What Rural Broadband Subsidies Paid For, 2018 to 2025
Governments spend billions of dollars to bring broadband to places that lack it. This report asks how much of the new service in the places six programs subsidized the subsidies caused, and how much would have arrived anyway. We compare the areas each program funded with similar areas it did not fund, track both over time, and call the difference the program’s effect. The main measure is access, whether a location can buy at least 100/20 Mbps from a wired or licensed wireless provider. A location is what the FCC’s data call a broadband serviceable location, a structure where service is or could be installed; a multiunit building counts once, and businesses count as well as homes. We also measure fiber where a program set out to build it, adoption, and measured speeds, and we restate each access effect as years of earlier service and a public cost per location-year. The answer, through 2025, is that the programs mostly paid for service that was coming anyway and bought time. Figure ES.1 shows what buying time means, and Table ES.1 gives each program’s headline result.
Table ES.1 summarizes the six programs. For each, it reports how much the share of locations that could buy at least 100/20 Mbps service from a wired or licensed wireless provider rose, over the program’s study period, in the areas it subsidized and in comparable areas it did not; the program effect, which is the share of locations, in percentage points, that had service by December 2025 because of the subsidy; what the public has paid so far for each subsidized location; and the effect restated as time.
Subsidized areas gained service faster than comparison areas, but the comparison areas kept gaining, so most of what a subsidy bought is earlier service rather than service that would never have arrived. Figure ES.1 shows this for RDOF. Reading across, subsidized areas reached each level of service sooner than they would have without the subsidy: 35 percent of locations served 0.6 years sooner, 53 percent served 1.3 years sooner. The arrows measure how much faster deployment occurred for the 49 of every 100 subsidized locations that gained service between June 2022 and December 2025. Not all of them gained it because of the subsidy. The program effect in the table, 17 points, is the share that did. For the other 51 the subsidy changed nothing in time, because 21 already had service in June 2022 and 30 still had none in December 2025 with or without the subsidy. Averaging over all 100 locations gives 0.32 years, the figure in the table. Dividing the public money by those location-years gives the cost of a year of earlier service at one location, the last column of the table and the one measure on which a ten-year support stream and a one-time grant can be compared.
Scott Wallsten is President and Senior Fellow at the Technology Policy Institute and also a senior fellow at the Georgetown Center for Business and Public Policy. He is an economist with expertise in industrial organization and public policy, and his research focuses on competition, regulation, telecommunications, the economics of digitization, and technology policy. He was the economics director for the FCC's National Broadband Plan and has been a lecturer in Stanford University’s public policy program, director of communications policy studies and senior fellow at the Progress & Freedom Foundation, a senior fellow at the AEI – Brookings Joint Center for Regulatory Studies and a resident scholar at the American Enterprise Institute, an economist at The World Bank, a scholar at the Stanford Institute for Economic Policy Research, and a staff economist at the U.S. President’s Council of Economic Advisers. He holds a PhD in economics from Stanford University.
