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July 20, 2015


The E-Rate Central News for the Week is prepared by E-Rate Central. E-Rate Central specializes in providing consulting, compliance, and forms processing services to E-rate applicants. To learn more about our services, please contact us by phone (516-801-7804), fax (516-801-7810), or through our Contact Us web form. Additional E-rate information is located on the E-Rate Central website.

Wave 9 for FY 2015 will be released on Friday, July 24th. Funding for FY 2015 is available for both Category 1 and Category 2 at all discount levels. Cumulative funding for FY 2015 as of Wave 8 is $753 million.

Wave 61 for FY 2014 will be released Wednesday, July 22nd. Funding for FY 2014 is available for Priority 1 services only. Priority 2 funding is being denied at all discount levels. Cumulative funding for FY 2014 is $2.26 billion.

E-rate is not an easy program — nor should it be.

This article is partly an editorial and partly a description of the new complications wrought by USAC’s new online E-rate portal system, the E-rate Productivity Center (“EPC,” pronounced “Epic”), at least in its current early-stage implementation. The article is also designed to serve as a warning to applicants, service providers, and consultants who have not yet created and interlinked their EPC accounts — of which perhaps only 25% or less have done so — that these accounts need to be established before any meaningful E-rate work can be done for FY 2016.

E-rate, like any federal funding program, cannot and should not operate solely on the basis of a school or library asking “Please give me some money,” and USAC responding “Sure; here it is.”  Controls are needed to ensure that the beneficiaries are funded as needed without “waste, fraud, and abuse.”

Unchecked, however, bureaucratic controls tend to multiply, making programs more and more complex. To their credit, USAC and the FCC acknowledge that E-rate should be simplified. Unfortunately, there are other factors at work. For the most part, recent efforts to simplify the E-rate program have been of the “one step forward, two steps back” nature.

Before examining the new problems raised by the EPC portal, let’s take a look back at several factors contributing to E-rate complexity.

One factor is that many E-rate rules and procedures appear to be grounded on two misleading premises, namely:

  1. That the typical applicant is relatively small, perhaps no more than an individual library or a school district with a couple of elementary schools, a middle school, and a high school. Numerically, by applicant count, this premise is not misplaced. But procedures designed for these types of applicants quickly become burdensome for library systems, large city school districts, and regional or state consortia.
  2. That those responsible for E-rate within a school or library have the time, resources, and experience to successfully complete the process as if E-rate was a large part of their job description. To the contrary, except for the largest applicants, E-rate is anything but a full-time job. In the applicant community, much of the real expertise can be found among:
    1. Education Service Agencies (“ESAs”) and library systems helping individual applicants through the E-rate process and/or handling procurement and applications through consortia.
    2. State E-rate Coordinators in many states doing training on a larger scale than USAC, working 1:1 with applicants on specific problems, and helping USAC validate applicant data.
    3. Private consultants working with applicants (and sometimes service providers) of all sizes. At this point, consultants are involved with close to 50% of the number of applicants and 60% of the funding.

A second complicating factor has been the relatively recent emphasis on tracking the impact of E-rate. Although understandable and necessary, this effort requires a lot of data. The burden of collecting that data, and making it more “transparent,” has fallen on the applicants. One result, seen earlier this year, was the significant amount of Item 21 data required in the revised Form 471 for FY 2015. Another example, just now becoming apparent, is the level of detail that will now be required in the revised Form 470 for FY 2016.

A third factor has been the long-growing focus within the rules — and the enforcement of those rules — on a fully competitive procurement process. Rules affecting pre-bid planning, bidding, and gifting have been enacted that, in many cases, exceed both state and federal procurement practices. Applicant fear of funding denial and/or funding recovery only adds to both the perceived and real complexity of E-rate.

One longstanding proposal to simplify E-rate has been the creation of a portal to serve as a central repository of applicant data, an electronic channel for E-rate correspondence, and a streamlined process for submitting forms. With USAC’s new EPC system, portal proposers are now getting a version of what they wished for, but much work remains to be done.

The primary concern at the moment is that the EPC portal is making life difficult for the three advisory groups discussed above which can best provide support for many smaller and less experienced applicants. Broadly defined in portal terms, these groups are, or may need to become, “consultants.”  USAC, for example, has not yet determined how to provide access to applicant portals for State E-rate Coordinators. Most likely, these state coordinators will be required to have portal accounts as consultants. Similarly, ESAs, working individually with member applicants, may need consultant accounts (often in addition to consortium applicant accounts).

For these groups in general, the EPC system presents two major problems.

  1. Both the Access Agreement and the system itself prohibit the use of Internet robots to collect portal data. This means that access to portal data cannot be automated. For example, state coordinators cannot determine which applicants in their states have or have not yet created their EPC portals without searching the list of applicants manually.
  2. Much of the information required to set up an applicant portal — including the list of people authorized to access the portal, entity and NSLP information, etc. — can only be provided and maintained by the account’s Administrator, who cannot be a consultant. This means that a consultant, be it a private consultant or an ESA, cannot do much of the support work that is normally provided.

Resolution of these two problems is apparently some time off. Computerized access to aggregated portal data, although authorized on an account-by-account basis, will require a system and policy change, or the creation of separate non-portal based databases (one example is the new FY 2016 Form 470 search tools discussed in last week’s News Brief). Broader access to the Administrator’s portal rights is not expected for some time. In the meantime, much of the work of setting up and maintaining EPC portal accounts will fall to the individual applicants — a clear anti-advisor/consultant bias.

FCC Seeks Nominations for USAC Board:

The FCC’s Wireline Competition Bureau released a Public Notice (DA 15-824) seeking nominations for twelve positions on USAC’s Board of Directors. The Board is comprised of nineteen members including Chris Henderson, USAC’s CEO, and eighteen representatives of various organizations affected by one or more of the four Universal Service programs. Most specifically, on the E-rate side, this includes three Board members representing schools and one representing libraries.

In theory, the eighteen outside directors have three-year staggered terms, six expiring December 31st of each year. In this case, the FCC is a bit behind. The twelve slots are for Board positions that actually expired at the end of 2013 and 2014, most still filled by the incumbents. From an E-rate perspective, the most important slots up for nominations are:

  1. Two school positions currently filled by Brian Talbott, representing the Association of Educational Service Agencies (“AESA”), and Daniel Domenech, representing the American Association of School Administrators (“AASA”). Both are expected to seek re-nomination. The term of the third school representative, currently held by Julie Tritt Schell, the Pennsylvania State E-rate Coordinator, expires at the end of this year and will apparently be subject to re­-nomination later this year.
  2. The library position is currently unfilled.

Nominations for these positions were previously requested, and are still under consideration. Additional nominations are due by August 17th.

President Obama’s ConnectHome Initiative:

As a companion to the ConnectED program (see our newsletter of June 10, 2013) announced by President Obama in 2013 that, in part, set broadband capacity goals echoed in the FCC’s E-rate 2.0 orders last year, the President announced a new ConnectHome program. The new initiative involves a pilot program designed to support Internet access at home for over 275,000 low-income households. In large part, the new program is designed to address the “Homework Gap” discussed in our newsletter of July 6, 2015. The ConnectHome program will offer “broadband access, technical training, digital literacy programs, and devices for residents in assisted housing units.” 

The S&L News Brief of July 17, 2015, reviewed the tools available for accessing Form 470 data. Access to Form 470 data for FY 2015 or earlier, be it individual Form 470s or database access to broader lists of Form 470s, has long been available on the SLD website. Form 470 data for FY 2016 (for which only a dozen have been filed as of last Thursday), however, had been available only through the EPC portal in a somewhat limited fashion.

Last Friday, USAC added two additional Search Tools to its SLD website providing the capability View an [individual] FCC Form 470 or Download 470 [aggregate] Information for FY 2016. The tool to view an individual Form 470 provides a nicely formatted copy of each form filed, but appears in a list that, in the current format, will quickly become unwieldy.

The download tool, designed primarily for service providers seeking to search numerous Form 470s, is also cumbersome. It produces a ZIP folder that expands into four separate files. To create a single file of aggregate Form 470 data, these files need to be merged based on the Form 470 application numbers. Each file is labeled as a “csv” (comma-separate value), but is actually in a pipe-delimited format that is less Excel-friendly than the more normal comma-delimited format. For instructions on using these files, we suggest referencing online help articles such as “How Can I View a ‘Pipe Delimited’ Excel File In A More Readable Format?