Shocker: More USF Waste

from the where-do-i-sign-up-for-this-program dept

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.

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Shocker: More USF Waste”

Subscribe: RSS Leave a comment
B Cain says:


The true connection between the Vulture of Sandwich Isles and Michael Powell.

Read the article from Forbes October 2002. Yes, the USF and its croonies are a bunch of vultures! They are tightly wooven together and those of you who voice otherwise just don’t want us common folks to know that we have caught on to you.

Yes, the internet is a lovely history tool.

Annapolis helped Hee in other ways, too.

It was through a former classmate that he later made the acquaintance of Michael Powell, now chairman of the FCC.

Wire Cramped (user link) says:


I went to the website of the USF administration. I asked the top lady of my region for a printout of the monies given to the schools and libraries in my little area and told her that I will file suit if I dont get it within 2 weeks.

2 weeks are up this wednesday and I will be sending my lawyer a letter to start a class action against the USF administration and any orginizations that are part of this funds management (read telcos).

I will post a new website where anyone can post their comments and track the results of this case.

I am a doer not just a BS artist and this is one where my children are affected by money taken from me that they never see. I will get it back to their school.

B C says:


I hate how the USF tries to hide how they disburse monies. I have been doing a little research on my own. They try to make it as difficult as possible for us to know where our USF funds are being spent.

Here is the website that you can go into for the school and libraries.

Just remember, that you will have to go into EACH WAVE (there are 52 waves for the year 2005) and then you will have to go to your state and then the disbursements are supposed to be listed in alpa order.

Hope this helps.

Wire Cramped (user link) says:

Re: Fiber

yes to a rural area where more then likely most people wont want or cant afford the cost of the connection as it will be jacked due to being in a rural area.

The rural people didnt get asked if they wanted the line or would they rather have the money spent on their childs school they simply were given a line that costs a ton and a choice to use it or not. BUT the telco providing says “Ouch that cost us so much we need 13,000 to help us cover our costs to administrate that line that isnt being used.” So the USF charges us city folk money to cover the administrative costs of a line that isnt used by a person who either doesnt know its there or doesnt want it.

So I am starting a telco in the middle of nowhere and installing lines as fast as a fat kid on cupcakes so I can get a bank load of assistance from the USF before it goes under!

Richard says:

Correct this MAJOR ERROR

Um, think about this for a second. Do you think the son of a four star army general went to the *naval* academy?

Powell is a graduate of William & Mary, and is on the board of governors there. He resigned in February 2005, this decision was made under Kevin Martin in May 2005. This story is bunk.

That’s not to say that the USF isn’t a fraud-filled boondoggle. It is, but point the blame where it belongs: Congress and the USF champion there, Commerce Chairman Ted Stevens.

Add Your Comment

Your email address will not be published.

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...