The E-rate program, which funds school technology, is riddled with waste and fraud, says a belated New York Times story.
When the El Paso school system wanted to upgrade its Internet connections three years ago, it tapped into a federal program that offers assistance for such projects.
The program paid the International Business Machines Corporation $35 million to build a network powerful enough to serve a small city. But the network would be so sophisticated that the 90-school district could not run it without help.
Foreseeing the problem, I.B.M. charged the district an additional $27 million, paid by the federal program, to build a lavish maintenance call-in center to keep the network running. The center operated for nine months. Then, with no more money to support it, I.B.M. dismantled it and left town.
The federal effort to help poor schools connect to the Internet, the E-rate program, which collects a fee from all American phone users to distribute $2.25 billion a year to such schools and libraries, wasted enormous sums as El Paso built its extravagant network in the 2001-2 school year, according to documents and federal lawmakers.
President Bush is letting the E-rate become an national entitlement, complains Cato.
Everyone would agree that textbooks are an indispensable teaching aid. Policy makers have never suggested, however, the inclusion of a hidden tax in the cost of new novels to help lower the cost of textbooks in the classroom. Such an absurd cross-subsidy would be considered inefficient and unfair. Yet that is how the E-rate program operates. Hidden taxes on the phone bills of average Americans cross-subsidize school wiring efforts.
Cato urges the president to dump the “Gore tax” and let states decide if the benefits of school technology merit extra funding.