Personnel Changes/FCC Seeks Comments on E-rate Reform
Message posted June 21, 2005
George McDonald, Head of SLD, Retires
George McDonald, Vice President for the Schools and Libraries Division of USAC (SLD), is retiring the end of June 2005. George has had the difficult job of running an enormous program, while not being able to set policy (only the FCC can set policy and make program changes). We understand there will be a national search for his replacement. He will be greatly missed by the State E-rate Coordinators, as he was one of the last staff members that have been with the program since its inception and because of his open-door policy to State E-rate Coordinators.
Kevin Martin Appointed New Chairman of FCC
In March, President Bush 16 appointed Kevin Martin as Chairman of the Federal Communications Commission (FCC) -- the federal agency responsible for all E-rate policy -- replacing Michael Powell. Martin has been an FCC Commissioner since July 2001. Before joining the Commission, Martin was a special assistant to President Bush for economic policy, and served as deputy general counsel of Bush’s 2000 presidential campaign. Earlier in his career, he served as an advisor to FCC Commissioner Harold Furchtgott-Roth, an one-time critic of the E-rate program.
We’ve been watching Chairman Martin’s comments closely since his appointment to Chair in March and he has made no suggestions that the E-rate program should be eliminated. He has, however, expressed strong views that it must be reformed. To that end, the FCC just released a Notice of Proposed Rulemaking (NPRM), seeking comments from interested stakeholders (including especially schools, libraries and service providers directly involved with and impacted by the E-rate program). For more specific information on the NPRM and how you can submit comments to the FCC, see below.
FCC Seeks Comments on E-rate and other Universal Service Programs
Have you ever been frustrated at delayed funding commitments, denials for small errors, the invoicing process, or the number of forms required? Do you have ideas on how the program could be run better or how what measures they can use to evaluate the effectiveness of the program? Care to weigh in on whether basic phone services should remain eligible? If so, the FCC wants to hear from you! Last week the FCC released a Notice of Proposed Rulemaking (NPRM), requesting comments from various stakeholder groups on overhauling the E-rate program, but also seeking comments on the other Universal Service programs as well (High Cost/ Low Income and the Rural Health Program). A copy of the FCC’s 44 page NPRM is available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-124A1.pdf and below is a detailed summary of the issues for which they are seeking comment.
If you are interested in submitting comments, please review the official NPRM linked above for a description of the entire issue you wish to address (they usually list several paragraphs as background for each issue, then ask for specific comments). You may submit comments on one or more of the issues they raise; you also may submit comments on other issues not specifically addressed. This is your chance to weigh in with key policymakers on how the E-rate program should be improved or overhauled.
Comments on these issues are due 90 days after the NPRM is published in the Federal Register, which is usually about 30 days after its release. Therefore my best guess is that comments will be due around October 14. Reply comments are due 150 days after the NPRM is published in the FR – or 2 months after the initial comments are due. Instructions for submitting comments can be found in the Notice itself (referenced above) beginning at Para. 103. The easiest way to submit comments is through the FCC’s Electronic Comment Filing System (“ECFS”) which can be accessed at http://www.fcc.gov/cgb/ecfs/. Click on 'submit a filing' on the right toolbar, then simply attach a copy of your comments (normally in Word).
Details of E-rate-related issues raised in NPRM:
Review of Program Administration
- Are other government programs better run? Which? Should the permanent administrator structure be replaced? By what?
- Should specific goals be set for the administrator or the participants in the program?
- What would be relevant in measuring program value, accomplishments, and results?
Performance Measures
- Should the performance measures focus on assurance of an “evolving level of telecommunications services” that includes advanced services?
- How shall the most useful and valid outcome, output, and efficiency measures be set for all programs?
- How should the information collection process be altered to provide the data necessary to measure performance? Which forms should be altered to do so?
- Is the goal of increasing the number of public schools to the Internet still effective as a measurement of the effectiveness of the program? Should numbers of libraries and private schools be measured?
- Would another measure (other than connectedness) be a more valid measure of effectiveness?
- How can the deployment of broadband services to the classroom be measured and how can the amount of such deployment attributable to E-Rate be delineated?
- How can the Commission determine which schools are totally without connectivity?
- Which timing issues and delays affect the efficiency and effectiveness of the program?
- Are new deadlines for action by the Commission and administrator needed? Which ones? What is the problem each creates and how will a new deadline help?
Funding Methods
- Should a formulaic approach to fund distribution be adopted? If so, should size of applicant be the criteria?
- Should funds be allowed to be used in a more flexible way? If so, what should be funded?
- Will the stakeholders be disadvantaged by such an approach?
- Will such an approach make detecting waste, fraud and abuse harder to detect?
- Would setting a cap on the amounts that applicants request be effective in deterring WFA?
- Is there another measure which would accomplish the same goal?
Application Process
- How can the process be streamlined by shortening, combining or eliminating forms?
- In particular, should the application for Priority 1 services be redesigned?
- Or, should there be a different application cycle for repeat requests?
- Or, should the current forms be used for Priority 2 requests and a simpler process be designed for Priority 1?
- Since relatively little waste, fraud and abuse is connected to Priority 1 services, the Commission has tentatively decided to adopt a streamlined multi-year application for Priority 1 services. Is this likely to increase potential for waste, fraud and abuse? How could this be avoided?
- Do some small applicants choose not to participate in the program because of its complexity? If so, what kind of changes would entice them into participation?
- Could the administrator move to an electronic-only notification system? What are the benefits and drawbacks?
- What are the timing and delay issues that the Commission should address? What negative effects do these delays cause?
- Do the Commission and the administrator have enough staff to complete work without delay?
- Should new deadlines for specific activities by the Commission and the administrator be established? Since current deadlines are seldom met, how could new ones be enforced?
Competitive Bidding
- What rules should be changed to ensure applicants obtain the best value for their funding?
- Should the obligation to issue competitive bid requests apply only to requests over a certain dollar figure?
- Is the Good Samaritan method of disbursing funds working well?
- What would the effects of requiring a minimum of three bids for every request? How, in particular, would this affect small and rural applicants?
- What kind of rules could ensure that applicants use E-Rate moneys efficiently and not attempt to “goldplate” supported services?
- Should maximum prices be set on some or all equipment and services?
Technology Planning
- How can the technology planning process required by E-Rate be reviewed in accordance with other federal technology planning requirements?
Forms
- Which forms could be consolidated or eliminated? Which should collect less information? Are others needed?
- Does the 470 facilitate the competitive bidding process? Should it be retained?
- Can the 472 and 474 be combined? Are there others that could be combined?
- Are the certifications on E-Rate forms appropriate for their purposes?
Timing of Applications
- How could the cycle of application and disbursement be synchronized better with the planning and budget cycles of applicants?
- Should NSLP data be required to be collected as of Oct. 1, or as of the most current available data, or should a different date be used?
- Is an annual application necessary or should multi-year applications be used? What would be the costs and benefits of each be?
Disbursements
- How could the full use of the 2.25 billion cap for each year be ensured?
- If original applications are approved, what would cause denial of a submitted invoice? How could this be prevented?
Audits
- Should some recipients be required to obtain an annual independent audit evaluating compliance with the statute and the Commission’s rules? If so, at what point would the cost of such audits outweigh the benefits of the information gathered?
- What would be the costs and burdens of independent audits to smaller schools and libraries? Would that be enough to deter such applicants from participating in the program?
- Should the audit requirement apply only to beneficiaries who receive a relatively large amount? What should that threshold be?
- Is a threshold of $3 million in a single year or $3 million cumulative in 3 years reasonable?
- Should schools, libraries and service providers have the same threshold?
- Who should pay for independent audits? The beneficiary or USAC?
- Do beneficiaries have auditors on staff who could conduct these audits? Are such auditors qualified to use generally accepted government auditing standards?
- Should the audits try to distinguish between intentional fraud, negligence and unintentional ministerial errors?
- Should the auditor only evaluate compliance with Commission rules (in contrast to unpublished USAC policies and practices)?
- How can ministerial error be defined (provide examples)?
- Are auditors properly trained and have sufficient understanding of the program to effectively audit the beneficiaries and service providers they deal with?
- Are there examples of waste of time or resources because of poorly designed audit programs or poorly trained auditors?
- How much does it cost a school or library in terms of money and staff hours to comply with various types of audits?
- Should USAC supply reports to audited entities and, if so, within what timeframe?
- Are audits of other federal programs in which schools and libraries are involved less intense and require fewer resources? Which other programs?
- How can E-Rate improve the audit process?
- Should the audit requirements adopted by the Commission be modeled on the Single Audit Act?
- Should any audited entity which does not comply with SAA requirements be prohibited from receiving any USF funds?
- Auditing considerations for the other three programs and for service providers
Vendor Investigations
- Should applicants be informed when a service provider is under investigation (not yet debarred)?
- How can applicants be protected from dealing with possibly predatory vendors without prejudicing the rights of such vendors?
- Should vendors be required to waive the right of confidentiality in cases of investigation as part of the registration process?
Penalties
- What should the range of sanctions be for various types of rule infractions in the program(s)? How can the programs differentiate between clerical mistakes and intentional fraud?
- Would reducing an E-Rate beneficiary’s discount level for a limited number of years be an appropriate sanction?
Julie Tritt Schell
jtschell@comcast.net
(717) 730.7133 (voice)
(717) 730.9060 (fax)
|
Back to 2005 Archives Main