The Benefits from Bundling Demand in K-12 Broadband Procurement
Abstract
We study a new market design for K-12 school broadband procurement that switched from school-specific bidding to a system that bundled schools into groups. Using an event study approach, we estimate that the 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 in broadband procurement - the risk that providers win too few contracts to cover their fixed infrastructure costs. Using a bounds approach, we show robustness of our estimates and document that participants saved between $1.61 million and $3.48 million, while their existing federal E-rate subsidy was $2.47 million, and experienced substantial welfare gains.
Keywords
Cite
@article{arxiv.2402.07277,
title = {The Benefits from Bundling Demand in K-12 Broadband Procurement},
author = {Gaurab Aryal and Charles Murry and Pallavi Pal and Arnab Palit},
journal= {arXiv preprint arXiv:2402.07277},
year = {2025}
}