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Show Your Math

As we previously reported, this week the FCC released an E-rate demand analysis showing how the Commission came to its conclusions for many of the new rules taking effect in 2015. In essence, the FCC did what students since the beginning of time have been asked to do: “show your math”.

I appreciate this gesture, particularly in light of the FCC’s current request for comments about the size of the E-rate fund. The analysis makes it easier to discuss, debate, and compare options when the FCC’s facts (and assumptions) are laid out for review.

The FCC’s release of this report illustrates another important principle. “Big data” and statistics are only as good as the extent to which they are made available in a timely fashion. The FCC’s paper will no doubt impact and inform the upcoming debate over the size of the cap. However, its release will not do much to change the 7th Report & Order. The FY2015 budget cap, category system, and ESL changes are all set in motion. Having the FCC’s data in hand will not change any of that. This is not a rebuke of the FCC’s white paper. It’s an observation. Having information after-the-fact may be useful, but, often times, by the time it is available, life has moved on and it may not be as applicable as it once was.

That brings me to the topic of data transparency. In many cases, it is good to have transparency of information, especially as it relates to public funds. But transparency is inherently limited in its ability to proactively shape a program. Let me explain.

Assume that every bit of pricing data is published after the FY2015 funding window. The price of every widget. The cost of every megabit of bandwidth. All of it presented for the world to see. How, precisely, will that help schools get better prices in 2015? It won’t. Not much, at least. Yes, some vendors may lower their pricing because they know their price list will be open to the world. But I don’t see much price inflation in E-rate funding requests.

A big driver behind data transparency is the idea that if an applicant learns that another applicant is paying a lower price, it would encourage them to drive a harder bargain the next time they negotiate a contract. The key phrase there is next time. Or maybe next year. Either way, transparency of the data may help later, but it won’t help now.

Here is where we find the heart of what is on my mind this week. Schools and libraries are feeling the pressure to increase their bandwidth and upgrade their Wi-Fi infrastructure—sooner rather than later. They are behind the curve and they need to catch up as quickly as possible. And they are looking to the E-rate program for support. To set the process in motion, a lot of decisions are being made right now. Applicants are thinking about their technology needs while reading the tea leaves looking for application strategies. Many are considering forming consortia. All of these choices will lead to certain outcomes. Some good. Some not as good.

The Item 21 information and other “transparent data” that applicants receive later will not help them make good choices today. Data after-the-fact is not a substitute for careful planning and analysis today. As a rule of thumb, applicants should not assume that they are getting a good deal. They need to be careful selecting their vendors and evaluating their options. They should seek out professional help, as appropriate; and they should definitely question anyone that alleges to have all of the answers.

I am glad the FCC released their report this week. Their data is likely to shape the next Report & Order. In the meantime, we are all learning to live with today’s new rules. Similarly, applicants can look forward to more pricing information being made available in the future. And again, in the meantime, they have to procure services, make technology choices and choose vendors, and they need to do so to the best of their ability with the information that they have today.

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