 Dollars and megabits: A comparative analysis of Telecom and Healthcare Connect FundInformation Economics and Policy, 2024, vol. 67, issue C Abstract: Two federal programs in the United States subsidize internet access for rural healthcare providers, namely, Healthcare Connect Fund (HCF) and the Telecom Program. HCF uses a subsidy mechanism that strongly incentivizes healthcare providers to shop for faster or cheaper internet. Telecom does not incentivize shopping. Theoretically, this predicts that HCF must achieve faster or cheaper internet than Telecom. I empirically test this question and find that Telecom subsidy recipients pay 132-179% more than HCF subsidy recipients on similar internet plans. Evidence point to Telecom's poor incentive design as the root cause. Eliminating this price gap would save American taxpayers $143 million annually. The findings highlight the power of program design, showcase the unintended consequences of misaligned incentives, and encourage policymakers to thoroughly examine program features, the impact on consumer behavior, and the effect on competition and market outcomes. Keywords: Internet; Rural broadband; Telecom; Healthcare Connect Fund; Unintended consequences (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:67:y:2024:i:c:s0167624524000040 DOI: 10.1016/j.infoecopol.2024.101082 Access Statistics for this article Information Economics and Policy is currently edited by D. Waterman More articles in Information Economics and Policy from Elsevier |
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