[NHDOE-ETNews] ET News: FCC Releases Further Notice of Proposed Rulemaking on E-Rate Modernization Order

Freeda, Stanley Stanley.Freeda at doe.nh.gov
Mon Aug 4 14:47:52 EDT 2014


Today on the ETNews Listserv
ITEM:  FCC Releases Further Notice of Proposed Rulemaking on E-Rate Modernization Order

>From the August 4, 2014 Edition of the E-Rate Central Newsletter

Accompanying the recently released first E-rate modernization Order (FCC 14-99<http://www.e-ratecentral.com/FCC/FCC-14-99A1.pdf>) was a Further Notice of Proposed Rulemaking ("FNPRM") seeking comment on future funding needs and on several other issues not fully addressed in the Order.  In total, the FNPRM includes almost 130 questions or requests for comments on the five topics discussed further below.

FNPRM comments are due September 15th; reply comments are due September 30th.  A subsequent order, based on this FNPRM and expected later this year, may expand or modify provisions of this initial E-rate modernization Order discussed in the E-Rate Central newsletter of July 28th<http://www.e-ratecentral.com/archive/News/News2014/weekly-news-2014-0728.asp>.


Future E-Rate Funding Needs:

One of the contentious points in the approval of the Order was the position taken by two Commissioners that the annual cap for E-rate funding needed to be increased, at least to reflect inflation since the program's inception (i.e., by perhaps $800 million).  The FNPRM asks for information regarding:

  1.  The gap between current levels of connectivity and the specific targets adopted.
  2.  How much money is needed to bridge that gap.
  3.  The per-student and per-square-foot budgets adopted.
  4.  The sufficiency of funding freed up by the reforms already adopted.
  5.  The reduction in E-rate purchasing power since the creation of the program.

Efficiency of Multi-Year Contracts:

The FNPRM poses a number of questions concerning the wisdom of limiting the duration of multi-year contracts.  It notes the apparent trade-off between longer-term contracts, presumably with lower prices initially, versus the ability to take advantage of lower-trending prices for broadband service in the future.  It asks about alternatives to maximum duration contracts and about the need for longer-term contracts for new fiber connections.

NSLP Data Collection:

The FCC proposes, and the FNPRM explores, a requirement that schools participating in the NSLP program must use state-reported NSLP data, even if this data is typically a year out-of-date.  This section of the FNPRM also addresses the proper use of Community Eligibility Provision data and Provision 1, 2, or 3 data.

Encouraging Consortium Participation:

The FNPRM discusses a number of proposals for further encouraging applicant participation in consortia and/or changing consortium rules.  One proposal is to change the calculation of a consortium's discount rate from a simple average to a student-weighted average to better reflect the discounted funding attributed to each member.  For libraries, which do not have students, one proposal is to attribute one student to each 50 square feet of library space.

The FNPRM also discusses various approaches to addressing the thorny issue of assuring that each member receives its proportional discount-weighted share of the consortium's total discount (as opposed to just receiving its consortium average share).  The underlying problem is that the consortium discount mechanism is based on an average, however determined, that may not match the average prices paid by the various members for different levels of service.  As a result, the total discount will not accurately match nominal discounts that the members would receive on their share of the prices they pay.  It could be more or less.  Our view, originally discussed in the Consortium Discount Allocation section of E-Rate Central newsletter of October 27, 2008<http://www.e-ratecentral.com/archive/News/News2008/weekly_news_2008_1027.asp>, is that the equitable way to distribute discount reimbursements is to use a proportional factor.  We have yet to see a consortium audit that examines the ultimate distribution of discounts to consortium members.

Other aspects considered in this section of the FNPRM request comments on proposals to increase the discounts on consortium applications by 5% and/or to permit private-sector members.

Library Support:

The FNPRM also requests comments on the adequacy of, and alternatives to, the per-square-foot Category 2 budget for libraries.


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