear, and nothing is scarier than one of these audits.

Searching for the silver lining

The June 16th newsletter from E-Rate Central has an interesting article on the incentives of the E-Rate program. The idea is that the E-Rate rules have created incentives that change school and library behavior in positive and negative ways. They list 3 positive and 4 negative incentives.

Let's start with the negative, because I agree with all those points:

1. The 90% discount creates all sorts of waste, fraud and abuse. Back in 2003, the FCC formed a Task Force on the Prevention of Waste, Fraud, and Abuse. Their report was clear: 90% is just too close to free.
2. The Eligible Services List is not technology-neutral. I agree. It also promotes inefficiency. But at least we get to comment on it every year.
3. The "2-in-5 Rule" is a failure, promotes premature spending, punishes those who lease. This is currently the worst rule in the program. And it was sprung on us with no warning. (Most rules go through a Noticed of Proposed Rulemaking, but not this one.) It has to go.
4. E-Rate support for maintenance by outside personnel provides an incentive to cut district tech staff. That's why I left my last district job: I outsourced all the interesting parts of my job, quit, and was replaced by someone who was an expert in integrating tech into the curriculum, not maintaining technology.

The incentives that E-Rate Central sees as positive, however, I find at best ineffective.

1. Technology planning requirements force schools and libraries to plan ahead. I disagree. If you force someone to write a plan, they'll do whatever's required. But then the plan gets filed away until a required revision. And the E-Rate rules prevent applicants from seeking outside expertise. In my experience, the best way to determine what technology to implement is not a top-down planned approach, but in response to grass-roots demand. The E-Rate, with its long application cycle, makes this more difficult.
2. Item 25 certifications help make applicants mindful of the ancillary expenses in implementing technology. It makes the person who fills out the application mindful of it for a few hours in January, but I don't think that makes much difference. And since applicants are not allowed to include possible grant funds in the Item 25 total, it provides a disincentive to leveraging E-Rate funding with other grant funding.
3. E-Rate deadlines prevent procrastination. Well, OK, in a disfunctional system where necessary tech procurements are put off, E-Rate deadlines will force the procurements to happen. But saying that's a good thing is kind of like saying it's good that my PC crashes often, because rebooting from time to time can help clean crud out of memory. Well, sort of, I guess.

Call me the E-Rate Curmudgeon, I guess. I can't see any real silver linings in these rules.

Burnt offerings

USAC released a preliminary schedule for the fall training, and I am very pleased to see them coming back to NJ!

I think we should schedule a pilgrimage to PIA, which is about 25 minutes from the airport. Of course, we would never be allowed into the inner sanctum, but we could kowtow in the parking lot, and burn Item 21 Attachments as a sacrifice.