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Four Things FCC Can Do Today to Enhance E-rate

Increasing the E-rate funding cap and reforming the Universal Service Fund is not something that the FCC (or Congress) takes lightly. Translated: USF reform may take some time.

In the interim, schools and libraries need Internet access like never before and they are submitting their E-rate discount requests for Funding Year 2014 right now. Therefore, while the FCC is considering long term changes to the program — like allowing more funds into the program – here are four improvements that can be adopted now. These changes can all be done this year — with minimal controversy and at very little cost – producing meaningful improvements today while we wait for the E-rate program of tomorrow.

Prioritize limited funds based on need, not technology

Current funding rules treat all schools and libraries the same, regardless of their need. As Education Superhighway recently stated in the New York Times, a significant portion of E-rate discounts currently go toward “plain old telephone service.” At a time when applicants are clamoring for networks to help them connect their students to the Internet, it makes no sense that we force them to spend a limited pool of discounts on phone service. Give applicants the choice to set their own priority. It will immediately enhance the efficacy of the program by putting E-rate dollars to use for only the highest priority needs at schools and libraries.  We estimate that this change alone will, de facto, eliminate most funding requests for plain old telephone service but without the controversy of removing voice services from the Eligible Services List.

See Exhibit A page 2-3 of the Reform Coalition NPRM Comments for the specific changes that can be made  today. This will eliminate the current funding cap system and replace it with something far more effective.

Set a predictable date for the FCC Form 471 filing deadline

Each year, schools and libraries plan procurement activities and schedule contract awards based on the FCC Form 471 filing window; but there is a catch: when the application planning process starts, applicants and service providers do not know the deadline. This creates undue stress and strain. Want to make the program more predictable for stakeholders and lower the stress for everyone? Set an annual filing window date. This simple change will immediately improve the program.

Funds For Learning proposed the following filing window schedule:

OPEN: 12:00am ET on the third Tuesday in January

CLOSE: 11:59pm ET on the second Tuesday in March.

See Exhibit A page 4 of the Reform Coalition NPRM Comments for the specific proposed edits to the FCC regulations.

Allow E-filing by Third Parties

Free up USAC’s resources and reduce administrative costs by adopting an e-filing standard. USAC has plenty of work to do managing application review, issuing payments, and conducting audits. These are functions that are central to USAC’s mission and only USAC can properly fulfill these responsibilities. But the design of form preparation software is not a core competency that USAC needs to maintain.

The private sector stands ready and able to provide these solutions. As far back as 2004, a proposal was submitted to USAC, co-authored by Funds For Learning and E-rate Central, for an industry standard e-filing capability. If the FCC were to establish an e-filing standard, it would allow USAC to focus on what it does best: issuing FCDLs and maintaining compliance. Meanwhile, third-party developers would be unleashed to develop cutting edge tools to help applicants prepare and track their E-rate paperwork. Of course, applicants would benefit from the latest technologies, but they would benefit from the accountability that comes when using a third-party filer – if the system crashes or does not work, the applicant can find someone else who can get the job done.

An industry task force can convene this spring, develop an e-filing standard with USAC, and, by this fall, electronic form submission and tracking for FCC forms could be in place to benefit all applicants, increasing the accountability for applicant web site experience while reducing the burden on USAC.

Adjust the Criteria for Payment Audits

The Payment Quality Assurance (PQA) program has proven to be a significant improvement over previous approaches to auditing payments. The FCC should tweak the system and allow USAC to apply more common sense review criteria. For example, Funds For Learning has recently participated in an exhaustive PQA review for a $36 charge. USAC should be given greater latitude to invest its resources (and to protect an applicant’s resources) in areas where the threat and scope of improper payments is the greatest.

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