The Universal Service Fund has come under some heat lately, as it's becoming increasingly clear it's little more than a poorly managed, unaccountable boondoggle. Adding further fuel to the fire is a story from last year that's been dug up, pointing out
how just before Michael Powell left the FCC, he the FCC approved a waiver that let a Hawaiian telco get $500 million in USF money -- to wire 20,000 lots there. Only 5,400 of those lots are occupied, and at current growth rates, it will be 40 years before they're all in use. So for those keeping score at home, that's roughly $93,000 for each of those 5,400 lots. But it gets better: most of those people already have landlines from another telco. Want one more? The president of the company apparently was a Naval Academy classmate of Powell's. The story may be a bit old, but again highlights the many unanswered questions about the USF. For the company in question, it looks like it's got a good thing going. Before this approval for $500 million, it had already received $160 million in federal aid to build a network that had 1,300 customers -- that's a cool $123,000 per customer. Update: Looks like the original article's indictment of political favoritism was off base, as Powell never attended the Naval Academy, let alone in the '70s, graduating from William and Mary in 1985. Also, this particular decision came after he'd left the FCC. The attack on Powell was unwarranted, but plenty of questions remain about the original deal and what looks like some questionable USF funding.
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