E-rate Tax

October 20, 2000

Perhaps you have heard the old joke: "If you think taxation without representation is bad, you ought to try taxation with representation." So begins a column in Forbes by Caspar Weinberger. Unfortunately the rest of the column isn't very funny.

He gives the history behind the tax on long-distance calls. If you look at your latest bill, you will see something listed in your bill that seems a bit obscure. I believe that is intentional, because the way it ended up in your bill is downright devious.

The charge is supposed to pay for getting our schools and libraries connected to the Internet. Frankly, I would like to know what schools and libraries we are talking about. In the last few months, I have been in more than a half-dozen states and haven't seen any evidence that any school or library is not connected. Well, the annual intake from this tax levy is $2.25 billion.

It turns out that this tax was never formally adopted by Congress. Vice President Al Gore had a small clause placed into the Telecommunications Act of 1996. It was supposed to offer discounts to schools for connecting to the Internet. The FCC promptly interpreted this language as authorizing it to establish an "E-rate." This is essentially a tax on long-distance telephone users. With no action from Congress, the FCC created three new bureaucracies. After paying for these new federal employees and new contractors, the rest of the money is supposed to be sent to the schools.

By the way, the head of the principal authority was a former Gore fundraiser who was paid a higher salary than any member of the President's Cabinet. These three entities have since been reorganized into one and Mr. Gore's friend is gone.

So even though more than 95 percent of schools are connected to the Internet, you are being charged on your phone bill for a tax Congress never passed.

I'm Kerby Anderson of Probe Ministries, and that's my opinion.