Public Investment in Broadband Infrastructure: Lessons from the US and Abroad

This paper reviews experiences with subsidizing telecommunications services, and broadband in particular, in the United States and around the world. Based on those lessons it proposes a path forward intended to yield the biggest broadband bang for the subsidy buck.

Specifically, an effective broadband subsidy program would:
Set a single, clear objective: bring broadband service to populated areas that do not have it.
Define “broadband” by taking into account consumer demand characteristics. This definition should be use-centric, not technology-centric. Any technology should be eligible to participate in the auction.
Make the program a one-time subsidy.
Rank-order the bids in terms of cost-effectiveness in terms of new locations, not area, connected per subsidy dollar. Fund the most cost-effective project first, the next most costeffective second, and so on until the budget is exhausted.
Rigorously evaluate the results and have organizations other than the one implementing the program conduct the evaluations.