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We study a new market design for K-12 broadband procurement that switched
from school-specific bidding to a system that bundled schools into groups. Using
an event study approach, we estimate that this program reduced internet prices
by $9.17 (55%) per Mbps per month while increasing bandwidth by 380.06 Mbps
(136%). These benefits resulted primarily from mitigating exposure risk—the possibility
that providers win too few contracts to cover their fixed infrastructure costs.
We document participants’ potential savings of $1.61–$3.48 million relative to their
$2.47 million E-rate subsidy.
