Redirecting thoughts

In a discussion of FFL's proposal to implement a per-student cap on funding, a colleague said, "Eliminating services from the ESL ... does not help applicants fulfill their need to connect students."  And that got me thinking deep thoughts about eligibility.

In deciding whether something should be eligible, I've always followed the "necessary to transport voice, video or data to classrooms or public areas of a library."  But the quote above has me thinking maybe the rule of thumb should be "necessary to connect students or library patrons to the Internet or PSTN (Publicly Switched Telephone Network)."  At first glance, they look like pretty much the same thing, but there are some important distinctions.  My recent posts about tossing voice service and cell phone service out of the program have pointed out that students never get to use phones, so they shouldn't be funded.  I guess my thinking has been moving this direction for a couple of months.

Evaluating eligibility of services based on their usefulness in connecting a student or library patron would result in some changes in priorities.  Since voice usage almost never involves a student or patron directly, those services should be gone, or at least low priority.  Bandwidth, Internal Connections and Maintenance, on the other hand, are necessary to connect students and patrons.  (Internal Connections and Maintenance are only partially used to access the Internet or PSTN, so they should be partially eligible, or at a lower priority than bandwidth.)  Does your email server only have mailboxes for staff?  Sorry, not eligible.  Your students mostly use the network to print their Word documents or save their PowerPoint presentations to the server?  Sorry, your network is mostly ineligible.

I like it.  Let's redirect the funding at students and patrons, and away from staff.  The net result probably wouldn't be a big change, but it sure would be nice to have administrators at every level given an incentive to focus on students and patrons.

A wave on the horizon

A Special Edition News Brief has announced that USAC ran a funding wave last Friday, but that the letters won't be coming out until the 29th.  That's 12 days to print 12,023 FCDLs.  It seems really slow.  What, are they using typewriters over at USAC?

Now I have to know how many typewriters they'd need.  A good typist can produce 60 wpm, a typical page has 250 words, so that's about 4 minutes/page.  An FCDL is 2 pages of useless boilerplate, followed by one FRN/page, but each of those is only half a page, so let's use one page per 2 FRNs, and since the first wave will largely be small, simple applications (averaging just over $10,000 total), let's say 2 pages of FRNs.  So that's 4 pages, which should take a typist about 16 minutes.  Let's make it 15 minutes so I don't have to get out a calculator.  That means 4 FCDLs per hour, or 30 per day (let's give our typist a half hour for lunch).  Let's put 3 shifts of typists on each typewriter; that gets us 90 FCDLs/typewriter/day.  In 12 days, each typewriter could produce 108 FCDLs.  I'll round that down to 100 FCDLs to avoid using a calculator, which means USAC would 120 typewriters staffed by 360 typists.

Anyway, no complaints from me.  It's great that the first wave will come out in May.  Even better, all these applications sailed through without any questions from PIA to applicants, apparently thanks to the new streamlined application processing rules.  It's impressive that a quarter of 471s have been processed.  True, only about 5% of the requested funding is in the first wave, but in a way that's good; it follows my suggestion that application review of FRNs under $3,000 (half the FRNs in the program) should be a spell-check.

Let's hope PIA is streamlined for the larger applications, too.

Grab your surfboard!

The first wave can't be far off now.  The FCC has approved a rollover of $450 million into FY 2013.  Now there is more than enough to cover Priority One funding.  So all we need is for the FCC to say, "Go!" and the first wave will hit.

There still isn't enough to cover Priority Two for 90% applicants, but we knew that would be a problem.

This is the first time since 2008 that the FCC has actually complied with Section 54.507(a)(3) of the Commission’s rules, which says that the rollover will happen in the second quarter.  Of course, now they're looking at either a rule-bending second rollover, or have insufficient funds to cover Priority Two for 90% applicants.

But still, this is good news.  Warm up your 486 generators; I smell FCDLs on  the way.

A Modest Proposal

OK, Sancho, saddle up Rocinante.  I'm taking on the biggest windmill yet.  I'm going after the holy trinity of "voice, video and data."

I've already said that since only the transport of video is eligible for funding, and video is all transported over data networks, video should vanish from the Eligible Services List.  To continue my holy trinity analogy, there are 3 hypostases (voice, video and data), but only one transport: TCP/IP.  All that videoconferencing gear was only kind of partially eligible, anyway, and video service providers were just trying to shoehorn in ineligible services with unrealistic cost allocation percentages and erroneous interpretations of the eligibility rules.  Let's simplify the program and toss video.  It's small potatoes, but it would simplify the program.

And now the bombshell: voice services should be thrown out of the program.  I'll acknowledge that this is problematic, since voice services provide much of the revenue for this program, but I have good reasons to toss it.

My first argument is the same as the one I used for tossing video: the transport of voice is increasingly done over the data network.  It's especially stark in the VoIP world, where there is no central switch through which all calls flow.  Once a call is set up by the call processor, the two phones toss out data packets which ride the Internet like other data packets (OK, maybe they get QOS special handling).  The VoIP "PBX" (or the hosted VoIP service provider) does not transport the call.  It sets up the call between the two phones, but the call is transported over the Internet.  If you call a POTS line, then the call has to be transported onto the PSTN, but that is generally going to be done by the recipient's carrier, so your hosted VoIP provider is still not transporting the call.

Secondly, Congress said that the E-Rate should be based on this principle: "Elementary and secondary schools and classrooms, health care providers, and libraries should have access to advanced telecommunications services...."  A phone call is not "advanced telecommunications"; voice services are sooo last millenium.  Let's take the scarce resources of the program and focus them on the future, not the past.

Finally, I question the "educational purpose" of voice services.  In every discussion of educational policy, someone trots out this chestnut: it should be all about the children.  All my kids put together have logged about 45 years of school.  That's over 8,000 student-days.  In those 8,000 days, how many times have my kids used a telephone?  I'd estimate 20 times.  Students are not allowed to use phones except in very special circumstances.  If you were able to divide the total of all the phone bills of this nation's schools by the total number of minutes that those phones were used by students, you would get a cost-per-minute that would never pass a Cost-Effectiveness Review.  What about communication between parent and school, you ask?  These days, most of the voice communication from my kids' schools are robocall announcements, and those robocall services are not eligible for E-Rate funding.  Phone calls are not essential to education.

As the E-Rate runs out of money, we should be focusing on technologies that are forward-looking and used directly by students.  Voice services are neither.

There, I said it: No more phone service in the E-Rate program.

Block 4 Eruv

Pondering ways to simplify rules got me thinking: Why do I have to wait three years to transfer equipment between entities if they are both in the Block 4 of the 471 for that equipment?  And why do I have to inform USAC?

The rule was originally created to stop abuse by districts from using high-discount schools as "equipment mills" for the district; they'd buy the equipment with E-Rate funding at the higher discount, then the following year replace it with new equipment, and move the almost-new equipment to a school with a lower discount.  I don't think many schools really did that, because it's a major logistical nightmare, but OK, it's a practice that should be stopped.  (Incidentally, the 2-in-5 Rule stops equipment mills, but we should dump the 2-in-5 Rule.)

If I have a Form 471 that lists several schools, shouldn't I be able to install equipment in any of those schools, and move it around among those schools as I see fit?  So if a school district lists all of its schools (and a couple of NIFs eligible for P2), shouldn't the district be able to move equipment around among those locations?  The locations in Block 4 all contribute to the discount calculation, so if the equipment is bouncing around among entities in Block 4, who cares?  The transfer rules should only apply if the equipment is being moved to an entity not listed in Block 4.

I have been been through audits where the auditor demanded to know where each piece of equipment was originally installed, and then checked to make sure the equipment was still there.  Two switches had been moved, and the auditor recommended that USAC recover the cost of those switches.  That's just wrong.  Applicants should have to show where each piece of equipment is, and it should be in one of the locations listed in Block 4 of the 471, but it doesn't need to be in the building where it was originally installed.

Sun Myung Moon and the E-Rate

Thinking over the "bundled components" NPRM has me thinking about an E-Rate Unified Field Theory, which would unite the rules for:

1. bundled components
2. gifts
3. free services
4. on-premise priority one equipment (O-PPOE)
5. ancillary use
6. cost allocation
7. educational purposes

Some rules I didn't put on that list, and why:

1. 2-in-5: the 2-in-5 Rule should just be dumped
2. 30%: the 30% Rule has already been gutted
3. competitive bidding and bid evaluation: competitive bidding rules should be left to the states
4. cost-effectiveness: this term should be struck from the E-Rate lexicon; the "Cost-Effectiveness Reviews" are really Educational Appropriateness Reviews (or "'Whoa! That's out of hand!' Reviews"); the FCC's cost-effective guidelines (from the Ysleta Order) would be unnecessary if service providers were forced to obey the Lowest Corresponding Price rule

I'd like to add the Eligible Services List, but I don't see a way to include that in a single rule.

The first thing that comes to mind is Funds for Learning's proposal to create a per-student cap on funding.  It creates a simple rule that reduces the need for all the above rules, since the cap promotes the fairness that is the ultimate goal of the above rules.  But to make all the above rules unnecessary, we'd have to take the FFL plan to the extreme, turning the E-Rate program into something more like EETT: "Here's a chunk of money, based on the number of students and percentage of low-income students; spend as you see fit on transmitting voice, video and data to classrooms."  No one is proposing that, especially not consultants, who would become E-Rate dunsails.

I'm a big fan of Ancillary Use.  I've suggested using it to replace the stupid O-PPOE rules.  I've suggested using it to winnow out bundled services and free services.  And the ancillary use rule is just part of the cost allocation rule, so we've got 1, 3, 4, 5 and 6 covered by the current cost allocation/ancillary use rule:
"If a product or service contains ineligible components, it is fully ineligible, unless:

1. The cost of the ineligible components can be identified and removed from the funding request, or
2. The following are true of the product or service:
1. the product or service is a standard product offering, and 
2. a price for the ineligible component cannot be determined, and
3. the product or service the most cost-effective means of obtaining the eligible functionality without regard to the value of the ineligible functionality.”

That leaves Gift rules and Educational Purpose rules.  I can't see a way to work those in right now.  I'll have to sit on that a bit.

Quick, hide that cell phone!

I think the "bundled components" NPRM could be the first NPRM in a while to actually move me to comment. So I was perusing the order, and I was looking at the Appendix, which has all that dense regulatory verbiage that no one reads.  I flipped to the "Description and Estimate of the Number of Small Entities to Which the Proposed Rules May Apply" section, to see if the FCC was listing E-Rate consultants there yet (alas, no), when I stumbled across this dichotomy:
Paragraph 2: "[W]e propose to clarify that beginning with ... fund year 2014, any ineligible components must be cost allocated...."
Paragraph 24: "E-[R]ate recipients had been required to cost allocate ineligible components bundled with eligible services prior to the Gift Rule Clarification Order.... Thus this order merely removes a short-term exemption...."

The first quote is fine, making it clear that there won't be any changes before 2014, but that second quote is chilling.  It seems to be saying that before the Gift Rule Clarification Order came along, applicants were required to cost-allocate the value of cell phone handsets out of any cell phone service funding requests.  If anyone at USAC reads to paragraph 24 of the Appendix and takes it as a mandate for action, we could see a COMAD jihad, recovering funding from every cell phone FRN for FY 2008 (the earliest year inside the 5-year lookback limit) to FY 2010 (since the Gift Rule Clarification Order kicked in for FY 2011).

That witch hunt would mean tens of thousands of COMADs.  But I'll bet it wouldn't collect enough to cover the P2 funding shortfall.

Hopefully no one from USAC will notice that paragraph.  Or read this post.