Study argues rural broadband stimulus wasn't effective

Stimulus funds aimed at expanding rural broadband service are not cost effective and often subsidize duplicative coverage, according to a study from Navigant Economics.

The 2009 Recovery Act included more than $7 billion in broadband subsidies including $2.5 billion allotted to the USDA's Rural Utilities Service. Navigant economists Jeff Eisenach and Kevin Caves analyzed three projects that received $231 million of those funds and found the funds were often used for areas already served by one or more broadband providers. “The projects we analyzed show the RUS has continued its practice of subsidizing the deployment of overlapping broadband infrastructures, an approach the FCC has concluded would more triple the cost of providing nationwide ubiquitous broadband coverage," said Eisenach, managing director at Navigant. "As we conclude in the study, this program is ‘not a cost-effective means of extending broadband coverage to un-served households.’”