Introduction
The digital divide in Latin America remains one of the region’s most persistent structural challenges. While urban areas with high incomes typically enjoy stable, fast, and affordable connectivity, rural, indigenous, or peri-urban communities often struggle with insufficient or low-quality internet access. Millions of people in these areas remain disconnected, prompting a reevaluation of rural connectivity policies in Latin America.
U.S. Rural Connectivity Programs: An Overview
The United States has implemented several rural connectivity programs, offering valuable lessons for Latin America. Two notable initiatives are the Connect America Fund (CAF) and the Rural Digital Opportunity Fund (RDOF).
Connect America Fund (CAF)
Launched in 2011 by the Federal Communications Commission (FCC), CAF aimed to address market failures in rural areas, which were deemed unprofitable for private operators. By providing direct subsidies to companies, CAF expanded basic voice and data coverage. However, its primary weakness was setting minimum speeds of only 10 Mbps down and 1 Mbps up, which proved inadequate for essential activities like virtual education, telemedicine, or remote work. Despite investing over $10 billion, studies showed that more than 90% of covered households still had limited connections.
Rural Digital Opportunity Fund (RDOF)
Created in 2019, RDOF, also managed by the FCC, introduced competitive mechanisms through reverse auctions. Large and small operators bid for funds in exchange for concrete commitments on coverage, quality, and timelines. RDOF prioritized networks capable of delivering up to 100 Mbps/20 Mbps and required at least 40% of promised households to be connected within the first three years. However, the program faced significant obstacles: over $3.3 billion were awarded to companies that failed to meet technical requirements, while many communities were excluded due to mapping errors.
Lessons Learned and the Broadband Equity, Access, and Deployment Program (BEAD)
The lessons from CAF and RDOF informed the creation of the Broadband Equity, Access, and Deployment Program (BEAD) in 2021, with a historic budget of $42.45 billion.
BEAD’s design incorporates several lessons from its predecessors: more accurate identification of areas without service, coordination with state and local governments, a focus on scalable technologies like fiber optics, and a holistic approach that includes digital literacy, equipment, sustainability, and affordable pricing.
BEAD mandates state governments to develop detailed plans in consultation with community and tribal actors, fostering a more inclusive and decentralized institutional architecture.
Implications for Latin America
For Latin America, where rural connectivity largely depends on limited public investments and fragmented national plans, these models offer concrete guidance.
- Direct subsidies to operators for unprofitable areas: This remains a valid tool if accompanied by clear accountability mechanisms, accurate maps, and updated technical criteria. In countries like Mexico, Brazil, Colombia, or Argentina, where 4G coverage still doesn’t reach the entire population and many rural schools lack adequate internet, adapting a scheme inspired by CAF or RDOF is feasible if integrated with local regulatory agendas.
- Competitive approach of RDOF, avoiding its pitfalls: Reverse auctions are an efficient resource allocation tool, but they must be based on reliable territorial diagnostics. In many Latin American countries, official coverage maps are incomplete or outdated, distorting fund allocation. Investing in data and transparency, with support from multilateral organizations or public-private partnerships, is a crucial preliminary step to ensure any subsidy program’s success.
- A more ambitious public policy route: Connectivity should be viewed as an essential public service, like electricity or potable water. This entails adopting equity criteria, ensuring economic sustainability, promoting the inclusion of historically marginalized communities (like indigenous peoples or dispersed rural areas), and aligning digital policies with social goals in education, health, and economic development.
Implementing a BEAD-like program in Latin America would require robust institutional frameworks and substantial financial resources, but it’s not impossible. Universal access funds in most countries, often underutilized or poorly managed historically, could be restructured with a more modern logic, supported by development banks and multilateral organizations like the Inter-American Development Bank (BID), the Andean Development Corporation (CAF), or the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
Moreover, the U.S. experience demonstrates that combining federal investment, decentralized execution, and rigorous technical oversight is possible. It’s also essential to integrate existing rural and remote operators into these programs, as they have the advantage of local knowledge, logistical understanding, and community familiarity.
Rural connectivity cannot remain a market externality. It requires intelligent public policy, sustained investment, and strategic planning, as exemplified by CAF, RDOF, and BEAD. Latin America now has a golden opportunity to design its own path toward rural digital inclusion, learning from past experiences and adapting them to its realities. The region’s digital transformation won’t be complete until every community, regardless of remoteness, can access a secure, fast, and affordable connection.
