Communication Technology and New Media Commons^™

Reverse Auctions And Universal Telecommunications Service: Lessons From Global Experience, Scott J. Wallsten

Scott J. Wallsten

The United States now spends around $7 billion on universal service programs—subsidies intended to ensure that the entire country has access to telecommunications services. Most of this money supports telecommunications service in “high cost” (primarily rural) areas, and the High Cost fund is growing quickly. In response to this growth, policymakers are considering using reverse auctions, or bids for the minimum subsidy, as a way to reduce expenditures. While the U.S. has not yet distributed funds for universal service programs using reverse auctions, the method has been used widely. First, reverse auctions are akin to standard government procurement procedures, which …