Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/235384 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9014
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
Millions of citizens and firms lack access to high speed internet, even though governments pledged to spend huge sums of money to subsidize internet networks. In this paper we review some systematic flaws of present subsidy policies and outline a promising alternative. We propose that governments should treat the broadband infrastructure as a public responsibility and set up intelligently designed public-private partnerships that fund and temporarily operate the broadband in exchange for collecting service fees and, if necessary, subsidies. Simple “least-present value of revenue” 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. This procurement method is easy to use, immune to strategic manipulations and renegotiations, and has already proven successful in procuring toll-roads and bridges.
Subjects: 
public-private partnerships
auctions
universal service auctions
high-speed broadband provision
public finance
JEL: 
D44
D47
D86
H20
H54
L96
Document Type: 
Working Paper
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