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March 22, 2005
End The Gore Tax
Posted by Dana Blankenhorn
Thats what Republicans called it, when they were campaigning for power a few years ago.
The Gore Tax was their name for the E-Rate program. Its aim was to help poor schools cross the digital divide by subsidizing their access costs.
It has been a bipartisan disaster. In practice its nothing more than a subsidy for the Bells, who had the law written in such a way so that they got the money automatically unless they refused it for some reason.
This means, in practice, that the subsidized rate schools pay may in fact be higher than the alternative market rate. Bells are charging hundreds of dollars per month for T-1 customers who could easily be supplied by WISP DSL service at a fraction of the cost.
It gets worse. The E-Rate was also used for hardware, so schools stuck themselves with obsolete PC technology to boot. Youve got obsolete PCs held by captive customers who cant upgrade.
Now Declan McCullagh reports that Rep. Joe Barton wants to put the E-Rate out of its misery and Ive got to applaud it.
McCullaghs headline is cheaper phone bills on the horizon, but dont you believe it. I guarantee that any Bell savings from this will not be passed on to you.
But theres freedom in this for the schools. They can negotiate a better rate with the market than they can get tethered to the government.
And the Bells lose a big fat subsidy.
Sounds like a win-win to me.
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