Taxpayers Are Paying $340,000 a Year for Internet on an Alaska Island With About 24 People — Almost None of Them Use It.
A joint ProPublica/Anchorage Daily News investigation found that a federal telecom subsidy pays Adak Eagle Enterprises more than $340,000 a year to keep hundreds of buildings on Alaska’s Adak Island wired for internet service — on a former Navy base that emptied out almost three decades ago.
The state estimates Adak’s population at 77; reporters who went door to door found closer to 24 year-round residents. Divide the subsidy by that real number and it comes to roughly $14,000 per person, per year — and not one resident interviewed said they actually subscribe to the service the subsidy pays for. Nearly everyone uses Starlink instead.
This is not a story about a contractor caught stealing. It’s a story about a federal program, decades old, that keeps writing the same check long after the reason for writing it disappeared — and about what it takes to finally notice.
- More than $340,000 — the annual FCC subsidy Adak Eagle Enterprises collects to wire empty buildings for internet — ProPublica/Anchorage Daily News
- ~$14,000 — the subsidy divided by the reporters' on-the-ground count of about 24 year-round residents
- $3,600,000 — received by the company from this one federal broadband subsidy since 2016
- 0 — of the residents ProPublica/ADN interviewed who said they subscribe to the subsidized service
Adak was a working U.S. Navy base for most of the 20th century, home to thousands of sailors and their families at its peak during the Cold War. The Navy closed it in 1997, and the population collapsed along with it. In the early 2000s, a local telecom that became Adak Eagle Enterprises used Federal Communications Commission subsidies and federal loans to run fiber-optic cable to hundreds of the base’s buildings — a bet that people, and government funding, would keep coming.
The money comes from the FCC’s Universal Service Fund High-Cost Program, the largest of four USF sub-programs, funneling roughly $4,500,000,000 of the fund’s roughly $8,000,000,000 total annual budget to carriers serving “high-cost” rural areas. It’s administered day to day not by the FCC directly but by the Universal Service Administrative Company (USAC), a private nonprofit the FCC oversees. The money itself comes from a line-item fee tacked onto nearly every American’s phone bill — not from general tax revenue, but a cost every ratepayer covers regardless of whether they’ve ever heard of Adak.
New: On Alaska's Adak Island, it costs more than $340,000 per year to provide hundreds of buildings — all but a few of them empty — with internet access no one uses. The money being wasted is yours.
By 2011, Adak Eagle’s peak year, the company was collecting $2,680,000 annually from the High-Cost Program alone. The subsidy has shrunk since — it fluctuates year to year in FCC records, reported at “more than $340,000” in ProPublica’s most recent figures and “more than $350,000” in earlier reporting on the same program — but it has never gone to zero, even as the island it was built to serve kept emptying out.
Reporters visited Adak and knocked on doors. Resident Henry Collins, 61, told them he accidentally cut the buried fiber cable years ago and simply switched to Starlink rather than have it repaired. Elizabeth Pryor, who runs a small farm on the island, said her home is still listed among the subsidized locations but that she uses Starlink too. Steven Ivanoff, a 26-year-old competitive gamer, clocked his Starlink connection at 447 megabits per second; the FCC’s National Broadband Map shows Adak Eagle’s subsidized fiber tops out at 1 to 10 megabits per second — barely fast enough to load a modern webpage, let alone meet the FCC’s own 100-megabit broadband standard.
Starlink arrived on the island in 2023, unsubsidized, at $90 to $140 a month. Adak Eagle’s wired service, by contrast, once ran customers hundreds of dollars monthly on top of whatever the company was already collecting from the subsidy. Reporters could not find a single Adak resident still paying for it. Former Adak Eagle vice president Andilea Weaver told ProPublica the company began replacing the island’s wiring back in 2006; company president Larry Mayes declined multiple interview requests and hung up when reporters first reached him by phone.
This is not the first time federal regulators looked at Adak Eagle’s books. A 2013 federal order found Mayes’s $237,455 salary that year — drawn substantially from subsidy revenue — to be “unreasonable” and “disproportionate,” and identified subsidy dollars spent on vehicles and a fishing boat the order found unnecessary to running the network. Nearly a decade later, in 2022, the FCC trimmed the number of buildings Adak Eagle is obligated to serve from 346 down to 306 — but left the subsidy amount essentially unchanged. Fewer buildings, same check.
“Companies get subsidies for hooking up buildings to internet regardless of whether anyone actually uses it or wants it, and they keep getting the money year after year.”
Former FCC official, quoted by Alaska Public Media
Adak is not an isolated case within the reporters’ own findings. A separate story in the same series identified Roger Shoffstall, a felon convicted of tax evasion, whose company continues to draw roughly $1,000,000 a year from the same High-Cost Program to sell what ProPublica describes as obsolete internet service elsewhere in rural Alaska — a different carrier, a different case, but the same fund and the same structural problem: once a carrier is enrolled, USAC’s checks tend to keep clearing. Separately, in 2023, Alaska’s largest telecom, GCI, paid $40,242,546 to settle federal False Claims Act allegations tied to a different USF sub-program, Rural Health Care — not the High-Cost Program that funds Adak Eagle, but further evidence that oversight gaps in this fund are not confined to one company or one corner of the state.
None of this is new to federal auditors. The Government Accountability Office flagged weak oversight and missing performance measures in the High-Cost Program as far back as 2008, and again in 2012 after the FCC’s first major overhaul of the fund. Watchdog groups like Citizens Against Government Waste have pushed for structural reform of the Universal Service Fund for years, arguing the surcharge behind it functions as a hidden tax with too little accountability for how the money is spent once a carrier is enrolled.
FCC Chairman Brendan Carr (R) — who did not create this program and inherited a subsidy structure that predates his chairmanship by nearly three decades — released a draft proposal on July 16, 2026, titled “Maximizing Efficiencies in Universal Service Administration.” The rulemaking, teed up for the FCC’s August 2026 open meeting, would examine what USAC can audit, how it calculates clawbacks from carriers, whether disputed funds must be repaid while appeals are pending, and whether USAC should keep administering the fund at all. It follows an April 2026 public notice launching what the FCC calls a “top-to-bottom review” of Universal Service programs. USAC did not respond to ProPublica and the Anchorage Daily News’ inquiries for their reporting.
Nothing in the federal record reviewed for this story alleges that Adak Eagle Enterprises is currently breaking the law. The subsidy is legal, the buildings are real, and the company has collected exactly what FCC rules entitle it to. The story here is that Congress and the FCC built a program in the 1990s to keep phone and internet service affordable in places the market wouldn’t otherwise reach — and never built in a mechanism to notice when the place being served has, for all practical purposes, emptied out.
A subsidy built to connect a Navy base that closed in 1997 is still paying more than $340,000a year to wire buildings that around two dozen actual residents don’t use — because they switched to Starlink years ago. A 2013 federal order already caught the company’s president drawing an “unreasonable” salary from the fund; the FCC responded in 2022 by trimming the building count, not the check. Chairman Brendan Carr’s (R) July 2026 proposal is the first serious attempt in over a decade to ask USAC and the Universal Service Fund the question Adak Island already answered: what happens when nobody’s home?
