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Friday, June 30, 2017

Hey, where you going with that money?

The punches just keep coming.  In April, Chairman Pai let USAC have it. Last month, Commissioner O'Rielly said, "I believe that all options should be on the table, including putting USAC’s functions out for contract...."  In response to yesterday's GAO report that found problems with the Lifeline (née Low Income) Program of the USF, Commissioner O'Rielly said: "I have little the ability of USAC to stem the tide of problems. More significant reform is needed, including completely rethinking USAC.”  He sure has it in for USAC.

Of course, I only wanted to look at the summary of the GAO report (basically scanning for anything E-Rate-related).  Let's see: blah blah blah blah
"In March 2017, FCC developed a preliminary plan to move the USF to the Treasury."
[record scratch]

Say what now?!  Where is this plan?  To the full GAO report!

Page 23: "According to correspondence received from the FCC Chairman’s Senior Legal Counsel, as of March 2017, FCC has decided to move the funds to the Treasury....  FCC’s Office of the Managing Director prepared a preliminary project plan for moving the USF to the Treasury with the goal of completing the transfer in approximately 1 year."

Oh, crap!  As I said back in 2005, this is step one to killing the E-Rate.  Get it into the Treasury so that it will be easy to "so underfund it that it goes away."

Do you think I'm being paranoid?  OK, maybe, but that doesn't mean I'm wrong.  Back on page 23 of that GAO report:
"...FCC explained that having the funds in the Treasury could allow USF payments to be used to offset other federal debts...."

It seems to me they're saying that the USF could be used to pay down the national debt.  At this moment, the federal debt is $19.96 trillion, which means the $10 billion that USF collects annually is 0.056% of the debt.  The government is paying something like 0.8% interest on t-bills, so we'd need 15 times the total amount of the USF just to pay the interest on the debt.

This is bad.  When was the FCC going to tell us about this?

Is this a silver lining?
Page 24: " May 2017, while reviewing a draft of this report, a senior FCC official informed us that FCC experienced some challenges associated with moving the funds to the Treasury, such as coordinating across the various entities involved, which raised some questions as to when and perhaps whether the funds would be moved."

Stay tuned.

Meanwhile, back to the sidelong glance the FCC seems to be giving USAC.  Page 24: "beginning in November 2016, FCC sought to amend the contract between USAC and the bank to enable the bank to act on FCC instructions independent of USAC in the event USAC ceases to be the administrator."

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