Could E-rate be going away for education? Economy and miss-spending could do it.
Remember many years ago when e-rate was suspended and they were going to overhaul the program? Now we wish they would have, we have too many vendors taking advantage of the program. Let me explain what I mean, I went to a school system a few hours away from Ohio. I went to an elementary school that had had only 17 users in the school. They had a huge switch (let say it was equal to a 6500 series Cisco), they had a full VOIP implementation with every possible option you could get. They had a video conferencing room, yes in an elementary school had this kind of system.
Now at any one time they have maybe 7 users on the system and have only used the video conferencing system twice in a year. I got called since the school system has this same set up in every school; they are getting killed with bandwidth now that they have really grown at other schools and are looking to see what they can do to reduce it. I asked the CIO why do you have this much equipment in your school system and at each school. He said they were sold by the vendor since they could get all of it on e-rate and pay a fraction of the total cost. I told him he had no choice if he wanted to keep his network running this way and to do more video/collaboration was to up his bandwidth.
He was really not happy with the vendor as they really did not explain the maintenance cost he would spend down the road, the bandwidth cost that would he would need if they did and expansion. So my question is, do vendor take advantage of the system and sell school massive pieces of gear since they know they can get away with it? When you have the government picking up a big piece of the cost why not right?
Well I think with the economy the way it is now, things will be changing. Our new administration coming in needs to halt all e-rate money, they need over haul the system. They need to make school systems more accountable for the money they get from e-rate and just not give them a blank check of which is what they have now. I know people will say you have to apply for it and have a plan to get the money. But they don't know you are putting a 60k switch in an elementary school, they don't look that you are running 4 fiber runs to that school of 17 users.
I am all for helping the schools, but this is another expense our tax dollars pay for and big business makes millions. The e-rate people need to have a CIO or Chief Architect that looks at everything before giving money. They need to have standards for the number of users at a school and what you can get, not a blank check for enterprise class switches and routers.
I think that this will be in the forefront for the millions misspent and starting in January it will be halted until the economy gets better and they can overhaul the system. So this is a wakeup call to all of those schools who are running their network on e-rate subsidies and who have to shut down without government money, you over spent. It is time to learn about what an ROI is and if you don't have an ROI for anything you are going to buy, don't buy it.
Larry Chaffin Ph.D is the Chief Executive Officer/Chairman and founder of Pluto Networks, a Consulting and VAR partner specializing in WAN Acceleration, VoIP, WLAN, Telepresence and Security and a Riverbed reseller. Pluto Networks specializes in the needs of small, large and enterprise companies by always giving them a great ROI on the products they sell. Pluto Networks has a presence in 23 countries around the world enabling all of its consultants to be virtual. Larry was a Judge at Interop for the Best of Interop Awards for 2009 and is looking forward to the 2010 awards in Las Vegas.
Larry has also co-authored all of the books listed below:
Managing Cisco Secure Networks, Skype Me, Practical VOIP Security, Configuring Check Point NGX VPN-1/Firewall-1,Configuring Juniper Networks NetScreen & SSG Firewalls,Essential Computer Security: Everyone's Guide to Email, Internet, and Wireless Security, How to Cheat at Microsoft Vista Administration, Microsoft Vista for IT Security Professionals, Asterisk Hacking, 2008 VoIP and Video Conferencing, Infosecurity 2008 Threat Analysis and author of Building a VOIP Network with Nortel's MS5100, along with co-authoring/ghost writing eleven other technology books for VIOP, WLAN, security and optical technologies. Larry is currently working on a follow up to Building a VoIP network with Nortel's MCS 5100 Book as well as new books on Cisco Telepresence Networks, Practical VoIP case studies and WAN Acceleration with Riverbed.
Larry also has more than 29 vendor certifications and has been working on many others. Larry has been a principal architect around the world in 22 countries for many Fortune 100 companies designing VoIP, security, wireless and optical networks. He has expanded over time also to include application acceleration. Larry is working with worldwide company now out of Asia as a Special Assistant to the CEO and CIO as they go through organizational and network changes, helping them with strategic advice from his years or experience. Pluto Networks is a channel partner of Cisco, ProCurve, LifeSize, Riverbed, Call Copy, Fastsoft and Symantec.
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E-rate
I think it would be interesting to see how the school/district filled out its application for that school. I highly doubt they informed USAC there were only 17 users. USAC does have cost effectiveness procedures that would likely catch this sort of situation if the applicant had filled out its applications honestly.
Furthermore, you should do you civic duty and report the waste of E-rate funds to USAC.
Larry, Larry, Larry. You have much to learn...
... about E-rate. It is NOT a blank check. Agreed, you should report such waste & abuse to 888-203-8100. (code 9 call) But there are far-reaching compliance standards and safeguards to curtail fraud & abuse now. Such abuse happens everywhere in government, and to greater extents elsewhere, but E-rate has been well-reformed since a lot of the criminal & wasteful things that OIG, DOJ and FCC found in recent years. (giant 3-letter company names withheld). If you really do have a PhD, then you know what research is all about then, right? So go to www.usac.org/sl and do your homework about all the hoops schools and libraries must now jump through to get funding.... Or get a Cisco public sector rep to teach you more about it... It is amazing that Pluto Networks doesn't even have an E-rate SPIN and yet is so critical of the program. With the line of work you're in, I suggest you get a SPIN, bid on some priority 2 projects, and get in on the action asap, before propsects in your neck of the woods reach their allowable contract date and the 471 window closes. (oh... and don't you mean "mis-spending"?)
nice cisco post
I did not see larry mention anything about Cisco as a vendor, too bad Cisco employees still don't put names on posts.
larry, larry , larry is right
I was a account rep for a few major networking companies and worked in the gov-state sectors. If this poster who could not put his name on a post is going to say there is no fraud and mis-spending? He needs to get a new job at Cisco. Follow the link below and read all of the fraud. There is no way it has stopped like you say. Seems like the man with the Ph.D knows more than you.
http://www.networkworld.com/search/searchresults.html?qt=e-rate&hpg1=sb&search=e-rate
Now we all know if the government is going to pay that schools and account reps are going to sell them everything they can. Are you going to tell me your manager at what ever company you sell for is going to tell you to sell them a 3k router or a 30k switch? Give me a break and get a clue.
I hate to say this also but it seems Larry is one of the smarter ones when it comes to not getting into the e-rate game. Why respond to e-rate rfp's and make 2 points or less? It is not worth it. It seems like the poster above had enough time to research his company just to say you don't sell e-rate.
Well good for Larry, maybe he does not want to sell it. Seems like he is doing enough work for consulting after the fact and when these schools get sold way more than what they need. Maybe it was your mess he was cleaning up in his post?
E-rate needs to go, then people will spend better and stop wasting our public money.
Just Kill Priority 2 Funding
The solution is simple. Disallow all priority 2 funding. That is where most of the fraud is.
As the IT man for a small school district, I need the discounts to provide adequate Internet access to my buildings. I however agree with those on the outside that something has to be done about the waste and fraud.
Since I am a taxpayer too, I would be perfectly happy to see priority 2 funding go away. As I read the original legislation creating E-Rate, I see nothing that justifies such funding anyway.
Get the funding right
I agree the program is wrought by waste, abuse, and fraud. However, the funding source is neither mine nor your tax dollars. The E-Rate is funded through the Universal Service Fund. Each month our telecommunication bill (land-line, cell phone, etc) has a fee called "Universal Service Fund" which pays for the E-Rate among other things. No portion of the E-Rate is collected through taxes.
A Nice Story was just posted on how ATT just got nailed.
Here is a link to the story:
http://www.networkworld.com/news/2009/021709-att-e-rate.html?hpg1=bn
Where the fee comes from yet who benefits...
Thank you to the one who clarified where the funding comes from. I want to add to that. Not only is it not a tax but it is the true Telecom companies who pay it. So why would non-telcos get to profit from this program???? I say simplify it even more than getting rid of P2 funding. I say unless you are a contributor to the funds and audited as such, then you should not have your hands in the pot. Now before you all shout back that "taxpayers" are indeed paying this fee, keep in mind that it is at the discretion of the Telco to pass the charge on in the form a surcharge. That is the fee on your bill that you are referring to. Also keep in mind that there are strict rules regarding how much can be recouped. I also agree that there is a ton of fraud still happening. The problem I see is that the customers requesting the funding are doing it via the guidance of some really bad vendors. Most of which do not have to contribute to the funds to begin with so quite honestly have nothing to lose. The second line of snakes are the consultants. Again they have nothing to lose and a lot of $ to gain. There has got to be more accountability to all. While the audits have increased in recent years, they are not making examples quick enough. For instance, I have yet to see a company get pinged for selling Telecom services as Internet Access which is a clear violation of program rules.
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