How to Bridge the Rural Broadband Gap Once and For All

Despite years of effort and tens of billions of dollars in subsidies, the United States still faces a stubborn rural-urban broadband gap. A large, one-time injection of federal capital can succeed in bridging the rural broadband divide if it is reasonably targeted and allocated through a reverse-auction program that serves as a transition away from the Federal Communications Commission’s Universal Service Fund. The current FCC program is funded through regressive fees levied on a shrinking base of telecommunications services. Roughly half of its rural support goes to small, inefficient firms for piecemeal investments. This system is unsustainable. Subsidies should be awarded through auctions that encourage companies of all sizes to participate—particularly those with large economies of scale, so they can efficiently extend broadband service into previously uneconomical areas. These procurement-style auctions should award support for unserved locations using new FCC maps that show precisely where and what type of infrastructure is already available. Policymakers must recognize the cost trade-offs of brand-new, ultra-fast networks: The goal should not be “future proofing,” but the broadest-possible coverage of networks that support reasonable expectations of future application demand. Policymakers also should combine subsidies with other efforts to remove barriers to deployment, including streamlining the pole attachments process and ensuring pole replacement fees are shared fairly between all beneficiaries.