In a bid to rescue the Universal Service Fund, a decades-old collection of broadband subsidies riddled with waste, fraud and abuse, policymakers are considering a tax on internet subscriptions. A new tax on one of consumers’ most affordable expenses is the wrong solution.
Ever since it began in 1996, the USF has been plagued by inefficiency at best, and fraud at worst. Right away, millions of dollars were paid to a fake service provider. Then, in 2017, nearly half of all Lifeline beneficiaries, the USF component giving discounts to low-income households, could not be verified as legitimate.
This year, the inspector general at the Federal Communications Commission unearthed shady enrollment practices in Lifeline that funneled millions of dollars to telephone carriers for deceased customers. USF has always been plagued with poor money management.
Nate Karren is a Policy Analyst with the American Consumer Institute, a nonprofit education and research organization. Follow Nate on X @NateKarrenOnX