We can’t be stuck in the 19th century when we’re living in a 21st-century economy.
With those words, President Obama introduced a new initiative called ConnectED. The program would connect 99% of all students in America to the internet through high-speed broadband and high-speed wireless in schools and libraries within five years. Citing statistics that indicate that American students have far less access to high-speed internet in their classrooms than their counterparts in countries like South Korea, the President noted, that “[t]he fact is, schools without internet access put our students at a disadvantage.”
The President made these comments just over two months ago. At the time, he also directed the government to “make better use of existing funds” to get high-speed internet and other technology into schools. He also asked for private support from businesses, states, districts, schools, and communities noting that this vision required “no congressional action.”
It sounded terrific. But as the program was being touted in schools across America, what wasn’t being talked about was how much the program could cost and who was going to pay for it.
The administration’s own estimate of the cost of the initiative falls somewhere between $4 billion to $6 billion. In today’s economic climate, that happens to be about $4 and $6 billion more than we have to spend right now on new programs. But the administration has a plan to pay for it: raise fees on cell phone users.
I know, I know. It’s politically dangerous – but only sort of. By funding it with cell phone user fees, the administration doesn’t have to get that congressional action that he alluded to in June. In fact, Congress doesn’t have a vote at all: it’s all up to the Federal Communications Commission (FCC). The FCC has the right to boost fees to fund certain kinds of programs via the universal service fund (USF).
The USF isn’t without controversy. It was created as part of the Telecommunications Act of 1996; the Act had a number of goals including increased internet access to doctors and patients in rural hospitals and free or subsidized coverage for families who can’t afford it (so that they have links to emergency and government services). One of the goals of the Act, in particular, makes it a prime vehicle for ConnectED: increased access to telecommunications and advanced services in schools, libraries, and rural health care facilities.
One of the selling points of the Act was that it wasn’t taxpayer-funded – not exactly. Taxpayers do pay for programs under the Act but not directly through the federal income tax system. Instead, to pay for services, the Act “mandated the creation of the universal service fund (USF) into which all telecommunications providers are required to contribute a percentage of their interstate and international end-user telecommunications revenues.”
That little fee on your phone bill labeled USF? That’s what you’re paying for.
The USF made news last year when this YouTube video went viral:
In the video, a woman dubbed the “Original Obamaphone lady” in Ohio screamed about her “Obamaphone” telling, “Keep Obama in president, you know! He gave us a phone, he’s gonna do more.” Those “Obamaphones” were cell phones reportedly handed out to the poor as programs in place to help low-income customers have access to basic telephone service. Those programs do exist as Link-Up America and Lifeline – though the Obamaphone claims are perhaps a bit overstated – and are funded through the USF.
At a time when taxpayers already felt stretched, the program – and the Obamaphone lady – hit a nerve with taxpayers.
And now, it’s deja vu all over again.
If approved, the plan to pay for ConnectED could result in as much as $12 in increased fees for cell phone customers over three years. It’s not popular and would clearly never be approved by a Congress already expressing frustrations over pressure to reduce spending while keeping revenues from taxpayers low. But since it’s a fee – and not really a tax, right? – it doesn’t have to go through Congress.
President Obama was clearly aware of how those semantics play in his favor. When selling the program to his staff, he reportedly told them, “We are here to do big things — and we can do this without Congress.”
