The Impact of High Cost Broadband Infrastructure Subsidies on Locally Advertised Internet Speeds

Undergraduate Honors Thesis

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Citeable URL: https://scholar.colorado.edu/concern/undergraduate_honors_theses/n583xw37x

Abstract

This paper examines how a targeted subsidy program to build broadband internet infrastructure in rural areas of the US affects locally advertised download and upload internet speeds. I run a series of difference-in-difference regressions on panel internet speed data from 2014-2021 where the dependent variables are annual maximum advertised download and upload speeds in treated and control census block groups. The key independent variable is an interaction term between subsidy participation and post-treatment status to estimate the average effect of the program. The key findings are that the FCC’s CAF II Model based support program improved locally advertised maximum internet download and upload speeds in rural areas by 80-87 Mpbs and 30-35 Mbps respectively. However, most internet service providers elected to deliver broadband internet access speeds in excess of the program’s minimum standard and independently of receipt of a subsidy.

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