According to The Associated Press: "A decade-old telephone tax intended to help bring affordable service to rural areas has instead turned into something quite different: a bottomless and politically protected well of cash for cell phone companies that do big business in rural America."
The operation that handles this, the Universal Service Fund, has collected $44 billion over the last 10 years, and almost every cell user in the US is hit with the tax.
The idea itself makes sense. Serving phone and broadband customers in rural areas is more expensive than it is to handle subscribers in densely populated areas.
AT&T (T) received $239 million.
The program is a classic case of how large companies pervert the intentions of programs meant to serve the under-served.
No wonder farmers don’t trust city folk
Douglas A. McIntyre
But "Alltel, which recently announced the sale of the company, reported a $230 million profit in the first three months of 2007, a total boosted by the $65 million to $70 million in universal service funds the company says it receives each quarter."
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