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RE: [WWWEDU] E -Rate Funding on Hold.. What to do? How to keep schools on line?

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  • Punderson, IV, James
    It s hard to figure out just exactly what game Powell s FCC is playing here. The E-Rate program has $3,000,000,000 (that s three billion) in idle funds waiting
    Message 1 of 2 , Oct 5, 2004
      It's hard to figure out just exactly what game Powell's FCC is playing
      here. The E-Rate program has $3,000,000,000 (that's three billion) in
      idle funds waiting to be disbursed to schools and libraries. In fact,
      they have accumulated so much money that the FCC recently reduced, at
      least temporarily, the amount of money the telephone companies were
      required to pay in. OK, that's one part of the picture; they have too
      much money.

      The "rest of the story" as Paul Harvey would say, is that the FCC won't
      let the E-Rate folks commit any more money to schools and libraries
      because the E-Rate folks do not have enough money. Yes, you read that
      right! Here's why:

      The E-Rate program is a bit like airline ticket sales. More airline
      tickets are sold than the plane will hold because there are a lot of no
      shows. There is a very high no-show rate in the E-Rate program for
      various reasons (a major one of which is the the beyond needless delays
      and pointless paperwork required by the E-Rate folks but that's a whole
      'nother story).

      Consequently, the E-Rate folks quite correctly roll over unused, and
      reasonably anticipated to be unused, money from previous years to fund
      current year projects. If anything, they could do more of it judging by
      the huge amount of idle cash on hand but the FCC itself decides how much
      to roll over.

      Apparently because the Clinton administration, in trying to make the
      Federal deficit look smaller, counted the E-Rate fund balance as
      belonging to the government and now standards that apply to government
      funds are being applied for the first time. What this means here is that
      no money can be committed (except in the Social Security and Medicare
      fund apparently) that isn't on hand in the form of uncommitted cash.
      This means that until the old unused previous year commitments expire or
      are cancelled, those funds are unavailable. So rather than cutting back
      on telephone company payments, the FCC should have increased them to be
      able to fund the current year.

      So the FCC knew the accounting standards were going to be imposed, went
      ahead and mandated the now "improper" rollovers, then made the problem
      even worse by delaying incoming cash and then ordered the E-Rate program
      to stop making funding commitments until it had adequate funds on hand.
      I'm sure there are numerous available conspiracy theories to account for
      it all but the bottom line is the FCC, whether through incompetence or
      design, has thoroughly botched this year's E-Rate program.

      Then, in what is either monumental hypocrisy or schizophrenia, having
      imposed its own immediate and total freeze, it has protested vigorously
      against Congressional suggestions of just such a freeze.

      Meanwhile the schools and libraries have a real dilemma, whether or not
      to go ahead and commit to spending not knowing for sure if the money
      will actually come through. This problem is worst for the high-discount
      poor schools who would have to come up with 100% of the funds instead of
      10%. The better-off schools who have both more money and weren't going
      to get such a high percentage of aid anyway are in a better position to
      make the expenditure on their own. Net result (pun intended), is that
      the Digital Divide is widened by the program that was supposed to make
      it narrower. The Law of Unintended Consequences strikes again!

      James Punderson, CEO
      K12USA.com -- "Cool Tools For Schools"
      http://www.k12usa.com <http://www.k12usa.com/>
      Mailto:jpunderson@... <mailto:jpunderson@...>

      PS. As our contribution to helping folks deal with this mess, if there
      are any schools and libraries whose E-Rate funded mail service is
      currently disrupted, our company is willing to temporarily provide them
      with e-mail services during the funding disruption at the same,
      after-discount, cost they were planning on (even though we will receive
      no E-Rate funding to make up the difference). Feel free to pass this
      offer on to anyone affected.


      From: BBracey@... [mailto:BBracey@...]
      Sent: Monday, October 04, 2004 21:00
      To: undisclosed-recipients
      Subject: [WWWEDU] E -Rate Funding on Hold.. What to do? How to
      keep schools on line?

      A suspension of payments under the federal E-Rate program has
      put many
      public schools and libraries around the country in a financial
      to pay ongoing costs of technology projects. Payments were
      halted two
      months ago, without warning, as a result of changes made by the
      Communications Commission (FCC) designed to limit fraud and
      waste in
      the program. Critics have said that abuse and fraud are rampant
      in the
      E-Rate program, which provides $2.25 billion annually to the
      schools and libraries for technology services. Michael K.
      chairman of the FCC, called the program "vital for America" but
      said it
      must comply "strictly with the highest government accounting and
      auditing standards." No word has been given, however, on how
      long the
      moratorium will last. In the meantime, many state agencies are
      to figure out how they will pay the bills. Curt Wolfe, CIO for
      Dakota, said his state is short about $1.7 million from the
      program and
      that the problem will become very serious if not resolved this
      Robert Boucher, of a Wisconsin education agency, said his state
      has not
      received $22 million promised under the program, money that is
      used to
      fund Internet and phone service for 426 school districts and 387
      New York Times, 4 October 2004 (registration req'd)

      [Non-text portions of this message have been removed]
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