School net scams: no tech firm left behind.

• Author: Snell, Lisa
• Position: Citings - Brief Article

PUERTO RICO HAS spent $101 million in federal grants to wire 1,500 public schools for Internet access. Yet the island-wide school district warehoused most of the equipment for more than three years, and only nine schools were actually connected to the Internet.

Like most large-scale government giveaways, the federal E-rate program, which collects $2.5 billion a year in telephone taxes to hook up schools and libraries to the Internet, has produced a huge amount of fraud and abuse. The Chicago public schools have more than $5 million in E-rate computer equipment sitting in a warehouse. In San Francisco school officials discovered that a $68 million project should have cost less than $18 million. In June the Federal Communications Commission reported that 42 criminal investigations were under way.

Large corporations have gained millions from the E-rate feeding trough. In May NEC Business Network Solutions pleaded guilty to rigging bids at six school...