Thursday, July 27, 2006

Those Little Phone Taxes

So as I peruse my cell phone bill, I see this little line-item for the Texas Universal Service Fund. This, for those who don't know, is part of the FCC-mandated Universal Service Fund.

The basic idea was this. Back in the day, there were people living in what we call "The Sticks". To run a phone line to 20 houses on one street was cheap, but to run a phone line to six houses along a 10 mile dirt road was ex-damn-spensive. Those wacky congresscritters thought that this was unfair, so they decided to tax city-folks' phone lines and to give that money to rural phone companies to encourage "Universal Service". And lo, the hills and dales had phones and the rabbits and the squirrels danced their little woodland dances and all was well in the world.

Jump to 2006. Having a cell phone and a landline for DSL, I currently pay around $6/month - that's about $70 a year, to subsidize these rural phone lines. Over at Marginal Revolution, some intrepid soul dares to ask, are they getting my money's worth?

The answer is that this has devolved* into yet another bit of corporate welfare which yeilds dubious results in terms of actual benefit per dollar.

* assuming it was ever anything more than corporate welfare.

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