Will President Obama Bypass Congress & Raise Wireless Taxes with ConnectEd?

The hot summer in DC is coming to a close, but the action in Congress will soon heat up as lawmakers will return in less than a month and with issues ranging from the budget, to Obamacare there’s plenty on the agenda. The President, in a pattern we have seen again and again, has decided to attempt to bypass Capitol Hill again as he seeks a new goal of providing high-speed Internet for nearly all schools across the country over the next five years through his ConnectEd program. According to The Washington Post, this is “an ambitious plan to expand high-speed Internet access in schools that would allow students to use digital notebooks and teachers to customize lessons like never before.”

The plan is ambitious and down right sneaky because President Obama wants to circumvent congressional approval for the new tax and pass the tax directly through the Federal Communication Commission (FCC). The cost of this program is estimated at upwards of $6 billion dollars and the mechanism used to pay for it: raising fees of mobile phone users. The FCC is supposed to be an ‘independent’ agency, but is stacked with Obama appointees including incoming Chairman Tom Wheeler.  Wireless users already pay an average of 17 percent in taxes for their wireless (see study here).

There are initiatives similar to what the President is proposing with ConnectEd and the results have been less than impressive and have come at the expense of taxpayers. The Rural Utilities Service (RUS) Broadband Loan Program, who’s primary goal is to provide loans to help bring Internet broadband service to unserved rural communities, which are generally defined as communities with populations of less than 20,000 has been not only harmful but counterproductive.  TPA exposed RUS’s flaws in a letter to congress this year pointing out the misuse of the taxpayer dollars that fund it:

A March, 2009 report by the U.S. Department of Agriculture’s (USDA) Office of Inspector General (OIG) observed that while the 2008 Farm Bill modified the broadband program and narrowed the definition of “rural area,” RUS continued to issue loans in exurban and suburban areas. Instead of funding deployment in unserved rural areas, the RUS had funded service in 148 communities which were within 30 miles of cities with 200,000 inhabitants, including communities near very large urban areas such as Chicago and Las Vegas.

According to a report by the USDA on April 23, 2012, “We found that RUS had not maintained its focus on rural communities most in need of Federal assistance. This is largely because its definition of ‘rural area,’ although within the statutory guidelines, was too broad to distinguish between suburban and rural communities. As a result, RUS issued over $103.4 million in loans to 64 communities near large cities.”

The second problem here is that the private sector can, and has shown the desire and capability to spearhead these types of initiatives with great success. Last week, Comcast announced that they were expanding their Internet Essentials program aimed at providing expanded access and it is the “nation’s largest and most comprehensive broadband adoption program.  It provides low-cost broadband service for $9.95 a month plus tax; the option to purchase an Internet-ready computer for under $150; and multiple options to access free digital literacy training in print, online, and in-person.” The program has made enhancements to the quality of the product they are providing as well as making adjustments to allow for greater eligibility in communities nationwide. To date: 220,000 households with an estimated 900,000 people have been connected by Comcast under the program. This amazing feat is further evidence that the private sector is committed to filling in the gap where the government has failed.

The final aspect that is troubling with the President’s ConnectEd directive is that we are seeing this time and again with this administration and TPA just laid out another example yesterday with the ‘social cost of carbon’ story (read here). The Obama Administration has used the power of the Executive Branch and various agencies to carry out policy initiatives bypassing the House and Senate thumbing their nose at the very notion of checks and balances. The President said it himself, in discussing the move forward with ConnectEd:

“We are here to do big things — and we can do this without Congress.”

The Taxpayers Protection Alliance is opposed to adding a greater burden on taxpayers for another government run initiative and further expanding the power of the executive and ignoring the legislative and oversight authority of the Congress.  If the President is successful, this will truly be taxation without representation.