NPRM goes live

Well, the Notice of Proposed Rulemaking (NPRM) about changes to the Eligible Services List (ESL) was published in the Federal Register today, so that means the comment period closed 9/18 and the reply comment period closes 10/3.


I've got to think the FCC intends to include the changes in the 2009-2010 ESL, which I think means delays in the application window. In a normal year, the FCC releases the ESL for comment in July, closes the comments in August, then sits on it and releases it unchanged in late October. If it takes two months when no changes occur, how long will it take to incorporate changes?

Looks like another year of almost no time between the release of the ESL and the opening of the window. And maybe we'll even be facing a shortened window.

What I'd really like to see is the whole window pushed back a few months. I think it's absurd and wasteful (and in most cases illegal) that districts have to select vendors and sign contracts in January for services that won't start until July at least.

What a difference a date makes

E-Rate Central's August 18th newsletter has an interesting discussion about unused funds, rollovers and denial thresholds.

The first thing that jumped out is that all of a sudden, there is $800 million available for rollover. E-Rate Central made a projection about how big the fund might be for 2009-2010, and at first blush it seems rosy: $3.5 billion available for next year. But compare that to demand, and it doesn't seem that great. For 2008-2009, if you look at Priority 1 requests from all applicants and Priority 2 requests from applicants with a discount of 80% or greater, the demand was over $4 billion. And the Priority 2 demand from 90% schools increased 50% from FY 2007 to FY2008, so I'm betting that even with $3.5 billion in the fund, 80% applicants get diddly for Priority 2.

More interesting was the mention of why the rollover happens the way it does; I hadn't read the rules regarding rollovers for a long time. It all goes back to the Third Report and Order, which created the rollover by changing Part 54.507 of 47 U.S.C. to allow the FCC to rollover funds "in the second quarter of each calendar year." That's why we get the rollover at the end of the second quarter each year. Now imagine if they changed the rule to "each October." That way they'd be rolling the money into the fund before the opening of the window, allowing applicants to make more educated guesses about the coming funding year. It's not as good as my proposal to set the Priority 2 denial threshold before the start of the funding year, but it's a start.

This $800 million windfally provides the perfect opportunity. They could do the rollover for 2009-2010 this October, and it would still be close to a billion dollars. It would require an FCC order pretty soon, so I don't see it happening, but it would be nice....

COMADness

Here's a chilling appeal. It seems the poor applicant got a COMAD for over $2 million from a 2004-2005 Basic Maintenance funding request, because the "maintenance agreement/contract did not specify the location of eligible products or services for which the Basic Maintenance was to be provided." The way I read it, the applicant had a valid contract which listed all the eligible products covered, but did not list the location. And because the location was not listed in the contract, they're out $2 million. That's some serious nitpicking.

Gotta hope the FCC waives this one.

Enough already

Someone has got to stop the ADA madness.

In their latest Washington Update for members, CoSN (the Consortium for School Networking) talked about the Anti-Deficiency Act (ADA). And the news is just depressing.

For those of you new to the program, back in 2004, the ADA shut down funding commitments for about 5 months because it was decided that the ADA applies to the Universal Service Fund, and the ADA is completely unsuited to the way the E-Rate program is funded. The 5-month pause in commitments was ended by a one-year exemption granted by Congress. Since then, Congress has continued to grant one-year exemptions each year.

Now CoSN is guessing that the next exemption will not be approved before the start of the year. I'm pretty sure that the current exemption will expire Dec. 31st, so for at least a little while, funding commitments will be suspended again. That's not such a disaster in January, but really, shouldn't the exemption be permanent now?

Unfortunately, when FCC Chairman Martin was asked by Rep. Markey if the E-Rate needed the ADA, he said no. Mystifying.

And CoSn, which knows a lot more about Congressional politics than I'll ever know, has linked the future of the ADA exemption with the political future of Sen. Stevens, who has been a supporter of the exemption (because he's from Alaska, where lots of schools really depend on the E-Rate to pay for incredibly expensive Internet connections). Unfortunately he's under indictment.

It's time for someone over at the Capitol to pass a permanent exemption, regardless of what Chairman Martin says. It's been 4 years.

86% discount? Sorry, not this year

E-Rate Central is reporting that at last week's USAC board meeting, the projection was that Priority Two requests will only be funded down to the 87% level. (Although at this point the board is only asking the FCC to deny applications at 83% and lower.)

Can we get rid of the 2-in-5 rule yet? Over a year ago, I declared that this rule must go. What is the FCC waiting for? 2-in-5 doesn't succeed in cutting demand, it harms applicants and creates waste.

Alas, we haven't seen the flood of appeals to the FCC due to the 2-in-5 rule that I predicted a year ago. I don't know if that's because most applicants have figured out the 2-in-5 thing, or because the denials haven't really started coming in big numbers yet. So it looks like we'll be stuck with 2-in-5 at least through the 2009-2010 funding year.

Travel blog

Tomorrow I'll be passing through Lawrence, KS. While I have a powerful urge to visit 3833 Greenway Drive and ask for Ms. Smith, I guess maybe she stopped working there back in 2005. Since I don't have any forms to drop off, I think I'll just stay on the Interstate and give them a salute as I pass by.

All in all, a good day

First, the routine: the FCC has released the proposed Eligible Services List (ESL) from USAC, and requested comments by August 14th. That's been the pattern the last couple of years: wait until everyone's on vacation, then give applicants only two weeks to submit comments. But the FCC has made it clear that it only wants comments "limited to determining what services are eligible under the Commission’s current rules." So there isn't much to comment on, really.

Simultaneously, the FCC has released a Notice of Proposed Rulemaking (NPRM) to change the eligibility rules. Commenters have a full 30 days to comment. Here are my preliminary comments on the proposed changes (I reserve the right to show solidarity with our presidential candidates by flip-flopping on at least one of these at a later date):

• filtering software: yes
• a broader classification of basic telephone service: yes
• dark fiber: yes
• text messaging: whatever
• firewall service: yes
• anti-virus/anti-spam software: yes yes yes
• scheduling services: no
• telephone broadcast messaging: no
• certain wireless Internet access applications: no
• interconnected Voice over Internet Protocol (interconnected VoIP): yes

It is wonderful that the FCC is considering the changes. It's a shame the list isn't longer. Some things that should be on the list:

• reasonably redundancy
• filtering service
• anti-virus/anti-spam service

And the FCC should take this opportunity to kill the 2-in-5 rule.

But here's what worries me: the FCC has been closing ESL comments in mid-August, then considering the rather simple comments for 2 months, then releasing the ESL so late that it has to waive it's own rule about giving applicants 60 days between release of the ESL and opening of the window to file 471s.

Let's run the numbers. Let's say we're going to get a traditional 80-day window (OK, so the window has been for shorter lately; I'm a traditionalist) ending on February 5th. That puts the opening of the window on November 17th. Go back 60 days from that, and the FCC should be releasing the ESL around September 18th. Even if the NPRM gets in the Federal Register next week, the Reply Comment period will be after September 18th. So once again, there is no way the FCC is going to follow it's own rules.

I'm afraid we're looking at a very delayed ESL release. Still, I'll put up with some delay if it means a better ESL.