Is the FCC purposefully screwing up US school broadband projects?

Answer: Yes, but it's hard to prove


Special report Schools across the United States are sounding the alarm on what looks suspiciously like an effort by the federal telecoms regulator to undermine efforts to build new broadband networks.

Under the e-rate program run by the Federal Communications Commission, the FCC, schools that do not have access to a fiber network supplied by the main cable companies can apply for federal funds to build or lease such a network, and so supply much faster internet access to their students.

The issue is at the very heart of the so-called digital divide where people in remote or rural areas of America have limited internet access. FCC chairman Ajit Pai has repeatedly stated that bridging that divide is one of his key priorities.

However, an analysis of the more than 800 applications for "special construction" by a company that provides e-rate consulting services, Funds for Learning, has shown an extraordinarily high failure rate of requests for funding, often for very minor reasons.

In 2016, for example, of 426 applications for special construction, 52 per cent of them were denied by the organization that processes them on behalf of the FCC, the Universal Service Administrative Company (USAC). Typically, the rate is around four per cent.

The figure was so high that Funds for Learning decided to dig into why, and found most rejections were for such trivial reasons that they look suspiciously like a deliberate effort to refuse requests for help on any possible grounds.

As one example, 25 applications were denied by USAC because additional details requested by the company were not submitted by the applicants within a 28-day time limit – a rule that schools were almost certainly not aware of.

I see...

Another 13 were rejected because they contained "charges which were determined to be beyond a USAC-internal cost-effectiveness threshold." But there is no guidance as to what those internal thresholds actually are. And even Funds for Learning – whose entire business is built on understanding the application process – admits that it has "no clue what that range might be."

A further 38 applications were denied because the services listed on one form were "substantially different" to those listed on another form. But that difference appears to be no more than the fact a school listed a service category on one form and a description on the other. In other words, an entirely understandable cockup that isn't really an error at all.

Perhaps reflecting the Kafkaesque nature of the process, the largest number of applications that weren't approved were a result of applicants giving up altogether and cancelling their requests.

"Increasingly, the reality is that special construction leads to special questions, special delays, and special headaches," wrote a specialist in the field, Brian Stephens.

But schools are always short of funds and so this year, more schools applied and more of them hired specialist consultants to dot the i's and cross the t's in the applications process, learning from previous rejections.

The result has been an extraordinary increase in the number of "pending" applications. In fact, of 401 applications this year for special construction, just one per cent have been approved so far, five per cent have been denied, and a staggering 94 per cent remain in limbo.

Frustrated at constant processing delays, applicants have started complaining. And earlier this week even the governor of New Mexico got involved.

Susana Martinez wrote a letter [PDF] to the CEO of USAC, Chris Henderson, in which she expressed her frustration that an expected rollout of high-speed internet access to schools simply hasn't happened. Martinez helped New Mexico create a fund for new fiber construction in which the state would match federal funds and together cover about 90 per cent of the cost of construction.

But, she noted, "the funding decision has stalled" at the USAC, and as a result more than 40 schools in her state "will likely endure another school year with slow speeds and spotty internet connections."

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