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Procurement auctions for broadband access: Starlink and the rural digital opportunity fund

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  • Núñez, Ignacio J.

Abstract

In 2020, the Federal Communications Commission (FCC) awarded $886 million in subsidies to Starlink to provide high-speed broadband access to thousands of unserved areas in the United States. Starlink committed to providing access using new technology based on a constellation of low Earth orbit (LEO) satellites. Two years later, Starlink was disqualified and the awarded subsidies were rescinded. This article examines Starlink’s participation in the RDOF program, which distributed subsidies through a multiple-round simultaneous auction. Optimal bidding conditions are utilized to estimate Starlink’s private costs and counterfactual rent. I find that Starlink’s rent would have exceeded 58% of its awarded subsidies, as Starlink was the only LEO provider in the auction, with a significant cost advantage compared to existing broadband technologies in remote and high-cost areas. This finding suggests that similar subsidy programs could benefit from tightening reservation prices in areas that Starlink won and fostering competition among LEO providers.

Suggested Citation

  • Núñez, Ignacio J., 2025. "Procurement auctions for broadband access: Starlink and the rural digital opportunity fund," Telecommunications Policy, Elsevier, vol. 49(10).
    • Handle: RePEc:eee:telpol:v:49:y:2025:i:10:s0308596125001491
    DOI: 10.1016/j.telpol.2025.103052
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    References listed on IDEAS

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