Wave upon wave

Another new record for this year!  Today's USAC News Brief says, "USAC will release FY2012 Wave 2 Funding Commitment Decision Letters (FCDLs) July 11."  So Wave 2 is coming out 1 day after Wave 1.  I don't think I've ever seen back-to-back waves.

This announcement makes me feel better about one of my gripes concerning the FCC's announcement of Wave 1.  See, by announcing on June 28th what would be in Wave 1, the FCC ensured that none of the applications which cleared PIA between June 28th and July 10th will get an FCDL until the second wave of funding, since the amount of the first wave was fixed in the announcement.  So some applicants are actually going to get a later FCDL, just so the FCC could try to save face by announcing future funding commitments before the start of the funding year.  The back-to-back waves all but solve the problem by making the delay only 1 day.

I originally held myself back from commenting on the FCC's announcement, but today I'm feeling the snark.

First, the tone is a crack-up: "USAC releases...Record Commitment of $646 million."  The whole thing reads like a glorious success, when in fact, it's a miserable failure.  The headline should read: "USAC fails to release any commitments by the start of the funding year."  Instead of "More applicants will receive funding commitment decisions in this wave than any other wave in the program history," it should say, "Never in program history have applicants waited so long to receive funding commitments."  And they even make the $5.24 billion in requests for 2012-2013 seem like a sign of a successful program, instead of the beginning of a long, slow, ugly funding shortage train wreck.  George Orwell could not have written it better.

Second, the tense needs to be corrected in the headline.  See, July 10th (or 11th) is in the future.  So the press release should have started with "USAC Will Release...."  They got the tense right in the rest of the release.

By the way, there was one interesting piece of information in the letter: just over half of applications are in the first wave.  The press release says that "USAC will send over 23,800 letters" and that 46,838 applications were received.  So the first wave will fund half the applications, but commit less than a quarter of the funding for the year.  Looks like it's a good year to be a small applicant.

ESL getting worse

Hey, the new draft Eligible Services List (ESL) has been posted!  I haven't had time to look at it, but I'll give my ill-considered opinions based on the press release.

The press release lists 3 changes, which I'll deal with in reverse order.  The Cliff's Notes [for readers under 30, that's what us old fogies used before SparkNotes] assessment of these 3 changes: the first is meaningless, the second is dishonest, and the third is terrible.  Detailed griping:

1. "Commercially available" is back in.  They took it out last year, but put it back in for clarity.  Oh, please.  The lack of clarity has nothing to do with the phrase "commercially available" and everything with the distinction the FCC is making between "telecommunications services," which must be provided by a common carrier, and "telecommunications," which can be provided by any company over fiber.  The ESL makes it sound like I could offer phone service over fiber without being a common carrier.  The distinction is hopelessly muddy, and "commercially available" doesn't help.  Really, what would a "non-commercially available" service be?  If it's not commercially available, how would applicants obtain the service?  This is the worst kind of jargon, because it masquerades as normal English.
2. They removed citations to the orders, rules, etc. which underlie the eligibility rule to "streamline" the document.  Sorry, that's not "streamlining" the rules; it's "obscuring" the rules.  I'm all for simplifying the rules, but I'm opposed to hiding the complexity of the rules.  Because if people could see how complex this program's rules really are, they would demand real changes.  [And until the changes happened, applicants would be scared into hiring a consultant.]  I think every eligibility determination listed in the ESL should have citations that allow applicants and service providers to see the basis for the determination.
3. And now the big one: they want to divide Priority One eligibility into 3 categories:
   1) Communications connectivity
   2) Voice services
   3) Other designated and related services
   Yup, the old "Telecommunications Services" and "Internet Access" categories would be gone.
   And that idea is terrible for the following reasons:
   
   1. The Form 470 and 471 still have the old categories.  So now applicants will have less idea where to put services on those forms.  Any change to the ESL categories should be coordinated with a change in the forms, and since changing the forms involves public comment and OMB approval, it isn't going to happen for 2013-2014.  If the FCC wants to mess with the categories, they should start by announcing a change to the forms, and get that wrapped up before changing the ESL.  The 3 proposed categories do not align at all with the categories on the form, creating more confusion, not less.
   2. The categories suck.  There is only 1 distinction that matters for Priority One: services that have to be provided by a common carrier, and those services that can be provided by anyone.  Once upon a time, that distinction coincided nicely with the "Telecommunications" and "Internet Access" categories.  Then along came VoIP and dark fiber, and now it's all muddy.  But these new categories really stir up the muck, since they each contain both "Telecommunications Services" and "Information Services" (to use the FCC's old terminology, rendered useless by the FCC's inability to decide where VoIP belonged).

What should the FCC do?  Well, if they want to keep categories, they should:

1. Change the Form 470 and 471 for 2014-2015 so that they have 2 categories of service in Priority One:
   1) Services that must be provided by companies that file a Form 499
   2) services that can be provided by  companies that don't file a Form 499
2. Reorganize the 2014-2015 ESL to make clear which Priority One services must be provided by Form 499 filers.

We'll use the Form 499 distinction, because "common carrier" and "Eligible Telecommunications Provider" got too murky, so it will be clearer to distinguish companies by whether they file a Form 499.  That's the terminology used in USAC's SPIN Contact Search tool, so let's try to be consistent.

But an even better solution would be to get rid of categories entirely.  Don't make applicants keep track of the regulatory status of service providers.  Applicants just apply for eligible services, and get funded.  If it turns out that a service that should have been provided by a Form-499-filer was provided by a company that does not file a Form 499, take it out of the hide of the service provider, since they shouldn't be providing those services.  Really, why should applicants have to get involved in service provider compliance issues?

Can Genachowski pull a Lombardi?

So while everyone is focusing on the start of the next funding year, June 30 is important for another reason: it's rollover time.  Thanks to the Third Report and Order, Part 54.507 of 47 U.S.C. now says: "On an annual basis, in the second quarter of each calendar year, all funds that are collected and that are unused from prior years shall be available for use in the next full funding year."

The second quarter ends June 30th.  But don't expect to hear a peep from the FCC.  I've already predicted that the FCC will let unused funds pile up until it can carry over enough funds to cover all the Priority Two requests from 90% applicants for 2012-2013.

At the very least, look for the FCC to run out the clock for the first half, then go into the locker room at half time and try to figure out what to do about this funding shortage.

0 FCDLs? WTF!

It is beginning to look like this may be the first year I can remember in which not a single FCDL (Funding Commitment Decision Letter) will be issued before the start of the funding year.  E-Rate Central's News Brief predicts that funding will be approved this week with FCDLs issued next week.  Well, next week is already July.

I expected FCDLs this week, so USAC (and the FCC) could avoid the eggy face of having no approved funding at the start of the year.  

Why the long delay?  PIA was on the ball this year, and there are a lot of applications that completed review months ago.  The FCC approved the secret application review procedures back in April.  Word from USAC in early June was that they were working on systems issues and awaiting FCC approval to run the wave.  

Maybe having systems issues hold up the first wave so long will light a fire under whoever is holding up the overhaul to USAC's creaky codebase.  Mel Blackwell promised the upgrade in the 2009 trainings, but none of the promised improvements have been made yet.

Don't hold your breath, though.

VPN? NFW!

Really?  This is the suggestion you want to move forward with?

Those who have the misfortune to read this blog on a regular basis (well, I guess I can't really call my posts "regular," but you know what I mean) know I've been turned into a SECA fanboy by this filing and this one.  Both of those filings were full of important and timely suggestions.

Instead of considering those changes, the FCC is asking for comments on SETDA's request to make remote VPN access from ineligible locations eligible.

I didn't bother to comment on SETDA's request because it's so insignificant.  First of all, VPNs are on their way out.  Everything is being webified, so the use of VPNs for remote access is going down.  Since VPNs were never all that well used in schools, it doesn't have to go down much to get to zero.  Second, those few schools with remote VPN access would be able to allow remote access from ineligible locations by claiming ancillary use.  So this proposal deals with an infrequent problem that already has a solution.

But since the FCC is asking for comments, here's mine:

Step away from the VPN.

Remember when Web hosting was first introduced?  It seemed like a good idea. Then a whole cottage industry popped up providing value-added Web hosting with a 10,000% markup.  VPN rules would make remote access to applications eligible, and those same Web hosts would increase their functionality and price.  And new cottage industries would pop up, offering schools functionality they don't need, and the E-Rate funding encourages schools to go for it.

And this proposal increases the digital divide.  Students whose families can afford broadband Internet access and a home computer will have access to school resources.  Students whose families cannot afford Internet access will be denied access to those resources.

Let's look at SETDA's reasons for making VPNs eligible:

1. Give students access to content from home.  First, most of this stuff should be webified without much cost.  Second, if student access to resources from home is eligible, shouldn't the student's home Internet access costs be eligible?  Make VPNs eligible, and you've put an ugly can of worms in the can opener....
2. Filter student access.  The only way that works is if parents agree to allow the school to configure their computer to force a VPN connection and disallow all other Internet access.  See, to get to the school's VPN, the home computer has to go on the Internet.  So the user can access the Internet without ever connecting to the VPN.  Computers can be configured to force a VPN connection, but I'm not going to let my school lock down the computers in my household.  To say nothing of the expense of configuring all those computers.
3. Track student usage.  What?  How are schools going to use data on which websites students and their parents access from home?  I would not be happy to share my children's Web browsing with the school district, and I definitely don't want to share my addiction to online sudoku with them.

What SETDA mentions, but does not state outright, is that this would be useful for districts with 1-to-1 initiatives.  If I were a tech director giving out laptops to students, then I would want to configure them to force them to connect to the VPN and only browse the Internet through the school's infrastructure, both for content filtering and to reduce the chances of the computer getting infected.  So maybe I could see allowing schools to set up remote VPN access for school-owned devices.

But a school with a 1-to-1 initiative and this sort of VPN is going to find itself in the unusual position of needing more Internet access in the evening.  Because student Web browsing is going to use twice the normal bandwidth going through the school VPN (ignoring any overhead from encryption or connection management), because every page a student loads has to come in through the school's Internet connection, then go back out over the Internet connection to the student.  I can't speak for other kids, but mine definitely use the Internet more outside of school than inside.  I think they watch more TV shows on the computer than on the TV.  Those video streams would have to come in from YouTube to the school, then back out from the school to my kids.

Giving VPN access to students from home will force schools with 1-to-1 access to increase their bandwidth to handle their after-school traffic.

Even districts without 1-to-1 initiatives may run into problems.  If a district has reasonably affluent families, then a lot of kids will use the VPN to get at their school files from home.  Junior will want to tweak his PowerPoint presentation from home, and of course the presentation will include lots of large graphic and video files.  That monster .pptx file is going to eat up school bandwidth when Junior opens it and every time he saves.

Schools will have to increase Internet bandwidth to handle all the traffic outside of school hours, which will mean increased demand for E-Rate funding.  We really don't need to increase demand.

So to the extent this change will have any effect, it will:

1. Provide incentive for schools to invest in a fading technology.
2. Increase the digital divide.
3. Increase bandwidth needs, thereby increasing funding demand.

Step away from the VPN.

Who are these people?

Time for retinal scans over at the FCC, because they are just not acting like themselves.

Faithful readers will know that I like nothing better than beating a dead horse, and one of my recurring snarks has been that the FCC never makes its own deadlines, which I find especially ironic when they are denying people for missing a deadline.

So when I began reading yesterday's appeal decision, I started winding up my rhetorical bat: they denied 8 appeals because the appellants missed the deadline.  "Oh, goody," I thought, "plenty of fodder for a tirade on how the FCC never makes deadlines; I'll smack this one out of the park."  I skipped to the appendix to see how many years ago the appeals were filed.

Holy crap!  All the appeals were filed in the last 60 days.  Well, I guess I'll just drag my bat back to the dugout while muttering a defeated "Way to go, FCC."

At least I still have the 2-in-5 Rule and Cost-Effectiveness Reviews to kick around.

Secret Rule Changes

Here's an appeal decision that changes a rule, only no one knows it, because the rule is secret.  I mean, this rule wouldn't even be in the 700-page tome of secret rules.  It is a rule that dare not speak its name.  It's only known to those of us who have watched enough FRNs go into the USAC black box that we can discern how things are done.  And to send something into this particular black box, you had to have had a COMAD recovery, which means few people have much experience with it.

Up to this point, if USAC needed to recover funds (if they COMADed an FRN which already had disbursements, usual the result of an audit), they would go after whichever party submitted the voucher.  So if the service provider filed a SPI, USAC would pursue recovery from the service provider.  If the applicant filed a BEAR, they'd go after the applicant.

That's a little surprising, since in the Fourth Report and Order, which set the rules for recovery, the FCC said, "recovery actions should be directed to the party or parties that committed the rule or statutory violation in question."  But in a lot of cases, it's tough to say who violated the rules, so USAC seemed to be just going after whoever filed the invoice.

I gave a presentation on selecting a payment method yesterday, and I listed this practice as an advantage to choosing discounts over reimbursements; if you choose to have the service provider do a SPI, in the unlikely event of recovery, USAC releases the hounds on the service provider.  I guess the FCC heard me, because the same day, they pulled the rule out from under me.

In this appeal, the service provider installed a bunch of equipment in a charter school and submitted a SPI and got paid.  Later, USAC discovered that the school had closed before the equipment was installed.  Since the invoice was a SPI, USAC pursued the service provider.  (Actually, since the violation occurred before the Fourth Report & Order, USAC properly followed the COMAD Order, which said USAC should always collect from the service provider.)  The service provider appealed, saying it had no way of knowing the school was closed.  And the FCC agreed.

I'm afraid this means that in the future, USAC will feel obligated to try to figure out who was at fault, and pursue that person.  So a secret rule may just have changed.  Of course, we won't know if the rule has changed until we've seen enough recovery cases to discern what rules are in USAC's black box.

Meanwhile, this appeal covers more than half a million dollars in funding that USAC is now supposed to recover from a non-existent school.  Bummer.  And I wonder what happened to the equipment, which was worth $560,498.52?