Alaska Adak Eagle FCC Subsidy Program Scrutinized

Adak Eagle FCC Subsidy Program Faces New Questions

The Alaska Adak Eagle FCC Subsidy Program tells a troubling story. It's a perfect case study in how federal dollars can flow to infrastructure that serves almost no one, with a local telecom on Adak collecting roughly $340,000 per year to keep hundreds of empty buildings wired for internet access. But those buildings include abandoned homes with broken windows, a former Navy base emptied in 1997, and structures where the only objects left are bird nests and rusting appliances. This money comes from a fee added to nearly every American phone bill. It's part of the Universal Service Fund, intended to bring fast, affordable internet to remote towns, and the scale of the mismatch between the program's purpose and its outcomes is stark. The population? The state estimated it at 77, but residents said it's closer to two dozen. So the federal subsidy amounts to about $14,000 per year per person.

Can the FCC’s oversight really tell genuine need from sustained waste? In Adak, residents report getting online through Starlink, the satellite service that arrived in 2023 without any FCC subsidy, with speeds up to 40 times faster than Adak Eagle provides at costs between $90 and $140 per month. It's a clear failure. This fits a broader pattern of subsidies that keep paying telecom companies even if the end users don't exist or never use the service. The subsidized fiber offers download speeds of just 1 to 10 megabits per second, far short of the FCC's own 100-megabit broadband standard, and at the low end that's barely enough to load a modern webpage.

How the Money Flowed

Adak Eagle built its business on public money. It's a story that starts in the early 2000s, when the company used FCC subsidies and federal loans to upgrade old telephone wires for fiber-optic lines. By 2011, they were collecting $2.68 million a year from the Universal Service Fund. But a 2013 federal order determined that company president Larry Mayes spent telecom subsidy money on a fleet of vehicles and a fishing boat that weren't necessary for his business. The order also found that the $237,455 salary Mayes paid himself one year was "unreasonable" and "disproportionate" given the size of the company and what's typical for Anchorage, where he lives. So the company filed letters with the FCC stating its salaries "should be evaluated in the context of a small company where each employee wears multiple hats" and citing the island's "remoteness and harsh climate conditions.

Since 2016, Mayes' company has received $3.6 million from the federal broadband subsidy. But he also pocketed $3.54 million from the FCC through a program that replaces revenue phone companies once earned from connecting long-distance calls. The state of Alaska kicked in an additional $3.75 million via its Alaska Universal Service Fund. It's not enough. Some Adak residents said they're still paying the company for landlines they use as cellphone backups.

No One Uses the Subsidized Service

The reporting that brought these facts to light involved visiting every building the company itself told regulators it serves. Reporters knocked on every door. It's a disaster. And in a beachfront neighborhood called "Officer's Country," homes have been cleaved in half by hurricane-force Aleutian winds, with bathroom mirrors and toilets and kitchen tables standing exposed to the rain. In newer neighborhoods, rotted exterior walls have holes wide enough to drive a truck inside, while grass grows on living room floors and bedrooms are filled with bird nests.

Henry Collins, 61, lives in one of the few habitable homes the FCC paid Adak Eagle to connect. He was partially blinded years ago while cleaning a boat at the island docks. It didn't matter. But he accidentally cut Adak Eagle's internet cable with a string trimmer, so he never could afford the subsidized service anyway, and his rooftop Starlink receiver was untouched in the landscaping incident. A 26-year-old gamer named Steven Ivanoff tested his Starlink connection at the request of reporters and clocked it at 447 megabits per second. Before Starlink, Ivanoff's former roommate was notorious for using up the scant bandwidth Adak Eagle provided every time he went online to play, so neighbors hollered at him to get off the damn computer.

"But the rats ate my jalapeno peppers down to the stalk! Chomp chomp chomp."

That quote came from Elizabeth Pryor, who has leaned into the isolation by starting a mini farm. She doesn't use it. But her house rises across the street from a pile of rubble, the remains of a house fire, and both properties are on the list of homes for which Adak Eagle received subsidies to connect to the internet.

The FCC's Role and Non-Response

When asked about the publicly funded connections to demolished homes, Mayes said he is playing by the rules of the FCC's subsidy program. He directed questions to the agency. Reporters asked the FCC repeatedly. The agency never responded. The FCC in 2022 reduced the number of locations Adak Eagle was obligated to serve to 306 after the company reported some buildings were unlivable, but the agency left the subsidy amount unchanged.

According to federal data published by the Universal Service Administrative Co., the most locations that Adak Eagle reported having broadband available was 283. The buildings the FCC says Adak Eagle keeps wired for internet include duplexes, fourplexes and ranches where no sign of life was found. The agency shows connections at places where doors yawned open in the wind, hinges screaming with rust, no furniture inside, no appliances, yet in many cases, a single telephone still plugged into a wall.

"There was no established community on Adak" after the military's departure, according to the U.S. Navy's Record of Decision on the base closure, published in 2000.

The Navy's ongoing assessments documented houses being condemned and boarded up. Andilea Weaver, the company's former vice president, said Adak Eagle began replacing rat-gnawed copper landline wires to Adak buildings in 2006, nine years after the base closure. In 2016, Adak Eagle proposed a 10-year plan to receive new subsidies in exchange for connecting or maintaining lines to 346 locations, nearly every building left standing. The FCC agreed. The agency formally declared the new spending plan to be in the public interest.

What Happens Next

Whether the abandoned structures can beckon new occupants is an open question. Adak is so far west of the Alaska mainland that it's in a different time zone, so far west that it's almost in the Eastern Hemisphere. The last vestige of industry departed with the closure of the island's fish processing plant in 2020. Now the economy consists of a bit of hunting and bird-watching that lures a few hardy tourists aboard the two flights a week that serve the island. Alaska's Republican U.S. Sen. Dan Sullivan has argued the U.S. should open a new military base on Adak because of its strategic proximity to waters cruised by the Chinese and Russian navies. With $115 million set aside by Congress last year for "exploration and development of existing Arctic infrastructure," a Pentagon-led task force is developing recommendations on how to proceed.

Even the people who work for Adak Eagle have stopped relying on the internet service that the subsidy pays for. At the company's local office, a cinder block building surrounded by pickup trucks and wide spools of orange piping, two Starlink dishes sit above the front door, above the sign for Adak Eagle Enterprises. The company president who built his business on public money declined to comment on any of this, ending phone calls when reporters asked questions. The FCC, which keeps the money flowing, has not answered questions about how the Alaska Adak Eagle FCC Subsidy Program ended up wiring a ghost town. The last word belongs to the empty buildings themselves, still connected to fiber, still waiting for someone to use them.

Frequently Asked Questions

What is the Alaska Adak Eagle FCC Subsidy Program and why is it being scrutinized?

The Alaska Adak Eagle FCC Subsidy Program provides federal funding from the Universal Service Fund to keep internet infrastructure in Adak, but it is being scrutinized because it pays roughly $340,000 per year to connect hundreds of empty buildings, including abandoned homes and a former Navy base, while the population is only about two dozen residents. This has led to a federal subsidy of about $14,000 per year per person, highlighting a stark mismatch between the program's purpose and its outcomes.

How did Adak Eagle build its business on public money according to the article?

Adak Eagle used FCC subsidies and federal loans in the early 2000s to upgrade old telephone wires for fiber-optic lines, and by 2011 was collecting $2.68 million a year from the Universal Service Fund. A 2013 federal order found that company president Larry Mayes spent subsidy money on unnecessary vehicles and a fishing boat, and his $237,455 salary was deemed 'unreasonable' and 'disproportionate.'

Why do Adak residents prefer Starlink over the subsidized Adak Eagle service?

Residents report that Starlink, which arrived in 2023 without any FCC subsidy, offers speeds up to 40 times faster than Adak Eagle's service, which provides download speeds of just 1 to 10 megabits per second—far short of the FCC's 100-megabit broadband standard. For example, a resident tested Starlink at 447 megabits per second, and costs range from $90 to $140 per month, while the subsidized fiber is often too slow to load a modern webpage.

What evidence does the article provide that no one uses the subsidized internet service in Adak?

Reporters visited every building the company said it serves and found that many homes are abandoned, with rotted walls, grass growing on floors, and bird nests inside, yet they remain on the list for subsidies. Even a resident who accidentally cut Adak Eagle's cable never used the service because he couldn't afford it, and the company's own office uses two Starlink dishes instead of the subsidized internet.

How has the FCC responded to questions about the program's effectiveness?

When reporters asked the FCC about the publicly funded connections to demolished homes, the agency never responded. The FCC reduced the number of locations Adak Eagle was obligated to serve to 306 in 2022 after the company reported some buildings were unlivable, but it left the subsidy amount unchanged, and federal data shows the most locations with broadband available was 283.