Disconnect in the Bering Sea: Inside the Multimillion-Dollar Federal Program Wiring Alaska’s Ghost Towns

On a wind-swept island in the Bering Sea, 1,200 miles from Anchorage, sits an abandoned house on a shuttered Navy base. Inside, there is no furniture, the walls are rotting, and the sub-Arctic gale blows freely through shattered windows. The last family to live here departed decades ago. Yet, running from the decaying outer wall down into the tundra is a bright orange pipe containing a black fiber-optic cable.

This cable was installed to connect the empty home to high-speed internet years after the military base closed. It costs American taxpayers more than $340,000 per year to provide this single building and hundreds of others—almost all of them vacant—with broadband access that no one uses.

This stark scene on Adak Island is the centerpiece of a joint investigation by the Anchorage Daily News and ProPublica. The reporting reveals how the Federal Communications Commission (FCC) has poured millions of dollars into obsolete and unused telecommunications networks in remote Alaska, funded by mandatory fees added to nearly every American’s telephone bill.

Main Facts: The Subsidized Void of Adak Island

The funding mechanism behind this waste is the Universal Service Fund (USF), a multibillion-dollar federal program designed to bring modern, affordable telecommunications to the nation’s most isolated communities. In Alaska, however, the USF frequently pays for slow, outdated internet connections that consumers have long abandoned.

In few places is the systemic failure of the USF more glaring than in Adak. Once a critical Cold War outpost housing thousands of Navy personnel and their families, the island’s population collapsed after the military base closed in 1997. While state demographers estimated Adak’s population at 77 last year, local residents say the year-round population is closer to two dozen.

Despite this population collapse, the local telecommunications carrier, Adak Eagle Enterprises, continues to receive federal subsidies designed to maintain a wireline broadband network on the island. In June, reporters flew to Adak to conduct an exhaustive, building-by-building audit of the network. They visited every single structure that Adak Eagle reported to federal regulators as an active service location. They knocked on every door and interviewed every resident they could find.

The investigation yielded a stunning finding: Not a single resident of Adak subscribes to the subsidized internet service provided by Adak Eagle.

Instead, the island’s remaining population has migrated entirely to Starlink, the satellite internet service operated by Elon Musk’s SpaceX. Starlink arrived in Adak in 2023 without receiving a single dollar of federal subsidies from the FCC. Residents report that Starlink’s satellite connections are up to 40 times faster than the local fiber-optic network and cost between $90 and $140 per month. By contrast, Adak Eagle’s website advertises copper and fiber plans ranging from $99 to $550 per month—prices that residents say were historically paired with restrictive data caps and sluggish speeds.

Chronology: The Rise and Fall of Adak’s Publicly Funded Network

The story of Adak Eagle is a case study in how public subsidies can build a network that outlives its utility, its population, and its economic justification.

[1997] Navy Base Closes -> Population collapses from thousands to near-zero
  │
[Early 2000s] Adak Eagle founded with FCC subsidies & federal loans
  │
[2006] Fiber-optic upgrade begins; copper lines replaced in empty subdivisions
  │
[2011] Annual USF subsidy to Adak Eagle peaks at $2.68 million
  │
[2013] FCC issues order finding President Larry Mayes misused subsidy funds
  │
[2016] FCC approves Adak Eagle’s 10-year plan to wire 346 locations
  │
[2020] Local fish processing plant closes; economy collapses
  │
[2022] FCC reduces mandatory service locations to 306; subsidy amount remains unchanged
  │
[2023] Starlink launches service on Adak; remaining residents switch instantly

The Post-Military Era

When the Navy officially departed in 1997, it left behind a ghost town of suburban-style subdivisions, paved roads, a theater, and even a shuttered McDonald’s drive-thru. According to the Navy’s 2000 Record of Decision on the base closure, there was no established civilian community on Adak at the time of the military’s exit. Government reports regularly documented houses being condemned and boarded up due to structural damage from hurricane-force Aleutian winds.

The Subsidized Expansion

In the early 2000s, Larry Mayes, an Anchorage-based businessman, established Adak Eagle using federal loans and FCC subsidies. In 2006—nearly a decade after the base had emptied—the company began replacing old copper telephone wires with fiber-optic lines capable of carrying both voice and internet. By 2011, the company was drawing $2.68 million annually from the Universal Service Fund.

Regulatory Scrutiny and the Ten-Year Plan

In 2013, a federal order revealed that Adak Eagle’s financial management was highly questionable. Regulators determined that company president Larry Mayes had used telecom subsidy money to purchase a fleet of vehicles and a fishing boat that were unnecessary for the business. The order also flagged Mayes’ annual salary of $237,455 as "unreasonable" and "disproportionate" for a company of Adak Eagle’s size. The company defended the salary in filings, citing the island’s harsh climate and the fact that its employees wore "multiple hats."

Despite these findings, the federal government continued to support the company. In 2016, Adak Eagle proposed a 10-year plan under the FCC’s Alternative Connect America Cost Model. The company committed to maintaining broadband access to 346 locations on the island in exchange for guaranteed, long-term federal subsidies. The FCC approved the plan, declaring it to be in the public interest.

The Final Collapse

In 2020, Adak’s last major employer, a commercial fish processing plant, closed its doors. The remaining residents were left in a deteriorating landscape where subdivisions like "Officer’s Country" lay in ruins, with homes literally sheared in half by the elements.

In 2022, the FCC acknowledged the decay, reducing Adak Eagle’s mandatory service footprint from 346 to 306 locations because many buildings had become physically unlivable. However, the agency did not reduce the company’s subsidy payments. By 2023, Starlink’s entry into the market effectively rendered the subsidized terrestrial network obsolete overnight.

Supporting Data: Tracking the Millions Flowing to Adak Eagle

To understand the scale of the waste, it is necessary to examine the overlapping streams of public funding that have kept Adak Eagle afloat. Since 2016, the company has received multiple federal and state subsidies, despite serving a virtually non-existent customer base.

Adak Eagle Revenue Streams (Since 2016)

With a local population of approximately 24 active residents, the federal broadband subsidy alone represents an annual public expenditure of roughly $14,000 per resident. If all state and federal telecommunications subsidies are combined, the government is spending nearly $45,000 per resident annually to support a network that none of them use.

Speed and Cost Comparison

On-the-ground testing confirmed the massive disparity between the subsidized legacy network and modern commercial satellite alternatives.

Adak Eagle Subsidized Fiber/Copper:
  Speed: 1 to 10 Mbps (Barely loads a modern webpage)
  Cost: $99 to $550 per month

Starlink Unsubsidized Satellite:
  Speed: 447 Mbps (Tested by resident Steven Ivanoff)
  Cost: $90 to $140 per month

During the June visit, year-round resident Steven Ivanoff, an active online gamer, tested his Starlink connection at the request of reporters. The test clocked a download speed of 447 Megabits per second (Mbps).

According to the FCC’s National Broadband Map, Adak Eagle’s network offers speeds between 1 and 10 Mbps—well below the federal standard of 100 Mbps for modern broadband. Residents recalled that before Starlink, internet speeds were so slow that when one person went online to play a game, neighbors would have to yell at them to get off the computer to free up bandwidth.

Official Responses: Silence and Deflection

Efforts to obtain accountability from both the service provider and the federal regulators responsible for overseeing the Universal Service Fund were met with evasion and silence.

The Service Provider

When reporters first reached Larry Mayes, the president of Adak Eagle, by phone to ask about the federal subsidies, he hung up. Mayes subsequently ignored:

• Detailed questions sent via email in May.
• A written interview request hand-delivered to his Adak office in June.
• Detailed questions emailed and hand-delivered to his Anchorage office in July.

When reached again by phone on July 13, Mayes declined to comment and terminated the call. His only statement before hanging up was that he is "playing by the rules" of the FCC’s program, and that any questions regarding the structure of the subsidies should be directed to the federal agency.

The Federal Communications Commission

The FCC, which administers the multibillion-dollar Universal Service Fund, has repeatedly declined to comment on the funding of empty homes in Adak or the broader deployment of internet subsidies in Alaska. Multiple inquiries sent by ProPublica and the Anchorage Daily News went completely unanswered.

This lack of transparency fits a broader pattern of regulatory indifference. The investigation found that the FCC has consistently maintained funding to Alaska telecom companies regardless of their operational performance or the legal track records of their owners:

• Fairbanks: The FCC continued to pay federal subsidies to a local telecom company while its owner, Roger Shoffstall, was serving time in federal prison for tax evasion.
• GCI Communications: The government continued to distribute subsidies to Alaska’s largest telecommunications provider, GCI, even after the company signed a $40 million settlement with the Department of Justice to resolve allegations of False Claims Act violations related to FCC subsidies. Under the terms of the settlement, GCI admitted no wrongdoing, and the Justice Department did not concede that its claims were unfounded.

Implications: Systemic Failures and Geopolitical Futures

The situation on Adak Island exposes deep structural flaws in how the United States funds rural broadband. The "build it and they will pay" model of the Universal Service Fund lacks the flexibility to adapt to shifting populations or disruptive technological advancements.

The Failure of the USF Funding Model

The USF is funded by a regressive charge on American telephone bills, meaning everyday consumers are directly financing legacy networks that are no longer economically viable. By locking service providers into 10-year funding agreements based on historical footprints rather than active subscribers, the FCC has created a system where companies are incentivized to maintain connections to empty houses to secure guaranteed federal revenue.

The emergence of low-Earth orbit satellite constellations, such as Starlink, has fundamentally changed the economics of rural connectivity. While terrestrial fiber is highly efficient in densely populated areas, the cost of maintaining physical lines across vast, uninhabited sub-Arctic expanses is prohibitive. The FCC’s failure to adjust its subsidy allocations in the face of satellite technology has resulted in taxpayers funding an obsolete monopoly.

The Geopolitical Context

While Adak is currently a ghost town, its story may not be over. The island lies in a highly strategic position near the western end of the Aleutian chain, close to maritime routes increasingly used by Russian and Chinese naval vessels.

Alaska’s senior U.S. Senator, Dan Sullivan, has aggressively lobbied the Pentagon to reopen Adak as a strategic military outpost. Last year, Congress allocated $115 million for the exploration and development of existing Arctic military infrastructure, and a Pentagon-led task force is currently reviewing options for the island.

Should the military return, the island’s infrastructure would require a complete overhaul. However, the legacy fiber network currently maintained by Adak Eagle is unlikely to meet modern military specifications.

For now, the orange conduits running through the tundra remain connected to rotting, empty buildings. The ultimate symbol of this policy failure sits in the center of Adak: the local office of Adak Eagle Enterprises. On the roof of the very building housing the company that receives millions in public subsidies to provide terrestrial internet, sit two active Starlink satellite dishes. Even the provider of the subsidized network has switched to the competition.