In the middle of the pandemic, the Federal Communications Commission used a reverse auction process to save taxpayers about $7 billion on projected expenses of $16 billion for broadband service to unserved areas — nearly a 50 percent savings! But because of concerns over some outcomes of the reverse auction, the current infrastructure bill may abandon competitive bidding and instead allocate the $45 billion in broadband subsidies in ways that virtually guarantee higher costs and fewer people connected. Rather than ditching a tool proven to deliver cost-effective results, we should take a page from the FCC’s successful spectrum license auctions and continue to use this powerful tool while learning from the mistakes to ensure that new auctions do not suffer from the same deficiencies. First, we need comprehensive, complete, and accurate knowledge of which areas do not have service. Achieving this objective requires careful analysis and mapping, which hopefully the FCC process will provide soon, and the bill relies upon for its planned distribution of subsidy money. Second, it is crucial to ensure that the bidders can provide the service they promise. One way to solve this problem is for the companies to bear the risk of their proposal since they have the most knowledge and control of performance. The bottom line is not to throw the auction out with the bathwater.

[Gregory Rosston is the Gordon Cain Senior Fellow at the Stanford Institute for Economic Policy Research and Director of the Public Policy program at Stanford University. Scott Wallsten is president and senior fellow of the Technology Policy Institute, and a senior fellow at the Georgetown Center for Business and Public Policy.]

MTA Fiber Holdings, a wholly-owned subsidiary of Alaskan telecommunications cooperative MTA that is responsible for the creation of AlCan ONE, is the first-ever terrestrial fiber network connecting Alaska with the lower 48 US states. Alaskans previously relied solely on subsea cables for that connectivity, explained MTA CEO Michael Burke. MTA undertook the AlCan ONE project because, as Burke explained, “We needed to explore owner economics.” In making the decision to do the fiber build, MTA “looked at our projected capacity needs going into the future and how much bandwidth we would need [based on] internet growth and what it would cost if we bought it on the open market,” he said. Based on that analysis, MTA determined that it would be more cost-effective to undertake the construction project, even without considering the wholesale revenues that the company has since obtained through contracts with other Alaskan carriers. Other carriers see the AlCan ONE connection as a geographically diverse route to the lower 48, augmenting the subsea connections. The availability of the network also helped one Alaskan carrier build a business case for bringing broadband to a previously unserved community.

In July, Sens Roger Wicker (R-MS) and John Thune (R-SD) sent a letter to Acting Chairwoman Jessica Rosenworcel to request a status update on the Federal Communications Commission's long-form application review process for the Rural Digital Opportunity Fund (RDOF) Phase I auction. On July 29, Chairwoman Rosenworcel replied.

After the winning Rural Digital Opportunity Fund (RDOF) bidders were announced, they were given the opportunity to divide their bids among approved providers, allowing bidding consortia to distribute winning bids among its members. As a result, 417 providers ultimately filed “long-form” applications with the Federal Communications Commission. On July 26, the FCC released the first “ready to authorize” public notice, listing 48 companies as ready to take the next step to receive $311,669,132 to deploy gigabit service using fiber and cable in 36 states. The remaining long-form applications continue to be under review. While the FCC has engaged in this review process, it also has taken steps to address problems with the program. In response to reports that demonstrated that the auction, as originally conceived, would fund broadband in areas including parking lots, international airports, traffic medians, and dense urban centers, FCC sent letters to 197 winning bidders providing an opportunity to withdraw funding requests from places that already have service or where significant questions of waste have been raised. In addition, the FCC will not support bidders that failed to diligently pursue their applications. To this end, the FCC denied waivers requested by bidders that failed to make reasonable efforts to pursue ETC designations. I believe the Commission has been both careful and thorough in its review of long-form RDOF applications and will continue to have FCC staff update [Senate Commerce Committee] staff as our long-form process continues.

Elon Musk’s SpaceX is acquiring the small-satellite data provider Swarm Technologies, scooping up the startup’s roughly 30 employees and its network of 120 tiny satellites. The deal is extremely rare for SpaceX, which normally manufactures its rocket and satellite hardware in-house or hires subcontractors. SpaceX continues to foray into the world of consumer electronics and claws its way out of a chasm of unprofitability with Starlink, with the hopes of eventually turning the network into a cash cow to fund Musk’s massive Starship launch system. Founded in 2016, Swarm offers ultra low-bandwidth data services using its tiny sandwich-sized SpaceBEE satellites that talk to smaller consumer antennas on the ground called “Tiles.” With GPS built in, devices with a tile installed can be tracked, relay sensor data, or do whatever the customer programs it to do using tiny pings of bandwidth to Swarm’s global satellite network starting at $5 a month. SpaceX’s much different Starlink program aims to beam broadband internet into rural areas that lack fiber or physical internet connections. The company already has more than 1,700 of its initial tranche of 4,409 satellites in low-Earth orbit with nearly 100,000 beta users, most of whom paid $499 for a terminal kit and $99 a month for internet.