Universal High-Speed Broadband Provision : An Alternative Policy Approach

Millions of citizens and firms lack access to high speed internet, even though governmentspledged to spend huge sums of money to subsidize internet networks. In this paper we reviewsome systematic flaws of present subsidy policies and outline a promising alternative. We proposethat governments should treat the broadband infrastructure as a public responsibility and set upintelligently designed public-private partnerships that fund and temporarily operate the broadbandin exchange for collecting service fees and, if necessary, subsidies. Simple “least-present value ofrevenue” auctions should be used to award all concessions, not only those that require subsidies,and concessions should flexibly revert to public ownership depending on realized revenues. Thisprocurement method is easy to use, immune to strategic manipulations and renegotiations, andhas already proven successful in procuring toll-roads and bridges