Perspective: Cheaper phone bills on the horizon?

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schools and 92 percent of school classrooms enjoyed Internet hookups. Thanks to cheaper products and wireless connections, those numbers are probably approaching 100 percent today.

In inimitable Washington style, that good news has been used to raise taxes instead of reducing them. The FCC has boosted E-rate taxes from about $1.7 billion in 1998 to $2.25 billion today. As a result, consumers and businesses pay more than they otherwise would on long-distance and wireless phone bills.

In 1999, the FCC ordered phone companies to hide the E-rate taxes from consumers.

Does this process sound a bit odd? It should. Only Congress has the power to raise taxes. Federal agencies don't.

But politicians have been leery of confronting this constitutionally dubious entitlement program. In fact, the FCC in 1999 ordered phone companies to hide the E-rate taxes from consumers, prompting an angry dissent from then-Commissioner Harold Furchtgott-Roth, who called it a naked attempt by the commission "to distance itself from certain federal charges."

Opposition to any reforms will come from the influential American Library Association, whose members benefit from this popular entitlement. Justifying E-rate taxes is a top priority of the ALA's Washington office, and the group mounted lobbying campaigns when E-rate appeared to be threatened.

Reformers once tried to fix E-rate and then phase it out over five years. Both Rep. Billy Tauzin, R-La., and Sen. Conrad Burns, R-Mont., introduced legislation in 1998 that failed.

One reason Tauzin and Burns didn't succeed six years ago: E-rate's waste and fraud had not come to light. The difference today is that Rep. Barton has far better arguments on his side.

Biography
Declan McCullagh is CNET News.com's chief political correspondent. He spent more than a decade in Washington, D.C., chronicling the busy intersection between technology and politics. Previously, he was the Washington bureau chief for Wired News, and a reporter for Time.com, Time magazine and HotWired. McCullagh has taught journalism at American University and been an adjunct professor at Case Western University.

More Perspectives

E-Rate

I find this hostility towards the E-Rate program and ALA rather surprising. I come from a rural area (though now in Austin), and my mother spends MUCH of her time writing grants to make sure that schools in the area where we're from- the Rio Grande Valley- get the connectivity they need. This would absolutely not happen without the E-rate program. You appear to favor punishing the community the program serves rather than the corrupt vendors and officials you mention. The program needs to be improved, there's no doubt about it. That would ensure the community is better served and our money isn't wasted- but to get rid of it entirely would be a terrible thing.

[aglennon]

Shouldn't be any fees at all!

Just like the "Federal Universal Service Fee", the "Federal Access Charge" and all the other Federal, State and Local Municipalies fees - ALL BOGUS. Ask the phone company to explain what each of these mean - they just stumble on words - they can't give a direct answer. Oh, it's to help schools, libraries and rural areas get service??? Yeah, that's why the Macoupin County IL (example) area still has NO CELL PHONE SERVICE, yet residents there are told when they buy a cell phone that their coverage area is "nationwide".

So all the phone companies recklessly tack on these illegal and numerous fees but don't follow through with what they are intended for. So how many telecom bigwigs has this made rich? We'll never know and the government won't regulate these companies; they're never going to crack down on them.

Wasn't there a law some time ago that service charges could not have taxes added? What happened? The phone and cable companies make millions off of their customers from basic charges alone. There should be no other "fees" whatsoever added to "services". More fleecing by our government - what's new?

[Darkelfo]

No Mention of the Purpose of E-rate?

Sure, its bloated. Sure, its been mishandled. But don't forget that the purpose behind E-Rate is to help economically disadvantaged schools and libraries get connected to the Internet and reduce their telecom costs. For a few bucks on every on my phone bill, kids in low-income neighborhoods get Internet access at their local schools and libraries.

If you're a privileged libertarian, then Big Government sucks no matter what the purpose. If you care about bridging the digital divide, then a reformed E-Rate is a good approach.

This country has long engaged in modest income distribution for purposes like getting telecom access to rural areas where it was too costly in a business sense to put up phone lines. Why some people want to rip the DSL connection out from some poor kid whose library or school can barely afford textbooks is beyond me.

Fix E-rate. Create accountability. But don't ditch a program with such lofty aims as getting poor children and disadvantaged library patrons on the Net.

[John Kuzak]

too costly

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E-Rate: Be responsible in your reporting

I'm surprised that you didn't bother to take the time to present the other side of the E-Rate program. You know, the one that lawmakers who have the program in their sights have consistently refused to acknowledge? E-Rate gives schools and libraries in communities at poverty or near-poverty levels the opportunity to receive financial reimbursements or discounts on bills related to telecommunications and/or internet access. Why does this matter?

It matters in my library because our community is in the 80% discount bracket. That means that the community we serve has 80% at or near the poverty level. Since we are located in what's considered a rural area, we don't have the sort of funding that a metropolitan library would have. With E-Rate, we are able to use the money from that 80% discount to help fund literacy efforts, purchase more books, and/or cover budget items that have been cut as "unimportant".

Please take the time to investigate all sides of an issue before standing on your soapbox and declaring right or wrong. I'm planning to give Rep. Barton and his colleagues the same advice.

Thank you for your time.

The Real Culprit Behind E-Rate Problems?

I am never surprized at the duplicity that the public displays for government programs that are intended address a serious national problem to suddenly becoming expendable because of poor, inept management and corruption. We somehow convince ourselves that it was either illegal to begin with or was a bad idea in the first place. On the one hand we complain about how bad the public educational system is and needs reform. Then when an attempt to standardardize equal access to the Internet for all of our children occurs the effort is undermined and betrayed by greedy companies and local policians. I don't hear many calls for making the companies and local administrators pay for defrauding schools and children. Instead let's save $10.00 per year on our phone bills and come up with another well intended government program and start the process all over again.

Lack of funding, undermining of federal educational initiatives by Congressional and Senate members along polictical lines, not having competent IT Staff at local school districts, local inside political deals with IT companies, inadequate accountability standards from the federal government to local municipalities are all factors that continue to hinder improving the quality of public education this country. For once I would like to see a government educational initiative not abused and discarded due to poor planning in the begining and no safeguards to assure success.