Hawaii’s High-speed Internet Bailout
The Universal Service Fund (USF) is the tax on your phone line that subsidizes connections for rural and lower income households, as well as schools and libraries. The USF program has a long history of waste and abuse. However, thankfully Congress is working hard on a bill that would reform the fund. It contains a number of necessary provisions that would reign in wasteful spending, especially by redefining and limiting who exactly is eligible for payments. However, ATR is still concerned that the legislation doesn’t a cap the overall size of the multi-billion dollar fund. The USF rate sits at 15.3% today, rising 5.8% since President Obama’s new FCC took over in 2009. Below is a piece in the Washington Times highlighting one Hawaiian company that has built their entire business model around accepting USF taxpayer money, mostly thanks to their political connections.
OP-Ed:
You’ve probably never heard of the company because it has only a few thousand customers. But every day, you pay it to connect a handful of rural Hawaiians to the Internet - to the tune of more than $20 million per year.
The Universal Service Fund (USF) is that pesky tax on your phone bill that subsidizes connections for rural or lower-income households. The multibillion-dollar fund has caught enormous flak over the years for waste, fraud and abuse. And amid an ongoing and much-needed debate in Congress on how to reform the USF, the Federal Communications Commission is set to rule any day on the future of one small, politically connected company that built its entire business around receiving these taxpayer funds.