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Infrastructure Bill Needs Reverse Auctions and Evaluations for Cost-Effective Results

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New talk of a $2 trillion national infrastructure bill may be aspirational, but if the Trump-Pelosi-Schumer troika can take the time to push “pause” on the verbal missiles aimed at each other, then maybe we should pay attention.

Last year, President Trump included rural broadband access in his infrastructure plan, and it remains part of the discussion. We at the Technology Policy Institute are on high alert. If broadband is included, we want it to be done the right way.

As we said last June, any rural broadband infrastructure programs should include reverse auctions and evaluations to increase cost-effectiveness.

In “Public Investment in Infrastructure: Lessons from the US and Abroad,” Scott Wallsten, TPI president and Senior Fellow, and Lucía Gamboa, reviewed U.S. and European subsidy initiatives to inform policymakers of what types of programs improve broadband availability and adoption.

In addition, the study offered the following subsidy guidelines:

  • Set a single, clear and measurable objective.
  • Define “broadband” based on research of consumer use and demand characteristics.
  • Allow any technology that meets the definition of “broadband” 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.
  • Rigorously evaluate the results, and ensure that the evaluation is conducted by a separate organization than the one implementing the program.

“Following these guidelines will help create a cost-effective program that might actually increase availability and adoption in rural areas, rather than a continuous stream of subsidies that have little benefit to the households who need them.” Wallsten and Gamboa concluded.