Commander Data

Now here's news that of interest to very few people: the FCC has released some E-Rate data in delimited text files.  You can find the data here. (In the ridiculously cluttered interface on that page, hunt for a button labeled "Zip" with a raining-arrow icon, and click on that to download a ZIP file with all the files in it.)

There are 2 data files:

1. OPENDATA_FY2010, which is mostly information available through the Data Retrieval Tool (DRT).
2. FY2010_CommittedFRNs_Block4_Data, which has Block 4 data.

I was pretty excited to see the files, but the result is not as exciting as I'd hoped.

The info I can see that's in OPENDATA that was not already available in the DRT are a field showing if the FRN is under appeal, the date the 471 was cancelled (empty for almost all FRNs), the number of students or library patrons (which I assume is coming from Block 2), and some Rural/Urban info, which I think only flows through from Block 4 in cases where an FRN serves a single location.  All pretty useless.

I've been asking to be able to download Block 4 data since 2006, so that data file would be exciting, except I've already managed to collect this info by other means.  If the data were up to date, and included all funding years, then it would be useful, since it would be easier to collect than the way I'm doing it now, but as it is, I have no use for the file.

I suppose there are very few people who want any of this information and haven't already figured out how to collect it.  And no one will have all that much use for a single funding year of data.

But the FCC made it clear that they intend to expand the availability of data, so this could be the start of something great.

Couldn't happen to a nicer bunch

USAC is calling another audit down on their own heads.  Funds for Learning spotted a USAC RFP for a "risk assessment" audit.  Of course I'm ill-equipped to perform the audit, but I'm happy to supply some of the requested assessments for free.  The list of assessments starts on page 3, and there are 16.  I'll only cherry-pick ones that I can answer without doing any actual work.

(3) Consider the effectiveness of USAC’s E-rate Program procedures in detecting the most significant problems identified in recent E-rate audits....

OK, see now there's a problem right there.  The most significant problems are not identified in audits.  The most significant problems are the ones that put people in jail.  Those are the risks the auditor should be focused on.  The fact that an applicant couldn't find a document proving that the Internet Safety Policy was approved at a public meeting 10 years ago is just stupid compared to a service provider and an applicant employee combining to steal $5 million from the program.

(4) Evaluate GAO’s statement that “[t]he E-rate program’s internal control structure is a product of accretion...."

After careful evaluation, I have reached the following conclusion:  No duh.

(6) Provide specific recommendations on how the application review process might be streamlined....

Here are some recommendations off the top of my head:

1. If you're a public school or library, and the FRN is less than $3,000, PIA review is: nothing.  Approved.  Boom, there goes PIA for half of the FRNs.
2. Cost-effectiveness reviews are just pointless harassment.  Toss them.
3. Toss the 470 and the whole competitive-bidding charade.  It hampers competition and drives up prices.
4. Don't require contracts before the 471 is filed.  It hampers competition and drives up prices.  And oh yeah, it's illegal.
5. Publish the secret 700-page tome of PIA procedures.  Let everyone know what the rules are, and we'll all follow them.
6. If you want third-party verification of NSLP numbers, get them from a third party.  Just sayin'.
7. Every piece of information required to approve funding should be a part of the Form 471.  No attachments, clarifications, etc.  PIA gets the 471, and based on the information collected there, makes a decision.  Yeah, the 471 would have to be ginormous to provide all the information that PIA wants under current procedures, but that's kind of the point.  Force the ridiculous complexity of this program out into the open.  Imagine if the IRS looked over your tax return and said, "Hey, I see you claimed travel to your doctor as a deduction.  Could you send us a list of those trips and any other stops you might have made on the way?"  That's what audits are for.
8. Stop sending out those useless, yet frightening Notification of Form 470 Posted but No Associated Form 471 letters.
9. If you have a beef with a service provider, audit them.  Don't force every applicant to back up every invoice with a slew of bills and/or a service certification month after month.
10. PIA should be required to tell applicants if they're about to lose funding.

(8) Evaluate whether ... audits of service providers, rather than just applicants, should be conducted.

And the answer is: Yup.  Name one case of waste, fraud or abuse that took place without the complicity of some service provider.

(13) ... evaluate whether the computer systems USAC has adopted for inputting and processing applications and invoices is both reliable and sufficiently flexible to incorporate E-rate Program changes promptly and efficiently.

Was it 2009 when Mel said that the entire system was going to be overhauled, which would allow for all sorts of improvements?  Since then, it's been patch, patch, patch.  How many trees died this month to send out duplicate 486 notices?  And we just got a Receipt Notification Letter for a 470 posted 63 days ago.

I'm ever the optimist (stop snickering), so I'm hoping that this audit will provide the grounds for real improvement.  But since it's a one-year contract, I won't hold my breath.

On a tangent completely unrelated to E-Rate, who decided to name a candy bar "Snickers"?  I mean, naming your confection after a snide laugh?  OK, Nabisco had already released "Chuckles," but "Giggles" or even "Chortles" or "Titters" would have been better than "Snickers."

My minimis is bigger than yours

Now this is a step in the right direction.  Actually, it's a giant, jet-assisted leap in the right direction.  Or maybe it's a typo.

Every 6 months, USAC releases a report on audits of the E-Rate program.  If I have a little spare time, I read the whole report, but today I just skipped straight to spreadsheet attached to the report, so I could start grinding my teeth right away.  I've whined again and again about the niggling little amounts that USAC goes out and collects from applicants.  USAC is not supposed to collect if the administrative cost is greater than the amount to be recovered (per the Fifth Report and Order).  Now I have no doubt that the good people at USAC are underpaid, but there is no way that a collection costs less than $276, which is the smallest amount I can see on this report that USAC is trying to collect.

But what's this under 2005?  It looks like 9 applicants were given de minimis exemptions totalling $164,639.  So that means that at least one of those applicants is getting a de minimis exemption for an amount greater than $18,293.  For 2006, the de minimis amount must be at least $2,883 for some lucky applicant.  (For the rest of the years, the de minimis cutoff could be less than $300.  Because USAC only publishes totals for each funding year, there's no way to say what the actual de minimis amount is, only the lowest amount it could be.)

But wait, there is some other applicant in the 2005 column in the early stages of collection for $7,465, and 2006 has the $276 collection I whined about earlier.  That means it is mathematically impossible for the same de minimis standard to have been applied to all applicants in those funding years.

Why am I reading tea leaves on this?  Why isn't the de minimis amount published?  Like maybe in the semi-annual report.  And while they're at it, they could explain where in the recovery process de minimis determinations are made.

But I guess besides me, interest from the public is de minimis.

Your grandfather's dark fiber

Hmm, an appeal decision released while E-mpa® and SECA were holding meetings. Channeling my inner conspiracy theorist, I thought maybe the FCC was trying to slide one by while no one was looking.

But no, it's a pretty boring decision.  Actually, I think the ruling adds some clarity on the eligibility of dark fiber.  In 2002.  The order is clear that they are talking about the 2002 rules, so we can't try to extrapolate to today's dark fiber.

It does perpetuate a part of the "Tennessee test" that only a lawyer could say with a straight face: exclusive use .  Boise ISD built a dark fiber WAN connecting their buildings.  USAC said it wasn't eligible because they had exclusive use of the fiber.  The FCC said, "Boise ISD and IDACOMM [the service provider] did not have an exclusivity arrangement limiting the use of the IDACOMM network to Boise ISD."  Now in this case, IDACOMM probably did put dozens of pairs up on the poles and maybe resold them to others, but the actual pair that Boise leased?  The FCC bought the argument that "IDACOMM retains the right to provision new circuits for additional clients on the fiber currently utilized by Boise ISD."  As a practical matter, to whom are they going to sell a circuit that terminates in a school building?  And how are they going to get someone else's light (and therefore circuit) onto that pair?  The dark fiber must be connected to district modulating electronics (otherwise it's lit fiber, which has regulatory consequences beyond the E-Rate), so how does the service provider put someone else's traffic on that pair?

I find the whole "exclusive use" test to be weird, but it's even weirder to apply it to a dark fiber WAN, which does not have a significant amount of equipment on the client's premises.

But it doesn't matter anyway, since the eligibility of dark fiber has changed drastically since 2002.  Twice.

499 ⇒ !CIPA

So as I cried over the misery of applicants trying to get services into the right category on the Form 471, a weird thing occurred to me: in many cases, the need for an applicant to be CIPA compliant is dependent on the regulatory status of the service provider.

See, when CIPA came along, the FCC decided that compliance was not required for telecommunications funding, which is a good thing.  So they did what seemed logical and easy: you apply only for services in Telecommunications Services (TS), you don't have to be CIPA-compliant; apply for Internet Access (IA) or Priority Two, and you need to comply.  And that pretty much worked.  (Yeah, it was a little weird that you didn't need to be CIPA compliant for a T-1 line leased from a telecom company to connect to your ISP, since its only purpose was to provide access to the Internet, but to get funding for a PBX, which could not connect to the Internet, you had to be CIPA-compliant.  But everyone just looked at the sky and whistled and said nothing.)  But then along comes VoIP and the FCC can't make up its mind if it's a "telecommunications service," so you can put it in either TS or IA.  And then fiber is also allowed to straddle.

Let's look at an example of how that might work out in practice.  An applicant wants VoIP service.  In response, they get a bid from their ILEC and their ISP.  Their ILEC files a Form 499, so they can put the VoIP service in TS on the 471.  But their ISP doesn't file a Form 499, so they have to put it in IA.  USAC will decide the need for CIPA compliance based on which box is checked on the 471.  (The new order which tosses out the distinction between TS and IA, says that box is "one of the checks that USAC uses to determine which applicants need to comply with Children’s Internet Protection Act (CIPA) requirements," but I'm not aware of any other checks.  Oh crap, are we going to get a new type of review from PIA?)

So the exact same service may or may not require CIPA compliance, depending on whether the service provider files a Form 499.

That doesn't seem right.

Telecom apples and Internet oranges

Wow!  Usually the release of the Eligible Services List (ESL) is a yawner: the FCC doesn't make any significant changes, and we already know what's coming, because there is an NPRM showing proposed changes.

But this year, the order accompanying the ESL is a bombshell that goes well beyond eligibility.  They have blown up the old "two priorities, four categories" classification of services.  (Anybody else get a mental image of John Noran doing the Vulcan salute when I said "two priorities, four categories"?)

Now, there is only Priority One.  No Telecommunications Services, no Internet Access, to say nothing of the weird troika of categories that was proposed on the ESL, which I suppose would have given Mr. Noran the opportunity to get his thumb involved in trying to clarify priorities and categories, but was otherwise useless.

I made the case that Priority One should be a single category back when the draft ESL came out, but I was more timid than the FCC, suggesting that the Form 470 and 471 should be changed first.  The FCC was more bold, saying that as long as applicants check either of the Priority One boxes on the Form 470, they can get any Priority One services.  I can't wait: putting Web hosting under Telecommunications Services will give me a dirty thrill, and putting POTS lines under Internet Access will feel so edgy.  (I guess this year, Mr. Noran will do the "Vulcan who wasn't careful with the lirpa" salute.)

So up to paragraph 7 of the order, I'm just thrilled: real reform that makes the program easier for applicants!

And then I hit paragraph 8: "When requesting E-rate funding applicants must continue to select the correct category of service on the FCC Form 471."  Oh, crap.  Of course they have to keep the categories on the 471, because of CIPA.  But now applicants have to figure out whether a particular service has to be in the Internet Access category (which means they have to comply with CIPA).  And since the FCC sheared off that kludgy column with the Telecom and Internet textboxes, you just have to kind of know what goes where.

Oh wait, surely there is guidance in the ESL.  Here it is, right on Page 1, with all that other crap no one ever reads: "CIPA Reminder.  The funding of Internet access in the telecommunications services category does not relieve applicants of complying with the requirements of the Children’s Internet Protection Act (CIPA) if the service request includes Internet access."  What?  That's it?!  See for a normal person, E-mail service is not "Internet access."  Neither is "Web hosting."  And there is nothing in the descriptions of either of those services saying, "Whooop!  Whooop! If you're applying for this service, you must check the "Internet Access" box on the Form 471 and be CIPA compliant."  Or is the FCC saying that only actual "Internet access" requires CIPA compliance, and the other services that were under the old "Internet Access" no longer require CIPA compliance?  I don't think so, but that's actually what the ESL says.

Damn, this order was going so well.  I still can't decide if one bad paragraph spoils a whole bunch good.

Proofreader's note: The preamble of the Miscellaneous section still lists the old 4 categories.  That's OK, no one ever reads that part.

Price wars

Well, looky what's in the News Brief: lowest corresponding price (LCP).  As I blogged back in May, LCP is a requirement that service providers give E-Rate applicants their lowest rate.  E-Rate applicants are supposed to get the lowest price for a particular service offered to any other customer in the service area.

LCP has been sitting in a corner, largely ignored by the E-Rate program.  The FCC put the regs in place back when the program started, and then nothing happened.  Ever hear of USAC or the FCC demanding a service provider lower its price to the LCP?  Me neither.

Well, someone at the Justice Department read the regs recently,and  took legal action  in Indiana, Wisconsin, Michigan and New York.  The only settlement so far is with AT&T in Indiana, where the violations were discovered by a lawyer working for the state. Feds 0, states 1.

So a little while after the 2009 Indiana settlement, which cost AT&T $8.3 million, the FCC got a petition from the telecom lobbying groups to "clarify" (meaning "hamstring") the LCP rules.  The FCC quickly responded with a request for comment in May 2010.  And then LCP returned to its dark little corner.

Then on May 1, 2012, ProPublica publishes an article about the failure of USAC and the FCC to enforce the lowest corresponding price rule.  And whaddayaknow, in the service provider training a scant 10 days later, there are several slides about LCP; in previous trainings, there was no mention of LCP.  Of course, since no one at USAC had given any thought to LCP, the slides basically just quoted the regs.

Now a cynic might say that USAC was trying to fill a News Brief, and as it scraped the bottom of the barrel, it came across the LCP slides, reformatted them, and put them in the brief.  But I am even more cynical, which makes me optimistic.  More cynical in that I believe if USAC and the FCC intended to continue to ignore LCP, they would have spiked the News Brief story.  Because applicants who macheted their way through the dense underbrush of regulatory prose discovered an ancient paradise they never knew existed.

Now that the cat's out of the bag, I am hopeful that many service providers will be hit with requests for LCP. Unfortunately, applicants don't have any way to find out what the CPs are, so they can't really tell if theirs is L.

So will USAC start enforcing LCP?  How?  If it were part of PIA, that would reduce demand.  Just sayin'.