New chip from Intel continues trend of faster, cheaper PCs

IBM unveiled a 300 MHz, sub-$1K computer in August that is one of the first machines to take advantage of Intel’s improved Celeron chip. The improved chip is likely to inspire a wave of faster, more powerful low-end computers, analysts predicted.

The IBM PC 300GL is a network-ready, highly manageable computer with 32 or 64 MB of RAM (expandable to 256 MB), a 3.2 or 6.4 gigabyte hard drive, and 128 KB of cache. Thanks to Intel’s next-generation Celeron processor–a less expensive alternative to the Pentium chip–the 300GL retails for $989 (without monitor), with special pricing available to schools.

Intel’s original Celeron chip, which the company launched earlier this year, had been received poorly by PC makers because it didn’t perform as well as similarly priced chips from rivals Advanced Micro Devices (AMD) and Cyrix. But Intel said its new Celeron processor, which the company released August 24, delivers a 25 percent improvement in performance over the earlier version.

With its improved Celeron chip, Intel hopes to make inroads into the lower end of the chip market, a market driven to this point by smaller companies like AMD and National Semiconductor Corp.’s Cyrix.

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Cendant looks to shed its software unit

In the wake of a disastrous accounting scandal that has slashed the market value of Cendant Corp. by nearly $20 billion, the company announced plans to unload its software division to focus on its core travel, real estate, and marketing businesses.

Cendant Software boasted the nation’s largest retail sales of educational software last year, and it was the third-largest seller to schools. According to PC Data of Reston, Va., Cendant sold about $50 million in software to schools in 1997.

The company’s subsidiaries include Sierra Online, publisher of more than 200 games and simulation software; Knowledge Adventure, which publishes the Blaster line of math and language programs; and Davidson & Associates, once a leading independent company, which specializes in critically acclaimed interactive science and math programs.

“We have no comparative advantages as owners or managers of our software businesses,” said Henry Silverman, who replaced Walter Forbes as Cendant’s CEO in July after Forbes resigned over the scandal. “Accordingly, we have determined these units do not fit within our future business model.”

Cendant had no comment on potential buyers for its software imprints.

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Newslines–Interest in computer majors ebbs

Forget starting salaries above $40,000 and a choice of companies come graduation day. Students may be toting laptops and chatting by eMail, but they’re shunning majors that would put them on a fast track for computer jobs.

Instead, they’re sticking with business, law, health services, psychology, and other career paths where opportunities or pay may be less promising, according to a survey of college-bound teens.

“Students’ current career aspirations seem to be somewhat out of sync with the jobs that will be available for many of them,” said Richard L. Ferguson, president of the ACT Inc. testing group, which surveyed the high school class of 1998.

Only 3 percent of high school graduates who took the ACT test picked computer and information science as likely vocations. Less than 1 percent said they want to be computer engineers.

Yet companies have hundreds of thousands of openings for programmers, engineers and systems analysts. The average salary for jobs offered to 1998 college graduates in computer science jumped this year to $41,561, up nearly 12 percent from a year earlier, according to the National Association of Colleges and Employers.

Ferguson believes students don’t get help with career planning early or often enough. But access to technology also plays a role, said Jessie Woolley, president of Crimson & Brown Associates, a Cambridge, Mass., recruiting firm.

“When you think about the people who have access to the internet, when you think about the people who are mastering technology, really mastering technology, you’re [still] talking about a small percentage of the total U.S. population,” Woolley said.

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News and notes from the SLC

Service provider conference calls every Wednesday

The SLC invites service providers and vendors to join a regularly scheduled conference call to learn about and discuss billing issues, invoicing procedures, and other aspects of the eRate. Participants will have the opportunity to ask questions of SLC staff and to share solutions with each other. The call occurs each Wednesday from 1:00 p.m. to 3:00 p.m. EST. The number to call is 800-991-9019, passcode 708855#.

The minutes of past calls and the list of issues discussed will also be posted on the SLC’s web site when they become available, the corporation said.

Some applicants to be notified early of specific line-item rejections On Sept. 4, the SLC announced it would be notifying about 400 applicants that a particular line item of their Form 471 applications had been rejected prior to data entry for violating program rules.

These applicants will receive a special letter labeled Form S stating that a specific line from Item 15 or 16 of their Form 471 could not be accepted for data entry, but the remainder of their application would be processed.

There are several possible reasons for the Form S rejections, the SLC said. In some cases, the requested service is not being provided during the current program year—for example, a one-time order that was delivered and paid for in 1997.

In other cases, applicants didn’t comply with the rules governing the posting of Form 470. All services not covered by a written contract signed before Jan. 30, 1998, had to be filed as “New Services” on Form 470 and posted on the SLC web site for 28 days before a contract or service agreement could be signed and the applicant could file a Form 471 for that service.

Applicants who receive a Form S and wish to appeal their specific Funding Request rejection are instructed how to do so in the letter, the SLC said.

If you receive a Form S letter and you have any questions, call the SLC’s toll-free help line at (888) 203-8100. Modified SPINs for some vendors Some vendors have had to change their Service Provider Identification Number (SPIN) in the past few months. The SLC has tried to correct such SPINs on all the Form 471 applications it reviews, but that means future communications may list different SPINs from those you originally included in your Form 471.If you encounter this situation, consult the “List of Modified SPINs” on the SLC’s web site (http://www.slcfund.org/ann_9_2.asp) to see if your service provider has changed its SPIN since you filed your Form 471. You should then confirm the new number with your service provider. The List of Modified SPINs contains names and contact information for those service providers that have recently changed their SPINs.

The SLC urges you to use the corrected SPIN for all future business involving that particular service provider. If the SPIN it lists is incorrect, notify the Universal Service Administrative Co. (USAC) immediately by calling (888) 641-8722.

Sprint “Form 471 Worksheet”

Sprint Corp. recently informed its local (not long distance) telecommunications services customers of a special form it will require them to complete in order to process their eRate discounts.

The form, which Sprint is calling a Form 471 Worksheet, is adapted from the SLC’s “Optional Prediscount Cost Calculation Grid” and includes additional data Sprint has advised its customers that it needs for its own billing procedures.

The Sprint worksheet does not replace the FCC Form 471 or any other required form, the SLC said. But for Sprint customers, Sprint’s modified worksheet can be substituted for the Optional Prediscount Cost Calculation Grid.

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Developing a strategy for internal connections

Back in June, the FCC revised the funding priority on eRate applications. According to the new rules of priority, telecommunications services and internet access will be funded first, and whatever money is left over will fund internal connections.

Anticipating that this leftover amount won’t cover the demand, though, the FCC decided to fund internal connections on the basis of need. Thus, the program will fund internal connections for applicants who qualify for 90 percent discounts first, then 80 percent, and so on, until the money runs out. As you prepare to apply for the second round of discounts, you’ll want to adjust your eRate planning in light of those changes in funding priority. Single-building applicants

If you’ll be applying as an individual school or library and you qualify for an 80 or 90 percent discount, your chance of getting funding for internal connections is pretty good.

In this case, your application strategy can focus on “securing access to all of the resources” necessary to make effective use of your requests for internal connections.

For example, if you ask for funding to wire 50 classrooms, the SLC will want to see that you have a firm plan for making effective use of that wiring before it approves your request. You’ll need to show that you’ve budgeted for, or plan to secure, a commensurate amount of desktop PCs, software, electrical capacity, teacher training, etc.

On the other hand, if your discount level is below 70 percent, your chance of getting funding for internal connections is relatively low.

In this case, you may want to calculate the amount of savings that you’ll realize over the next few years from discounts on telecommunications services and internet access, and earmark those current and future savings toward funding your own internal connection project.

This assumes that you’ll continue to budget for those items at full amount, and reap the savings when the eRate does kick in.

Work with your vendors to design a payment plan that allows you to start installing the wiring today while spreading payments over time. As the savings start to materialize, you can use them to pay for the wiring.

Multiple-building applicants

If you’ll be filing as a district or consortium, be prepared for the possibility that some of your schools will get funding for internal connections while others will not. Consider the impact this inequity may have on your instructional programs.

For example, if your lesson plans will require students to access educational resources from a network, how will those in schools that don’t get eRate money for wiring accomplish this task? How will you address the technology divide between one eighth-grader versus another, just because their respective middle schools qualify for different discount levels?

There is also the technical issue. How should you design your district’s telecommunications infrastructure if you can’t be certain how many schools, and therefore how much data traffic, will be hooking up to that infrastructure? Your vendors may be able to help here. Ask them to develop a “scalable” network design that allows you start at any size and easily expand as more of your schools connect into the district’s infrastructure, whether through eRate or other funding sources.

A good network designer should be able to design a network that can be deployed today for your high-discount schools and which will act as the backbone for your other schools to connect to in the future.

Your district may be able to afford the incremental costs of connecting additional schools even without the eRate, due to the economies of scale afforded by a scalable network. A large network, through economies of scale (volume purchase, shortened implementation time, reduced overhead, vendor pricing promotions, etc.), can cost less than the sum of ten smaller ones.

Encourage your vendors to come up with innovative designs. With alternatives to choose from, you can select the one that best addresses the issues caused by inequities in the funding of internal connections.

As eRate solution manager of IBM’s Educational Industry Solution Unit, Man Bui works with schools and libraries to help them understand, apply for, and make effective use of the eRate. He can be reached via eMail at mmbui@us.ibm.com.

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Tackling the post-commitment phase of the program

Funding commitment letters are due to be sent out soon. It’s the moment you’ve been waiting for all summer, and one you probably thought would never arrive. Now that it’s finally here, here’s a primer explaining the process in more detail—including the steps you’ll need to take before you can receive your discount.

The FCC’s decision to change the priority of funding means that the SLC will be sending out funding commitment letters to applicants in waves instead of all at once. If you requested discounts on telecommunications services or internet access only, or if you qualify for a high discount level (80 or 90 percent), you’ll get your funding commitment letter first. If you requested discounts on internal connections and you don’t qualify for at least an 80 percent discount, you’ll get your funding commitment in the second wave of letters, after the SLC has determined whether there’s enough money to fund your request.

The SLC has assigned a “Funding Request Number” (FRN) to each individual line from your Form 471, Item 15 or 16. Next to each FRN in your funding commitment letter will appear a funding status for that particular line: “Funded” at the level you requested, unless adjusted by the SLC; “Partially Funded” or “Unfunded,” if the total amount of money in the Universal Service Fund is not enough to cover your request; or “Denied,” if the service was found to be ineligible.

A detailed explanation will accompany requests that are partially funded or denied, according to the SLC. The first thing you should do when you get your funding commitment letter is make sure the information contained in the letter is correct. If you have questions or need to make corrections, you should contact the SLC as specified in the letter.

If you’ve already begun to receive services that will be discounted, your next step will be to complete and file a Form 486, the “Receipt of Service Confirmation Form.” You’ll need to do this right away, since you only have five (5) business days to submit this form from the time you receive your commitment letter.

Form 486

Form 486 verifies that you are receiving the services you’ve requested discounts for. It also verifies that you have a technology plan approved by an SLC-authorized agency.

The form is short and, by SLC standards, fairly simple to fill out. A draft copy submitted for the FCC’s approval was only three pages.

There are five cases in which you’ll need to fill out and submit a Form 486:

• receipt of a funding commitment letter for existing services;

• start or receipt of approved new services;

• early termination of services;

• extension of contract expiration date; and

• decision to cancel a Funding Request Number for services.

You must file a Form 486 within five business days of receiving your commitment letter for existing services, and within five business days of the start date for new services.

You also have to file a Form 486 immediately if the delivery of a service is terminated before the contract expiration date indicated on your Form 471 (Items 15 or 16, Column 5), or if the expiration date is extended within the current program year.

The person who completed Form 471 (often referred to as the “Billed Entity” by the SLC) should also file the Form 486. You can choose to file one Form 486 for all your FRNs or submit separate forms for each FRN.

The form will ask you to certify that you have an approved technology plan and to name the agency that approved the plan. If your technology plan hasn’t been approved by your state education agency or another SLC-certified institution, you should get it approved now.

A copy of Form 486 will be mailed to you along with your funding commitment letter. The form also will be available on the SLC’s web site, but it cannot be filed electronically. Form 486 should be returned to: SLC Form 486, P.O. Box 7026, Lawrence, KS 66044-7026, or for express delivery, to: SLC Form 486, c/o Ms. Smith, 3833 Greenway Drive, Lawrence, KS 66046.

Billed Entity Applicant Reimbursement Form

If you’ve already paid for a service in full and you’re approved for a discount on that service, you’ll have to submit a special Billed Entity Applicant Reimbursement Form to the SLC before you can be reimbursed.

You should complete this form in consultation with your service provider, because your service provider will have to sign the form agreeing to issue a reimbursement to you via check or credit as soon as possible once the SLC approves it.

Like the Form 486, the Billed Entity Applicant Reimbursement Form will be sent to you along with your funding commitment letter. You can include more than one FRN on each form, but there should be only one Service Provider Identification Number (SPIN) per form.

When you’ve completed the form, you should make a copy for your service provider. Mail the form to: SLC BEAR Form, P.O. Box 7026, Lawrence, KS 66044-7026, or via express delivery to: SLC BEAR Form, c/o Ms. Smith, 2822 Greenway Drive, Lawrence, KS 66046.

The SLC’s goal is to review and approve all Billed Entity Applicant Reimbursement Forms within 20 days. Once your form is approved, your service provider will be notified to begin the reimbursement process. The Universal Service Administrative Co. (USAC) will then cut a check to the service provider covering the discounted portion of the service. Service provider responsibilities

The SLC will send a copy of your funding commitment letter, the Form 486, and the Billed Entity Reimbursement Form to your service providers so they can consult with you about their billing process. Once you’ve filed your Form 486, your service providers can start invoicing the SLC for your discounts. Service providers may submit their invoices on paper or electronically. The Service Provider Invoice Form will be available on the SLC’s web site soon.

How quickly you’ll begin to see discounts depends on the service provider. For some vendors, adjusting their billing systems to incorporate the eRate discount will be easy. For others, the task is much more complicated.

Some applicants may not see discounts until 1999, the SLC warns. During the transition period, you may be required to pay service providers’ bills in full and seek reimbursement using the Billed Entity Applicant Reimbursement Form.

Some service providers also may create new procedures to handle eRate business. It’s imperative that you consult with your service providers throughout the billing and invoicing phase to make sure you understand their procedures.

The SLC will be conducting a workshop titled “From Funding Commitments Through Discounts, Step by Step” with applicants across the country. You’ll find a list of these workshops on the SLC web site. You can also call the SLC Client Service Bureau hotline with any questions you might have at (888) 203-8100.

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eRate legislation may be put on hold

A joint hearing of two House committees in September to discuss federal programs for school technology—including the eRate—indicated that reforming the program remains active in Congress’ collective mind. But if the sponsors of legislation to overhaul the eRate are to be believed, that probably won’t happen during the current legislative session.

A spokesman for Rep. Ron Klink, D-Pa., told eRate Update it’s unlikely that any pending eRate legislation would be passed in the House before Congress adjourns Oct. 9.

Klink had introduced a bill Aug. 6 that would change the source of funding for the eRate. Called the “Telecommunications Trust Act of 1998” (H.R. 4474), the bill would divert an existing 3 percent telephone excise tax into a fund to pay for the eRate. The fund would be administered by the FCC and would be appropriated for the next six years, beginning in 1999.

The Telecommunications Trust Act is similar in theory to bills sponsored in July by Rep. Billy Tauzin, R-La., and Sen. Conrad Burns, R-Mont. All three bills would tackle concerns that the current program, which is funded by contributions from telecommunications carriers, has led to new surcharges on consumers’ long-distance bills. But the Burns-Tauzin legislation drew the ire of school and library officials because it would cut the excise tax from 3 to 1 percent before funding the eRate. Last year, the telephone excise tax generated nearly $4 billion for the federal treasury.

The Burns-Tauzin bills also would transfer oversight of the program from the FCC to the Commerce Department, which in turn would distribute the funds as block grants for states to administer. With the early adjournment of the House so its members can campaign for reelection, though, none of the three seems likely to pass. Charles Territo, press secretary for Rep. Klink, said there’s too much on Congress’ plate right now for it to address the eRate.

“We still have 12 appropriations bills to do, and there’s the whole Lewinsky thing,” he said. “I just don’t know if there’s enough time to address it this fall. It’s kind of an in-depth topic.” The most likely scenario, Territo said, would be for momentum on the issue to build again when Congress reconvenes in January. However, it’s impossible to say whether sponsors of eRate legislation in the House even will be returning to Congress then.

The FCC ‘got it wrong’

Though members of Congress doubt whether eRate legislation will pass this fall, they remain concerned about the program’s implementation. At a joint hearing of the House Commerce and Education Workforce Committees Sept. 16, lawmakers voiced their concerns.

Members of both committees criticized the eRate program for not following through yet on its intended mission. Rep. Thomas Bliley, R-Va., chairman of the House Commerce Committee, said that the FCC “got it wrong. As a result, all that the FCC has given us is higher phone rates, new bureaucracies, and court challenges.” Bliley continued, “After two and a half years of attempting to implement this program, the FCC has failed to give a single school or library a discount on telecommunications services as Congress intended.”

Education Committee chairman Bill Goodling, R-Pa., echoed Bliley’s point, saying that more than two years after the Telecommunications Act was passed, “not a single school has received one dime from the eRate. Fortunately, even without the eRate, access to the internet has quadrupled … and now roughly 80 percent of schools have access to the internet.” Criticism of the eRate at the hearing wasn’t limited to members of Congress. Two school technology directors also blasted the program’s bureaucracy. Brent Frey, supervisor of educational technology for West Shore School District in New Cumberland, Pa., testified that there were 83 changes in the SLC’s rules within 75 days, forcing many states to hire eRate consultants. Most school districts that applied this year won’t do it again, Frey said, and the application requirements could further widen the gap between wealthier and poorer districts. The hearing was called to examine whether the eRate is even worth keeping, and to take stock of existing programs that already provide grants for school technology. An analyst from the General Accounting Office testified that $7.5 billion is being spent on education, but not all is earmarked for technology.

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New eRate head reveals upcoming changes

When CEO Ira Fishman resigned from the Schools and Libraries Corp. (SLC) Aug. 28, he left Kate Moore, the corporation’s chief operating officer, in charge of administering the eRate. Now, for the first time, Moore reveals the changes planned for the next round of the program.

As chief operating officer, Moore was responsible for overseeing the SLC’s contractors in areas such as systems development (i.e., creation of the web site, data processing, and database administration), program integrity assurance, and support services. She also managed the internal controls audit and helped develop program policies along with Debra Kriete, the SLC’s general counsel.

Before joining the SLC, Moore served as chief financial officer of the United Way of America. She’s also been in the political spotlight before, having served as assistant secretary of transportation during the Bush administration. In that role, she represented the Department of Transportation before Congress, the media, and the public.

In an exclusive interview with eRate Update Sept. 14, Moore discussed the changes you can expect to see implemented during the next application cycle, which is scheduled to begin this fall. She also revealed her vision of the program and described how she expects to handle its intense public and congressional scrutiny.

Timing of procedures

Do you plan to send out funding commitment letters before the application window for the next cycle opens?

The FCC, as you know, has established Oct. 1 as the date when schools and libraries may send in applications. And indeed, we have a goal of getting commitment letters into the hands of applicants before the second cycle begins—that’s our personal goal. We will be talking to the FCC about the prospects of the Oct. 1 timing and whether that should be changed or not. I think it’s fair to say that we all have a goal to allow the applicants to know the response to the first year before they face the deadline for the start of the second year.

The General Accounting Office (GAO) had some recommendations for you to implement before you could issue funding commitment letters. How far along are you in terms of implementing those recommendations?

If you’ll recall, there were three major recommendations. One was conducting a random sampling of applications. We have virtually completed the random samplings, and the results on that will be reported to the GAO in the next couple of weeks. Overall, I would say we generally approve of the results of the surveys and are working with the GAO to identify follow-up steps. So that step is virtually complete.

You’ll recall that they also asked us to have a complete report from our auditors, who are part of the design of our internal controls. That work is continuing the pace also. We met with our auditors on [Sept. 11] to go over some of their latest work.

A key point for completion of their work would be the stabilization of the invoice forms, which represent the last batch of forms in this cycle. We’ve been doing a lot of consulting with service providers as well as applicants to ensure that those forms work a little bit more user-friendly and effectively for our customers. Once those forms stabilize, we’ll have a pretty clear picture of the first cycle, and that will be a key point for the [auditors] to understand where we are so they can complete their report.

The third [recommendation] was to have completed the processes and procedures around the various stages of the program. So, for example, the invoice forms—we wouldn’t want to issue a commitment letter and then not be able to turn around and pay the invoice that would come along ten, fifteen, twenty days later. It makes good management sense to have your invoicing procedures and the forms and all of that in place before you issue the commitment letters.

So again, it’s tied to the finalization of the forms and the finalization of the computer systems to plug in those forms. Obviously, the computer systems are a function of the data collected on those forms. If the data collected were to change, then you have to change the system. It’s another issue that makes the timing hard to predict.

When will the public know demographic information like how much each state has requested in discounts? Is that going to be public knowledge soon?

We’d like the public to know soon, but we do need to make sure that our reporting systems are accurate enough. We feel that we do have a critical mass of information in the computer to be able to report that—but, as you know, the processing of these applications has taken longer than expected. So I would like to think that this kind of information would be available soon, but [we’ll need] a bit longer to work with both our contractor and the FCC to make sure they would be comfortable with (a) the projection, from the contractor’s standpoint, and (b) the release, from the FCC’s standpoint. I know there’s been a lot of interest in that information.

Reasons for rejection

Above and beyond the reasons for rejection listed in the “Minimum Processing Standards” document, can you discuss some of the common reasons that applications will be rejected so that schools and libraries will have a heads-up in anticipating the next round?

In terms of reasons that applications or portions of an application would be rejected, among them would be: One, they had sought discounted support for services deemed ineligible. That would be the issue that’s probably most common.

Go back to the application mentally if you can, where they cite in Items 15 and 16 the service provider name/number, the 470 application upon which this is based, and the service bucket, like “internal connections.” Then in Item 17 they’re providing a lot of the backup details of the services that are actually encompassed in the application.

We have clearly communicated to our applicants that if that single line item has included in it requests for discounts on services that are not eligible, that entire line item would be rejected. If they’re asking for funding on services that are going to an ineligible entity or going for ineligible uses, and if those are not broken out of a line item, that entire line has to be rejected. So that would be one reason.

There may also be partial funding responses in the sense that if the applicant did not have adequate documentation for the discount level they were claiming, we could respond with a different discount level. A discount would still be provided, but it may not be exactly the one that was on the application. So that would be a reason for partial funding.

To the extent that it’s an ineligible entity that applies, or if they have included an ineligible entity in their consortium application and that ineligible entity were seeking discounts in part of the application, then that would jeopardize their funding as well. So these are some of the issues.

In terms of the areas that might give schools or libraries a lot of confusion about what is an eligible and what is not an eligible service, can you dicuss some of the things that you’ve seen that keep recurring among applications?

I hear this question, and it’s a good question—but this is a question that we would like to discuss after the commitment letters have gone out, as part of our “after the fact” service product. But I think at this point, given that we’re in the middle of the process, I won’t go down that path.

Changes in the next round

Based on the feedback that you’ve gotten from schools and libraries who have applied, what changes will you be making to improve the process for the next round?

Good question. There’s lots of changes, and let me mention them to you.

Let’s start with the actual forms, the Form 470 and Form 471. We will not be changing the actual forms—first of all, of course, we worked hard to get FCC and OMB clearance, and number two, we’ve built a computer system based on the data fields that we have. But what we can change, and what we are proposing to the FCC to be changed, are the instructions that support those forms. We believe that we can do a clearer job this time of explaining how to fill in the forms, based on the experience that we’ve had this year. So that’s point one.

Point two, we plan to put the Form 471 application process online this year, as opposed to requiring it purely on paper. Our hope is that will facilitate the application process for many, many applicants. It may be that there are many out there who—with the breadth of their applications—choose to put it on paper again. But we want to offer that option for the Form 471. Of course, [we’ll offer] a lot of support and verbal instructions and so forth to facilitate the online approach to the Form 471. That’s point two.

Point three, we are defining our outreach efforts for the second program year to incorporate many of the lessons learned. We have the luxury and the ability this year, for the second program year, to package and integrate a lot of the information that we made available to the clients in the first year, but made available to them on a sequential basis as we learned and heard more from the FCC. So we have the benfit now of providing for our clients a kind of integrated set of materials.

We also have the benefit of some the tools that we put in place later in the year to reach those clients who have less access to the internet. For example, in the course of the first year, we established a “fax on demand” facility, allowing applicants to call in and get by fax some of the public documents and news advisors, et cetera, that we were issuing electronically. So we can build on that capacity.

Finally, we will be instituting certain internal operating changes to enhance the process from an internal operating standpoint. Ultimately, we hope to have a bar coding process for the applications so that we have an easier way to track and identity them.

Also, the new forms that you’ll see for the Form 486, as well as the invoice form, will feature an opportunity for the applicant to create his or her own number on that form. Should there be conversations between our client service bureau and the applicant, and the applicant has filed five or six Forms 486 and they want to know, “Which one are you talking about?” we can say, “You marked this one that I’m looking at as Form 486, Number 7.” That will allow us to engage in a more productive conversation with the client if there are issues that come up.

These are again the kind of things that we are planning to incorporate for the second year from lessons learned.

There has been some criticism directed at the client service bureau from applicants who were unhappy with the quality of help they received. In many cases, the responses from the help desk turned out to be wrong. What will you be doing to ensure more reliable, more accurate help the next time around?

Let me address that one. The client service bureau had in-person training from Debra Kriete, our general counsel. We have a very aggressive communications and training program for our client service bureau. Inevitably, there are going to be occasional disconnects in terms of the information that is received and the information that is transmitted. We worked very hard to identify those when we heard about them, trace them down to the source, and correct that.

I think in year two, we have the benefit of the establishment of the program and the availability of all the resources and tools, both for the applicants and the client service bureau, for clearer communication. We believe that to the extent it was an issue in year one, it should be a much smaller issue in year two, by virtue of both the materials—the sort of training reinforcement we’ve provided—as well as the experience we’ve all had.

The packet of outreach materials that you’re putting together—will it be made available before the start of the application window for the second round?

Yes.

Will it include copies of the Form 470 and Form 471, filled out the way they should appear when submitted?

I hear that question a lot. The basic package will consist of the actual forms and the instructions for these forms—with the FCC’s support, presumably revised instructions. So that’s one component. The second component would be an updated program description.

Then in terms of the mailings that we would do and the stuff that we would put up on the web site for the second program year—those components would be included as well.

We do plan to provide sample forms, filled in on a sample basis, as a tool to help our applicants. We think this is going to be particularly helpful for those who have not applied this year, because we really want to make sure we reach out to those who, in effect, did not assimilate enough information to gear up to apply, or for whom the actually implementation came as a surprise, or whatever.

We’re very eager to broaden the base of participants and we think tools like that can help us with that.

Outreach efforts

Speaking of outreach efforts to target schools and libraries that didn’t apply the first year, how do you plan to do this?

Let me address that in a couple of ways. We will have the data for those who applied and ultimately, of course, for those who were successful applicants. And we will be in a position to use that data to say who or what is missing.

We have in the past and will continue to work closely with the Council of Chief State School Officers for outreach on the school side because I think they can give us a kind of hands-on, on-the-scene assessment like, “here’s a whole thematic block of schools or school districts that kind of failed to leap in,” and we’d like to work with the council to help bring those schools into the fold.

Zeroing in on the library side, we will (a) have the data, and then (b) use our networks and all the wonderful support that we’ve been provided through the [American Library Association] and other groups to reach out to the libraries that were missing.

Certainly, of course, we will also target and work with the private school groups, be it parochial schools or other private schools—again, using the data we have, along with their understanding of where we’ve missed and why we’ve missed, through their outreach activities.

So it’ll be a blend of using the data we have, as well as the networks that exist to help make this program a reality, to get a broader base of applicants in the door for year two.

We’re also scheduling outreach efforts in every one of the 50 states to explain the Form 486 and invoicing process to those that have applied, and we’re hopeful that the kind of presence and outreach for this component of the program will have a ripple effect in terms of encouraging knowledge about the first stage of the second program year.

How will you be reaching out to the service provider community to ensure that they’re knowledgeable about the program as well?

We’re encouraging the groups that we’re going to be meeting with this fall on the next phase of the program year one to work with their service providers and encourage them to participate in these outreach sessions as well, because obviously service providers and applicants are going to be working together on these invoice forms.

We’re also talking about producing a program description or manual for service providers on this program, so that they have a window into the program themselves next year. We think we can use this tool as a basis for reaching a broader base of service providers, particularly in the internal connections area where there are more local-based enterprises.

We can then do sort of a push-pull strategy by getting that information out to service providers, making some of them more aware and in tune to the program, and then their relationships with their own communities can help schools and libraries come into the program that had not been in previously.

Looking toward the future

There is some concern from schools and libraries about what will happen when the SLC merges with the Universal Service Administrative Co. (USAC) as proposed by Jan. 1. Can you talk about that, and where the process is in terms of being approved?

That’s a good question for the FCC. I would like to think that there would be action certainly before the end of the year, and that the reorganization would go into place effective in January. But I don’t know whether the FCC is still on that timetable or not.

Meanwhile, to address some of the issues that Congress has raised in terms of efficiencies and so forth, we are taking steps now that can be undertaken regardless of whether there is an official and formal reorganization.

We are collaborating with USAC and the Rural Health Care Corporation on shared space, for example. We are in a one-year sublease situation so that we can co-locate and achieve the modest efficiencies that come along with co-location—be it space, conference room, xeroxing, etc. So to the extent that we can achieve some efficiencies, we’re planning on doing that in any event.

In terms of the programmatic impact of coming together, the sense I have from Cheryl Parrino, the USAC CEO, is that she is very supportive of the individual program identities, and that she’s very sensitive to the fact that this new organization as it will exist, assuming the FCC goes this path, will have different sets of stakeholders and that each of those needs its proper attention. So she has been very clear to us that she does want this kind of customer-oriented, client-based service to continue, including all the outreach.

I should just mention that she and I had a visit with Sen. McCain [on Sept. 10], who asked us to come in because he wanted to meet with the new leadership of the eRate program. In the process of that meeting, when it came to SLC issues, she kindly turned to me as one who’s involved in the day-to-day. And I think that’s her kind of management philosophy, and I think the education and library community and our service providers should take heart in that she’s committed to that kind of client-based service program.

Administrative costs for the program rose again in the fourth quarter, to $4.9 million, sparking renewed criticism among those who say it’s too costly. How do you address that criticism?<

Here’s how I address that: We are in the start-up phase of a virtual $2 billion enterprise. You are going to experience a heavy investment in one-time costs, start-up costs, number one; and two, you’re going to experience a lot of unpredictability.

When you look at our budget, nearly one-fourth is cost associated with a start-up operation—that is to say, computer systems development as well as some of the up-front training and materials for the client service bureau and program integrity assurance team. But the budget is still in the neighborhood of one percent of program cost—slightly above when you consider the reduction on the program side that was reflected in the FCC’s [June 12 decision to cut funding].

Obviously, I think it’s a good investment in the program for objective and efficient operation in the future, and I think that with the staff that we have, with the outsourcing that we have, with the ability to hire temporary staff to address peak loads and then pull back—I think when you look at a single entity doing that, you can achieve long-term efficiencies and long-term success.

How do you plan to handle the public and congressional scrutiny of the eRate?

In a nutshell, by managing the program effectively and with high standards. So, for example, in our work with the GAO—we were happy to get their suggestions. We want this program to work right. And if somebody has an idea for improving it, we will listen. Certainly that was Ira Fishman’s posture, and certainly it’s my posture, to reward the community and listen to the customer.

At the same time, it can be a source of creative tension, maintaining the standards of program compliance that we need to have to make sure there are no material problems with the program’s integrity. But we plan to maintain our accessibility as well, and with respect to Congress, we are at their disposal if they have any questions or concerns. My belief is that the open flow of communications is the best way to address any concerns or queries that the public, or the Congress, or the GAO, or ther FCC might have.

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Product Spotlight

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Educators Video Production Value Pack

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