Big telecommunications companies including Frontier and AT&T are asking the state for millions in the most recent round of broadband expansion grants, according to the list of applications submitted to the Wisconsin Public Service Commission. Many of these companies have already received tens of millions from federal programs to improve service in Wisconsin and across the country. Critics are wary of giving them more public cash. “My fear is that companies like Frontier, Charter and AT&T will simply use this money to substitute for their existing capital expenses,” said Barry Orton, a professor emeritus of telecommunications at the University of Wisconsin-Madison. “As they have multiple times in the past, they could cherry-pick service areas based on revenue expectations, leaving their less lucrative Wisconsin customers unserved and underserved yet again.” In the current grant round in Wisconsin, Frontier, which declared bankruptcy in 2020 and is being sued by the Federal Trade Commission for deceptive business practices, is asking for more than $20 million. The company has already received nearly $185 million from the federal government to upgrade its internet service in Wisconsin. Frontier is widely reviled for providing poor service.

To receive E-Rate support, applicants must follow specific procedures established by the Federal Communications Commission and use an online portal called EPC. Applicants use the EPC system to notify vendors of Requests for Proposals (RFPs), report the results of their local competitive bidding process, and submit funding requests to USAC, the E‐rate program administrator. The purpose of this white paper is to provide data and applicant feedback about the performance of the current system. Data transparency was emphasized when the FCC updated the E‐rate program in 2014. The FCC required that winning bid information be made public, including names of winning vendors, unit pricing, quantities, model numbers, and other details about the goods and services being delivered with support from the E-rate program. The FCC’s stated intent was to increase competition and drive down prices. Analyzing the publicly available bidding information, we can now see the results. The level of competition has increased significantly while the price of goods and services has dropped dramatically. From 2017 to 2021:

• E‐rate applicants collectively received 419,972 bids and awarded 144,625 contracts.
• The number of proposals received per contract increased 26% from 2.57 to 3.23.
• The percentage of contracts awarded based on less than two bids dropped from 41% to 25%.
• The median price per megabit paid by K‐12 schools dropped 71% from $4.80 to $1.39.
• The average price per wireless access point dropped 49% from $1,414 to $716 per unit.
• The portion of requests tied to non‐negotiated contracts dropped to a record low of 3%.