How to save taxpayers $1,000,000,000 per year

Cellular News

Cheaper to "Give Away" Free Cellphone Services in Rural Areas

U.S. taxpayers are getting stuck with the tab for up to US$13,345 per telephone line per year for federally subsidized phone service under the US$7-billion "Universal Service Fund" tax on long-distance service, according to a new study conducted for The Seniors Coalition by George Mason University Professor of Law and Economics Thomas Hazlett.


The "gold-plated" waste and inefficiency under USF is so out of control that taxpayers actually could save at least US$1 billion or more each year by simply giving away at full retail cost satellite or cellular phone service to the few remaining Americans who do not currently have access to wireline phone service, according to the study.

The Hazlett study notes that, rather than providing phone-service to low-income consumers in need, the bulk of USF taxpayer dollars are now part of a $3.7 billon wealth-transfer subsidy known as the "High-Cost Fund" that goes from unwary U.S. taxpayers to small, uneconomical private rural telephone companies that often have only a few hundred customers and are so engorged with tax dollars that they can afford to pay out more in dividends to shareholders than they actually charge for phone service.
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