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Recent data from the Federal Communications Commission allows for examination of the location decisions of “small” broadband providers, i.e. those with less than 250 subscribers. While anecdotal evidence suggests that small providers may be serving disadvantaged or underserved areas, the data indicates that more than two-thirds service urban areas and seemingly choose areas with high demand potential. This paper models the location decision of these small providers and analyzes whether they are influenced by federal assistance programs such as USDA broadband grants and loans. The results suggest that while small providers do tend to locate in urban areas with higher levels of education and income, they also favor rural areas with high levels of Hispanics and African-Americans. No statistical impact is found for the federal-level policies included in the analysis, implying that the focus of these programs may be on the wrong areas.


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