New Jersey schools pooled demand for broadband procurement

New Jersey's public schools, like most K-12 systems, procured broadband internet through individual, school-specific competitive bidding, subsidized by the federal E-Rate program (which pays a larger share for high-poverty and rural schools).

In 2015, New Jersey restructured its procurement process without touching the subsidy at all: the state bundled willing schools into four regional consortiums, letting providers bid on serving an entire region's guaranteed volume of demand instead of gambling infrastructure investment against a single school's standalone, uncertain contract.

Bundled small school contracts into four regional bundles to cut provider exposure risk, lowering prices without increasing subsidy.

By letting providers bid on an entire region's guaranteed demand rather than a single uncertain school contract, the bundling program made the fixed cost of building out infrastructure rational to inc

This mechanism depends on the underlying competitive failure genuinely being exposure risk rather than a lack of qualified providers, insufficient subsidy, or genuine cost differences between regions

When many small, dispersed purchasing units (branch offices, school districts, regional facilities) individually can't attract serious supplier competition, check whether the underlying constraint is

78 base) while average internet speeds nearly tripled, from 268 Mbps to 978 Mbps. The researchers found the number of bidders competing in the auctions did not meaningfully increase — the price drop came from existing bidders competing more aggressively once exposure risk was reduced, not from a larger pool of competitors.