The $100,000 Obamaphone for Millionaires

Photo Credit: National Review The Obamaphone lady is moving up in America: She isn’t a rabble-rouser in Cleveland anymore, but a real-estate developer in Maui, a ski-resort owner in Breckenridge, and a dedicated golfer in Scottsdale — and, more important, the telephone companies that serve them. And she isn’t costing taxpayers a couple hundred bucks a year in subsidies, but more than $100,000 per household.

That’s the finding of a new study released by economists Thomas Hazlett of George Mason University and Scott Wallsten of the Technology Policy Institute, who have turned their attention to the aptly named “high-cost fund” administered by the Federal Communications Commission and supported by the 16 percent universal-service tax levied on everybody from landline users to voice-over-IP customers. The fund has spent some $64 billion on carrier subsidies since 1998, and while there is some dispute about how many additional households have phone connections thanks to those outlays, the highest estimates run around 600,000, meaning a cost of more than $100,000 per household.

The program was originally developed to help extend basic communications to poor people in remote rural areas without telephone service. But the United States ran out of poor people in remote rural areas without telephone service a good long while ago. The administrators of federal programs fear nothing so much as looking for a job in the private sector, so the program found new products to subsidize, such as broadband internet, and new places to subsidize them: No more dirt farms in the sticks, but high-end developments — “mansion-lined gated golf communities” in the words of Dave Herman of the Alliance for Generational Equity, which sponsored the study.

According to Hazlett, the $4.5 billion-a-year program has connected at most 0.5 percent of U.S. households to telephone service.

Read more from this story HERE.