Join the discussion titled “Broadband Subsidy Programs – Here Today, Gone Tomorrow” on Little Nuggets of Tech and Telecom hosted by the Georgetown Center for Public Policy on Wednesday, March 26 at 12pm eastern.
The digital economy stands as a pillar of American strength, injecting an estimated $5 trillion into the nation’s Gross Domestic Product (GDP) through hardware, software, and services. These sectors consistently outpace the broader economy, providing a vital boost during turbulent times. At the heart of this growth is broadband—an indispensable service that has held steady or even declined in price amid record inflation. By enabling remote work, education, and healthcare, broadband delivers a cushion of value to millions of Americans navigating economic uncertainty.
Yet, beneath this success lies an outdated system that fails to equitably distribute the costs of this critical infrastructure. It’s time for a bold rethink.
The Hidden Winners of Broadband Growth
The benefits of broadband are not evenly shared. Strand Consult’s research reveals a stark reality: every connected household funnels at least $1,500 annually to eight tech giants—Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, Disney, and TikTok. Businesses contribute even more, driving at least $20,000 per year in software and advertising revenue to these same firms. These corporate behemoths reap massive financial rewards from America’s broadband networks, which are among the world’s most advanced and diverse—spanning fiber, cable, mobile cellular, fixed wireless, and satellite technologies.
The American broadband industry invests roughly $100 billion annually in broadband infrastructure, a quarter of the global total. This investment is justified by the rising demands of sports streaming, online advertising (now 25% of network traffic), and AI-driven services. But while the networks evolve, the business model to fund them remains stuck in the 1990s, treating all traffic like a simple email rather than reflecting the diverse, high-volume demands of today’s digital landscape.
An Outdated Funding Model
This disconnect is most glaring in the Federal Communications Commission’s Universal Service Fund (USF), an $8 billion annual program that ensures connectivity for 100 million Americans—nearly a third of the nation. Funded by a steep 38% surcharge on telephone services, the USF supports low-income households, rural communities, schools, libraries, and telehealth initiatives, fulfilling a mandate from the Communications Act for affordable access nationwide.
But the program’s funding mechanism is a relic. As telephone subscriptions plummet and broadband usage soars, the burden falls disproportionately on a shrinking pool of phone users, largely seniors on fixed income. Meanwhile, the tech giants driving two-thirds of network capacity—per AppLogic’s 2025 Global Internet Phenomena Report—pay virtually nothing for their outsized use. Consumers bear the cost, while the biggest beneficiaries ride free. This is not just unsustainable; it’s unjust.
A Fragmented Subsidy Mess
The failure to modernize broadband business models has pushed policymakers to lean on government intervention, with mixed results. The Government Accountability Office identified over 100 broadband subsidy programs across 15 federal agencies in 2023—a bureaucratic tangle that defies effective oversight. The $42.5 billion Broadband Equity, Access, and Deployment (BEAD) program, enacted under the 2021 Infrastructure Investment and Jobs Act, promised to bridge the gap. Instead, it has become a cautionary tale.
Tasked with managing BEAD, the National Telecommunications and Information Administration (NTIA) imposed a slew of conditions—favoring specific technologies, preferred laborers, and political priorities—that delayed rollout. Despite Congress appropriating funds in 2021, not a single connection was made before the Biden administration’s end, squandering a chance for progress. The NTIA’s late pivot to an “all of the above” approach acknowledged the flaws of its strings-attached strategy, but the damage was done.
A Path Forward: Innovation Over Handouts
The incoming Trump administration has a chance to reboot this effort—and it should start by rethinking the fundamentals. Rather than piling more subsidies onto an already convoluted system, we need a business model that reflects reality: the largest users of broadband networks should share in their costs. Imagine a framework where tech giants contribute based on their network usage, lowering the burden on consumers and sustaining programs like the USF without punishing phone users.
The NTIA could have set a precedent by swiftly distributing BEAD funds to states—many of which boast capable broadband offices ready to act—while tying further allocations to performance milestones. Competition among states could have spurred innovation and results. Instead, we got red tape and missed opportunities.
A Call to Action
America’s broadband networks are a marvel of engineering and a driver of economic resilience. But their funding must evolve to match their role in the digital age. By innovating business models to include contributions from the tech titans who profit most, we can ensure equitable access without overburdening consumers or taxpayers. The digital divide won’t close with more government patchwork—it demands a system as dynamic as the networks it supports. Let’s seize this moment to build a smarter future.