Who's bleeding now?

Everyone seems pretty sanguine about the prospects for the E-Rate program under Obama and his pick for FCC Chairman, Julius Genachowski. So, of course, I'll take the contrarian view.

I'll start by talking about how the E-Rate managed to survive the Bush presidency and Rep. Joe Barton, who openly campaigned for it's demise. When Bush arrived in office, he wanted to end the E-Rate. What stopped him? I think it was the discovery that the funding never goes into the Treasury, so abolishing the E-Rate would not have freed up money for other priorities. And since the E-Rate brings money into every Congressional district in the country, Congress is reluctant to just kill it. Seeing that he couldn't outright kill it, Rep. Barton correctly reasoned that if he could get the E-Rate into the Treasury, he could "bleed it dry": once the E-Rate was just one of many competing priorities, it could slowly be cut and cut and cut. He was working on that until he lost his chairmanship when the Democrats took over the House.

Now here comes the Obama presidency, and everybody's happy with his new pick for FCC Chairman. They're both tech-friendly, and Genachowski even helped pen the original Report and Order. And Obama's Technology and Innovation Plan seems very pro-E-Rate. It sounds like he's going to expande the E-Rate: "Obama will recommit America to ensuring that our schools, libraries, households and hospitals have access to next generation broadband networks. He will also make sure that there are adequate training and other supplementary resources to allow every school, library and hospital to take full advantage of the broadband connectivity." (Will training become eligible? Or is it already?)

Nothin' but blue skies.

So what's that dark little cloud on the horizon?

Well, as more and more programs are paid from the Universal Service Fund, there will be pressure to take money from the E-Rate. How about those rollover funds we get every year? Why not take that unused funding and roll it into funding home broadband connections? I mean, every school has broadband, but most houses don't, so where is the priority? In the past, I worried that the ballooning High Cost program would take funding from the E-Rate. Now it looks like new programs will be competing for Universal Service funds.

How ironic if Rep. Barton's dream of killing the E-Rate comes true because of an expansion of the Universal Service Program.