Estimating cost to serve using available data

To estimate how much it will cost to close the digital divide in broadband access we need two pieces of information: the cost to serve each location, and how many locations there are. Here I’m going to come up with a proof-of-concept estimate of the cost to serve any location; later I’ll use those two numbers to estimate how far broadband funding might go. To estimate the cost to serve a location I use a simple model where price per location is a function of the density of the census block, the distance from that census block to the nearest census block served by either cable or fiber, an indicator for urban or rural, and state fixed effects to capture differences in cost in each of the states.