Tech Think Tank Calls for $40B Reverse Auction to Boost Rural Broadband

By John P. Mello Jr.Mar 23, 2021 4:00 AM PT


A Big Bang of cash is needed to bring rural Americans into the Information Age, according to a report released Monday by a Washington, D.C. think tank.


Nearly one-in-five rural Americans don't have broadband Internet access, but that could change with the use of carefully targeted subsidies through a process known as a reverse auction, noted the report by the Information Technology & Innovation Foundation.


"If we do a one-time, large infusion of funds focused on covering the capital expenditures to build new networks where they don't exist and make significant upgrades where they do, we can have a Big Bang in rural broadband that will go a long way toward solving this problem," ITIF Director of Broadband and Spectrum Policy Doug Brake, a coauthor of the report, told TechNewsWorld.


According to the report, an investment of approximately US$40 billion could achieve 98 percent coverage with high-speed, easily-upgradable networks.


The money would be distributed through a reverse auction, where companies would "bid" for funds with proposals for rural broadband improvements.


Low Service Expectations


Brake explained that under the current model, large service providers pay into a Universal Service Fund that channels money into subsides for lots of small, inefficient firms that end up making meager, ineffectual investments in rural infrastructure.


A big, one-time capital expenditure administered through a reverse-auction program would attract larger, more efficient firms to the problem, he maintained.


Christopher Ali, an associate professor in the department of media studies at the University of Virginia agreed that the current system of divvying up the money in the Universal Service Fund ..

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