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Thursday, October 20, 2005

Paved with Good Intentions
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"The road to Hell is paved with good intentions." This 16th Century proverb (apparently not attributable to one of Ray's favorites, Samuel Johnson), if applied to the federal e-rate program through a filter of Dante's Inferno, would suggest that we're embedded in Hell's 8th Circle.

The House Commerce Committee's Subcommittee on Oversight and Investigations this week released a much-anticipated report on the rampant fraud and abuse found in the e-rate program. Heather Weaver of RCR Wireless News has a good piece on it, with a priceless quote of Barton from earlier this year: "I have been in Congress 21 years, and I haven't seen a more mismanaged program. If I had to vote today, I would vote to abolish it-period. If I can change it, I will. If I have the votes to kill it, I will. If I can't do either of those things, then I will so underfund it that it ceases to exist." Um, I take it you don't care for the program?

It's hard for any thinking person to like the program. Like its intentions? Sure. But it was doomed to failure, although not every critic would have predicted it would be quite the disaster it's turned out to be. The bottom line is, the federal government has a poor track record managing wealth redistribution programs.

It's absurd to think that Washington can efficiently and without fraud and abuse help wire a school in suburban Milwaukee with Internet access. But that's what the e-rate program -- added to the Telecom Act by Senators Snowe and Rockefeller -- asks of the government, via the private, not-for-profit Universal Service Administrative Company (USAC). That's how you end up with one example cited by Barton's committee:

In one of the most infamous cases, the USAC disbursed $101.2 million from 1998 to 2001 to equip Puerto Rico's 1,540 schools with high-speed Internet access but a later review found very few computers actually connected to the Internet and $23 million in equipment sitting in unopened boxes in a warehouse.

Given the frequency with which history repeats itself in these cases, one would assume there's no danger of new programs like e-rate coming down the pike. But that would be incorrect. In fact, let's remember that e-rate was paired with the Universal Service Program. Now Senators Smith, Dorgan and Pryor want to expand USF to fund broadband buildouts. This comes at a time when everyone agrees USF is broken, and scholarship is piling up that the program is unsustainable and no longer relevant.

Our Digital Age Communications Act (DACA) Universal Service Working Group is expected to issue Release 1.0 next week, so I will leave further comment on USF to those capable minds. I'll conclude by saying to e-rate supporters what I imagine Anna Nicole Smith said to her in-laws when she made her money grab upon being widowed: "What did you expect?"

posted by Patrick Ross @ 2:40 PM | Broadband , Communications , Internet , Universal Service

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