Another dysfunctional e subsidy program, this time in America

Posted on July 20, 2013  /  0 Comments

The money comes from everyone with a telecom connection in the US. And the government has trouble pushing it through. Five billion USD is a lot of money to keep unspent. Here, we’ve been griping about India’s USD 4 billion and Brazil’s USD 4 billion plus.

The E-Rate program has been faulted for inadequately allocating money in the fund, which is provided through a tax on consumers’ phone bills, a monthly charge between 50 cents and $1.

Commissioner Ajit Pai, the lone Republican on the five-member commission (where two seats are vacant), criticized allocations of the fund, saying an average of only $1.8 billion had been spent in each of the last 10 years, leaving more than $5 billion unused in the E-Rate account.

Mr. Pai also complained that the program placed greater emphasis on the wrong services.

“E-Rate today prioritizes long-distance telephone calls and getting phone service to a school’s bus garage over wiring up a classroom,” Mr. Pai said in a speech this week at the American Enterprise Institute.


As is customary with subsidy programs, there is no talk of phasing it down, just of improving it.

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