The Efficacy of the Connect America Fund in Addressing US Internet Access Inequities

Residential fixed broadband internet access in the United States (US) has long been distributed inequitably. These inequities remain the subject of significant focus for both researchers and policymakers alike, as taxpayers have invested hundreds of billions of dollars over the past several decades to address these broadband-related challenges. This paper evaluates the efficacy of the Connect America Fund (CAF), a key policy intervention aimed at addressing disparities in US internet access. CAF subsidizes the creation of new regulated broadband monopolies in underserved areas, aiming to provide comparable internet access, in terms of price and speed, to that available in urban regions. Oversight of CAF depends largely on data self-reported by internet service providers (ISPs). Unfortunately, the reliability of this self-reported data has always been open to question. We find that the serviceability rate—defined as the fraction of addresses ISPs actively serve out of the total queried, weighted by the number of CAF addresses in a census block group—is only 55.45%, dropping to as low as 18% in some states. Furthermore, the compliance rate—defined as the weighted fraction of addresses where ISPs actively serve and advertise download speeds above the FCC’s 10 Mbps threshold—is only 33.03%. We also observe that for a subset of census blocks, the CAF-funded addresses receive higher broadband speeds than their monopoly-served neighbors. These results indicate that while a few users have benefited from this multi-billion dollar program, it has largely failed to achieve its intended goal, leaving many targeted rural communities with inadequate or no broadband connectivity.