Today, Citizens Against Government Waste (CAGW) named Federal Communications Commission (FCC) Chairman Tom Wheeler its December Porker of the Month for taking the FCC on a high-tech holiday spending spree by increasing funding for the Universal Service Fund’s (USF) E-Rate program. On December 11, 2014, the FCC voted 3-2 to approve the chairman’s proposal to raise the spending cap on the E-Rate program by $1.5 billion annually, resulting in a 17.2 percent increase in the USF fees charged to Americans on their telephone and wireless bills. The E-Rate program, which provides schools and libraries with discounts on telecommunications and Internet access, is one of four programs funded through the USF. While it may have a laudable objective, the E-Rate program duplicates private sector efforts to increase broadband access for educational institutions and has become riddled with wasteful spending. It should be reformed, not expanded.
“Chairman Wheeler’s analysis shows that he is disconnected from reality”
The FCC has complete control over the amount of USF fees and can raise the rates and spending caps at any time. The fees are passed along to consumers in the form of a hidden tax on their telephone and wireless bills. In a December 11, 2014 statement trivializing the economic impact of the higher E-Rate spending cap, Chairman Wheeler said that “…what Americans contribute to the E-Rate fund means that over time, the support paid by consumers could grow by approximately 16 cents a month for a telephone line…over the course of the year that represents one cup of coffee at Dunkin Donuts or one large soda at McDonald’s – per year.”
“Chairman Wheeler’s analysis shows that he is disconnected from reality,” said CAGW President Tom Schatz. “The approved increase in the E-Rate spending caps does not include any reforms of the program’s burdensome administrative procedures and lengthy application process, nor does it reduce wasteful spending.”
Some of these reforms were included in CAGW’s book, Telecom Unplugged: Ushering in a New Digital Era. FCC Commissioners Michael O’Reilly,Ajit Pai, and Jessica Rosenworcel have all advocated for additional E-Rate program auditing to root out wasteful spending, simplifying the application process, increasing flexibility for schools to choose speeds that best meet their needs, and streamlining the sclerotic administration process. None of these proposals would cost consumers any more money; yet none have captured the attention of the Chairman.
“Chairman Wheeler has resorted to the usual, hackneyed political rhetoric to justify more hidden taxes and more wasteful spending, using students as convenient props. On top of his misguided idea that the FCC should subvert state laws that prohibit or restrict taxpayer-funded local municipal broadband systems, Chairman Wheeler is putting a big lump of coal in taxpayers’ Christmas stockings,” added Schatz.
For imposing higher hidden taxes on consumers; expanding a bloated, mismanaged program; and ignoring commonsense solutions for modernizing and reforming the E-Rate program, CAGW names FCC Chairman Tom Wheeler its December Porker of the Month.
Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.