I recently wrote an article in praise of Verizon FIOS. I noted in the comments that I had heard Verizon had stopped expansion of the project and wondered why.  A commenter said the reason was that Verizon was waiting for government money (another needless bailout).  In that I cannot blame them.  Free money (i.e. not yours) is an opiate for any company (and most individuals).  But his explanation reminded me of another government program that has long outlived its usefulness and indeed, is rife with waste and perhaps even fraud. E-Rate

Back in the mid 90s, congress extended a tax (or actually a new use for an old tax that had long outlived its usefulness). The tax, the USF (Universal Services Fee) is paid by you and me and everyone that has a phone.  The original use was to ensure that every American had access to phone service.  For anyone not living in a cave, you know that the purpose of that tax was long ago served and the whole country was wired for phone service (this was before Cell phones became a right).

So in the mid 90s, congress added broadband service to the purpose.  The goal was to wire every school and library into the Internet.  That has also long ago been done, yet you continue to pay that fee (check your cell phone and landline bills).  Why?  Well, because it is now a way to subsidize schools!

At the time of the passage, I was working for a local school division.  They had just been given $35 million (soon to be more than doubled) to put computers in every elementary classroom (expanded to secondary 3 years later plus giving every 6th through 12th grade student a laptop), and then network them and connect all the schools to the Internet.  But this county was not stupid.  They had already gotten a way to connect all the schools in a MAN (Metropolitan Area network) free.  How?  The county made it a condition of the cable franchise.  The cable company had to lay the cable, connect it all into a head end, and maintain the physical plant.  The County and Schools would then maintain the logical network. 

In order to do this they had already set aside money to buy the routers, cable Modems, and personnel.  I was in charge of hiring the staff and making it happen.  Then the E-Rate program kicked in.  Seeing a way to get a LOT more bang for their bucks, they started applying for the funds (and got a lot since they were way ahead of the game as far as planning).  Indeed, the way the law was crafted, the money that was supposed to pay for routers, modems (cable) and any network devices, could also be used for paying "consultants" salaries!  This school division did not need the money.  The taxpayers of the locality had already paid for it.  But hey!  They could take the money they were going to use for all that stuff and use it on other stuff!

So they got the grants!  And more so!  By firing the technical staff, they could hire them back as consultants and pay for them out of the E-Rate program!  It was a really sweetheart of a deal. 

Today, every school in the nation has some sort of Internet Access.  As does every library.  Has the "fee" gone away?  If you asked that question, you are either not paying bills, or do not look at yours when you do.  The answer is no,  You are still paying for "Universal" phone service (that has been accomplished) and "Universal" Internet Access (that also has been done).  And the fees still go to local school divisions and libraries for something they already have - but you do not hear about that when you hear them complain about money 9or when they got the last bailout from the feds last month).

No program created by the feds does what it is supposed to do, or if it does, is never "sunsetted".  We just keep paying to keep a bunch of over priced federal employees employed.