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FactChecker
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FactChecker

Anon

Errors in this piece

Currently about 26% of USF is used for E-Rate, not 40%.
»transition.fcc.gov/Daily ··· 14A1.pdf
The E-Rate used to have a higher share, but since the E-Rate is capped and the other programs aren't, it's share of funding has dropped.

You refer to "oodles of fraud" that "keeps bubbling up," but the links you provide are frauds that occurred in 2001 or earlier. Please show us more recent oodles.

As for the "endless flood" of GAO reports, I can think of 4. Could you provide links to the rest of the flood? I'll agree that the FCC has moved at a glacial pace on reform in response to GAO criticism, but that criticism is not tied to fraud in general.

By the way, you missed another recent piece on Jewish libraries in the same communities apparently abusing the fund:
»forward.com/articles/170 ··· subs/?p=

Can you be more specific on how the FCC (and USAC) audit practices are inadequate? I don't mean just pointing out cases of failure, I mean proposing how the system should be reformed. What accountability requirements would be more than "minimal"?

Can you give an example of a case where "money paid in...isn't tracked by the government"?

I think you have read news reports about people stealing from the fund, but have not actually ever applied for E-Rate funding. Because people who have been through the process thinks that the program needs more auditing.

Karl Bode
News Guy
join:2000-03-02

Karl Bode

News Guy

Currently about 26% of USF is used for E-Rate, not 40%.

Thanks, fixed. It was 40% not all that long ago.

You refer to "oodles of fraud" that "keeps bubbling up," but the links you provide are frauds that occurred in 2001 or earlier. Please show us more recent oodles.

»lmgtfy.com/?q=E-rate+fraud
»www.erateelite.com/news/ ··· wsID=360
»www.pcworld.com/article/ ··· aud.html
»www.fcc.gov/blog/houston ··· -settled
»www.erateelite.com/news/ ··· wsID=401
»www.infoworld.com/d/secu ··· rges-791
»www.internetnews.com/bus ··· raud.htm
»www.e-ratecentral.com/ar ··· 1229.asp

You're in denial if you think this isn't an ongoing problem.

As for the "endless flood" of GAO reports, I can think of 4.

You're kidding, right? Four GAO reports repeatedly showing the FCC fails to correctly track fund spending aren't enough for you?

I think you have read news reports about people stealing from the fund, but have not actually ever applied for E-Rate funding.

I've written about this stuff for twelve years now. I think you probably somehow benefit financially from these funds so you willfully ignore the problems with the fund out of fear that you'll lose money.

Because people who have been through the process thinks that the program needs more auditing.

On that we agree. To be clear, I certainly don't want to see the funding go away like the "all government is always bad" zealots. I just think it's repeatedly hysterical that the FCC can't correctly audit spending.

FactChecker
@comcastbusiness.net

FactChecker

Anon

Thanks for the reply.

Some of your links in your list duplicated the same fraud. You can find a better list of people who've been caught defrauding the program here:
»www.usac.org/sl/about/pr ··· nts.aspx
That list is also duplicative, so without going through and counting, I'd say we're looking at less than 40 cases of fraud since 1998. That doesn't seem like oodles to me. That's an average of less than 3/year, out of over 20,000 applications/year. If my Oodles of Noodles only had 3 noodles, I'd feel cheated. But I guess oodles are in the eye of the beholder.

The GAO reports were not all about how inadequate FCC audit practices are. 4 reports in 16 years doesn't seem like a lot to me, but again, I guess the endlessness of the river is in the eye of the beholder. Also, the GAO has repeatedly demonstrated a poor understanding of the program. Some of the reforms they propose would harm the program, not help it. In any case, USAC has hired an outside firm to review its compliance with the latest GAO report (from 2010: »www.gao.gov/new.items/d10908.pdf). It did take them 2 years to reach this point, though, so you're right about the pace of the FCC response.

"I think you probably somehow benefit financially from these funds." Guilty as charged. Unfortunately, there isn't anyone who knows firsthand how audit-rich the application process is, but has not benefited financially. If you want to hear about the program from anyone who's actually been through the application process, it would have to be someone who's benefited financially.

I can't believe I mistyped the last sentence. What I meant to say was, "Because no one who has been through the application process thinks that the program needs more auditing."

I'm not ignoring problems in the E-Rate. I just don't think fraud in 0.015% of applications is "oodles" or that 4 GAO reports in 16 years is an "endless river." From my perspective, the amount of fraud does not justify the current level of scrutiny.