Report: Billions Wasted Annually On Federal Phone Subsidies

The coast of Maui, HI (Courtesy Wikimedia Commons)

Everyone remembers the story last fall of the infamous ‘Obama Phones’ and how it was yet another example of government waste gone wild. Individuals nationwide were given subsidized cell phones costing taxpayers more than $2 billion dollars, and what was worse was the revelation that some individuals taking advantage of the program were in turn selling the phones to make a profit.

Now, in a stunning revelation, a study to be released later today (July 10) by Thomas Hazlett, a George Mason University Professor and former chief economist at the FCC, and Scott J. Wallsten, vice president for research and senior fellow at the Technology Policy Institute and senior fellow at the Georgetown University Center for Business and Public Policy, will show that the Federal Communications Commission has thrown away more than $60 billion in the last fifteen years on service extending phone subsidies. The program not only billed these subsidies at a high cost but the service only went to one-half of one percent of total U.S. households.  Details of the upcoming report surfaced earlier this week including:

• Massive waste and abuse of up to $24,000 per phone line per year for subsidies intended for underserved rural areas, but actually going into wealthy enclaves like the Hawaiian island of Maui, the ski resort area of Breckenridge, CO, etc.
  
  
• 10 small telephone carriers in Alaska, Arizona, Colorado, Hawaii, Michigan, Oklahoma, Texas, and Washington were paid sky-high subsidies of more than $10,000 per line in a single year
  
  
• One company in Washington State raked in nearly $24,000 per line in federal subsidies for 16 telephone lines in and around a resort lake town.

The Taxpayers Protection Alliance will continue to follow developments on this issue and will call on the FCC and incoming Chairman Tom Wheeler to rein in this kind of wasteful spending that does taxpayers little, if any good.