The FCC is fixing a rural broadband embarrassment, but work remains

We have had what appears to be the world’s most expensive and ineffective universal service program. Until now. The Federal Communications Commission is taking significant steps to dismantle the traditional system and replace it with something world class. In 2018, the FCC launched a new approach that uses a reverse auction to force companies to compete for subsidies. A reverse auction begins with a maximum subsidy the FCC is willing to pay for someone to expand broadband service in a rural area. Companies compete by bidding the amount down. The company with the lowest bid receives the new lower subsidy in exchange for committing to specific broadband rollouts.  How well did this work? In 2018 the auction resulted in subsidies 70 percent below what the FCC had projected, saving at least $3.5 billion over 10 years.