Grading the E-rate
(From Intellectual Capital, August 20, 1998)
by James V. DeLong

Start with some accepted values. The information and telecommunications revolution is a wonderful thing. It will affect deeply the lives of everyone, particularly the younger people who will live with it the longest. It is intensely important that every child in America have the opportunity to master the skills needed to function in this new environment.

Stipulate further that government does, should and will help provide this opportunity. For excellent reasons, this nation has long categorized education as a governmental responsibility, perhaps its most important one after national defense. A well-schooled populace is a sine qua non of republican democracy, which makes education a considerable collective good. All of us profit from the education of each of us. Every dumbed-down individual is a menace to the polity as a whole.

Government also has a role because we are reluctant to see economic advantage leveraged from one generation to another. If only those with surplus money can get educated, then social mobility will decline and class divisions will become cast in stone. The great tragedy and danger of the current implosion of urban public education is its promotion of this calcification of the social order.

Fallacy of the magic bullet

These values underlie the impulse to create the "e-rate," the subsidy for school and library connections to the Internet. But purity of motive does not automatically convert an idea into a good one.

In fact, the e-rate is a bad one. Never mind whether it is good telecommunications policy or tax policy (it is not, but let that be argued elsewhere). It is bad as a matter of education policy.

Yes, as President Clinton recently said in defending the program, "Every child in America deserves the chance to participate in the information revolution." But every child also should have the chance to learn to read, do math, study foreign languages, learn music and master the many other skills necessary for a productive and entertaining life.

We have institutions devoted to producing these opportunities. They are called schools and libraries. Allocating educational resources to the right mix of hardware, books, computers, teachers, maintenance workers, telephones and so on is a task for the people who run these institutions. They already know computers are important and are assiduously wiring the schools on their own, balancing this need against all the others.

These people have a hard job and deserve support. This support is not provided when the federal government suddenly decides more telecommunications is a magic bullet and skews education expenditures in this direction at the inevitable cost of shortchanging other areas.

This distortion is the inevitable result of the e-rate. Official Clinton administration policy is to wire every classroom, a goal that has the brainless quality of a Soviet five-year plan run amok. Why "every" classroom? Perhaps some should be used for reading, quiet studying or art rather than computers.

A boondoggle for the education bureaucracy

The District of Columbia took the administration seriously, applying for a subsidy to wire every one of its 5,500 classrooms. It received a reply noting that by filing the application, D.C. was committing to spend money to put equipment into each room, train teachers, buy software, upgrade the schools' electrical plant and provide necessary maintenance.

This is the D.C. a school system notorious for producing graduates who cannot read or add. Now it is encouraged -- if it takes the administration seriously -- to divert resources into the support of gold-plated computer systems because it can get them on the cheap.

The e-rate program damages the schools in another, more subtle way. It sucks them into the dishonesties and game playing that accompanies any federal subsidy program.

The program's administrators already have expanded the program to include "internal connections" as well as access to the Internet. This means the subsidy extends to hardware, such as wiring and switches, and even software. This gives the schools strong incentives to dream up reasons for classifying even routine expenditures as part of the internal connections necessary for Internet access.

For example, the Senate Commerce Committee has objected that some schools are favoring vendors of Internet services that also will provide the school with ineligible items at no cost. Among the requested items: teacher training, security systems, 31-inch monitors, pay-cable services, carpeting and painting.

The schools also were finding lawyers willing to opine that as long as vendors say in writing that the cost of the "free" items is not inflating the total price, there is no legal problem. The e-rate administrators are sending letters reminding schools of the limits on the subsidies and noting sternly that all statements made in applications are subject to penalties for perjury.

An 'F' for meddling

It is only a matter of time until the schools go the way of the medical care providers and find themselves in trouble with the criminal law if the choices they made in allocating costs did not accord with something in the federal government's convoluted regulations. (Was replastering 10 feet of wall after drilling a hole for a wire a legitimate cost of "internal connection" or a fraud on the government?)

Our schools need less bureaucracy, fewer federal mandates, less random meddling and more freedom. On this scale of values, the e-rate, with its layers of distorted incentives, micromanagement, paperwork and overhanging threat of unpredictable criminal enforcement, deserves an F.