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Monday, June 27, 2005

How the E-Rate will be killed

When I first heard about the FCC determining that GovGAAP accounting standards should be applied to the USF, I thought: "If I wanted to kill the E-Rate, I'd move the fund into the treasury. Applying GovGAAP rules to the fund would be the first step." I thought I was just being paranoid.

Then came the GAO report on the E-Rate, which said that having the fund outside the Treasury was creating many problems.

The CBO (Congressional Budget Office) released a report saying that the economic impact of Universal Service would be less if it were simply taken from general revenue, rather than as a user fee.

It was starting to sound to me like a campaign to get the E-Rate into the Treasury, funded by income tax. That would spell the eventual death of the fund. As it stands now, the government's alternatives are E-Rate or no E-Rate. Once it's in the treasury, then the E-Rate is one of many priorities, and Congress has to choose: E-Rate or Medicaid, E-Rate or the war in Iraq, E-Rate or NCLB. Eventually, E-Rate funding would dwindle and vanish.

It turns out I wasn't being paranoid. On April 12, Congressman Joe Barton (R-TX), chair of the committe overseeing the E-Rate, said in a speech: "If I can't kill it, I'm going to do everything I can to so underfund it that it goes away."

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