A retrospective study on the regional benefits and spillover effects of high-speed broadband networks: Evidence from German counties

This study aims to assess the economic benefits of high-speed broadband within and across neighboring counties in Germany. Utilizing a balanced panel dataset of 401 German counties with data from 2010 to 2015 as well as different panel estimation techniques, we find that an increase in average broadband speed has a significantly positive effect on regional GDP in the average German county. Furthermore, we find that broadband deployment in German counties induces not only substantial economic benefits in terms of direct effects within counties but also positive regional externalities across counties. According to our estimation results, an increase in average bandwidth speed by one unit (1 Mbit/s) induces a rise in regional GDP of 0.18%. This effect is almost doubled if we also take regional externalities into account (0.31%). Moreover, we find that regional agglomeraton effects are of particular relevance for rural counties. Our cost-benefit analysis of subsidies based on conservative estimates suggests efficiency gains, as the total economic per capita benefits (€164) of subsidy programs to encourage broadband expansion exceeded their associated per capita costs (€114).     

Broadband adoption and availability: Impacts on rural employment during COVID-19

Amidst COVID-19-related stay-at-home orders, the economy moved largely online and broadband internet became more important than ever. This paper explores the relationship between broadband and employment rates during April and May 2020 in rural U.S. counties. We use two broadband dimensions: infrastructure availability rates and household adoption rates. We use a two-stage least squares approach to address endogeneity and control for socioeconomic, demographic, and pandemic-related factors. Results show broadband availability and wired broadband adoption both had significant, positive impacts on the employment rate. Our findings suggest both broadband adoption and availability may be associated with economic benefits in rural America.     

Industrial Structure and Unemployment in Regional Labor Markets Industrial Structure and Unemployment

Even during periods of moderated national joblessness, certain regions face stubbornly high unemployment. "Rust Belt" areas are often particularly affected and raise the question of whether such labor markets may not clear even in equilibrium. This article examines evidence from a panel data set of West Virginia counties, along with case-study surveys. The combined findings help provide a better understanding of persistent local unemployment, which appears to be due to nonclearing labor markets.     

State broadband policy: Impacts on availability

We use a county-level panel dataset from 2012 to 2018 to assess the impacts of various state policies on total and rural broadband availability in the United States. The primary dependent variable is the percentage of residents with access to 25 Megabits per second (MBPS) download and 3 MBPS upload speeds via a fixed connection, with alternative specifications considering other aspects of availability such as technology type and competition. We control for the main determinants of Internet availability such as income, education, age, and population density. Our policy variables come from the newly released State Broadband Policy Explorer from the Pew Charitable Trusts and individual contacts from the nationwide State Broadband Leaders Network. Our primary policies of interest are those related to: (1) availability of state-level funding, (2) existence of a state-level broadband office/task force with full-time employees, and (3) restrictions on municipal/cooperative broadband provision. We find a positive and significant impact of state-level funding programs on general (and fiber) broadband availability, and a negative impact of municipal/cooperative restrictions. The findings are similar when the analysis is restricted to the rural portions of counties.     

Is faster better? Quantifying the relationship between broadband speed and economic growth

In this paper, I aim to quantify the relationship between higher broadband speeds (10 Mbps versus 25 Mbps) and the growth rates in important economic outcomes in U.S. counties including jobs, personal income, and labor earnings. Doing so exposes the potential for severe selection bias in studies of broadband's economic impact, which is addressed in this study using Coarsened Exact Matching. Once balanced, the data reveal no economic payoff from the 15 Mbps speed difference between the years 2013 and 2015 (when data is available). I also revisit an early and widely-cited study on broadband's effect on employment to evaluate the possible impacts of selection bias, and conclude that the positive benefits of broadband reported in that particular study are likely spurious. The selection bias problem may infect other studies on the economic impacts of broadband Internet services. Future research on broadband's economic impact should explicitly address selection bias.     

Transitions into Permanent Employment in Spain: An Empirical Analysis for Young Workers

This article analyses the transitions into permanent employment of a sample of young temporary employees in Spain for the period 1996–2003. For this purpose, we apply multiple‐spell duration techniques to a longitudinal dataset of temporary workers obtained from Social Security registers. Our main findings are as follows. First, the transitions from a temporary contract into unemployment and into another temporary contract are very high when compared with transitions into permanent employment. Second, the entry into permanent employment — although slightly increasing with tenure at the temporary contract — is very low; the only exception is that of semi‐skilled and unskilled individuals, who are particularly likely to enter into permanent employment at the 24th and the 36th month of tenure (respectively). Third, we find that there exists a substantial proportion of workers with unobservable characteristics that make them show high exit rates from temporary employment and, at the same time, a rapid exit from unemployment — while the remaining individuals exit from unemployment more slowly, particularly those who are receiving unemployment benefits.     

Broadband׳s contribution to economic growth in rural areas: Moving towards a causal relationship

This paper uses recent data on both broadband availability and adoption to empirically gauge the contribution of broadband to the economic growth of rural areas of the United States over the past decade. Availability data from the National Broadband Map aggregated to county level is used in conjunction with county-level adoption data from Federal Communication Commission. Economic variables of interest include median household income, number of firms with paid employees, total employed, percentage in poverty, and the percentage of employees classified as either creative class or non-farm proprietors. A propensity score matching technique (between a “treated” group associated with various broadband thresholds and a control group) is used to make preliminary causal statements regarding broadband and economic health. Growth rates between 2001 and 2010 for different economic measures are tested for statistical differences between the treated and non-treated groups, restricting the analysis to non-metropolitan counties. Results suggest that high levels of broadband adoption in rural areas positively (and potentially causally) impacted income growth between 2001 and 2010, and negatively influenced unemployment growth. Similarly, low levels of broadband adoption in rural areas lead to declines in the number of firms and total employment numbers in the county. Broadband availability measures (as opposed to adoption) demonstrate only limited impacts, suggesting that future broadband policies should be more demand-oriented.     

Closing the rural broadband gap: Promoting adoption of the Internet in rural America

Even as geographic disparities in high speed Internet access narrow, an urban–rural broadband gap persists, pointing to the importance of individual differences in motivations to adopt broadband as the key to closing the gap. Diffusion of innovation is reconceptualized through contemporary perspectives of the digital divide and social cognitive theory and tested on a survey sample drawn from four rural communities. Path analysis was used to examine the factors that cause broadband Internet service adoption in rural communities. Prior experience with the Internet, the expected outcomes of broadband usage, direct personal experience with broadband, and self-efficacy had direct effects on broadband intentions. Age and income, but not education or ethnicity, also had direct impacts. Efforts that promote the personal benefits of broadband and advanced ICT literacy skills among Internet users are recommended.     

Motives and means for public investment in nationwide next generation networks

There is now strong interest among governments in allocating public funds for the purpose of promoting investment in very high speed broadband. Motives include industrial policy, and the attainment of equity objectives and of economic recovery. The paper examines the various dimensions of choice over where and how to intervene. It also considers three nationwide broadband plans in Australia, New Zealand and Singapore, in each of which industrial policy appears to be the major objective, combined with equity goals. Particular attention is paid to the resolution of problems related to the incumbents’ legacy assets.     

Unbundling the incumbent and deployment of high-speed internet: Evidence from France

In this paper, we study the impact of competition on the legacy copper network on the deployment of high-speed broadband. We first develop a theoretical model, which shows that the relation between the number of competitors and investment in a quality-improving technology can be positive if the quality of the new technology is high enough, and is negative otherwise. We test these theoretical predictions using data on broadband deployments in France in more than 36,000 local municipalities. First, using panel data over the period 2011–2014, we estimate a model of entry into local markets by alternative operators using local loop unbundling (LLU). Second, using cross-sectional data for the year 2015, we estimate how the number of LLU entrants impacts the deployment of high-speed broadband with speed of 30 Mbps or more by means of VDSL, cable and fiber technologies, controlling for the endogeneity of LLU entry. We find that a higher number of LLU competitors in a municipality implies lower incentives to deploy and expand coverage of high-speed broadband with speed of 30 Mbps or more.     

Economic growth and broadband access: The European urban-rural digital divide

This paper estimates the regional effects of high-speed broadband coverage on economic growth in a panel of 1348 regions across all European Union Member States between 2011 and 2018. We distinguish between different connectivity speed levels by aggregating the available regional data across all existing broadband technologies, and investigate how regional differences in the contribution of broadband coverage to real economic growth can quantitatively explain the persistence of the European urban-rural digital divide. In order to make our results robust to endogeneity and disaggregated data availability issues, we employ a bootstrap-based bias correction for the dynamic fixed effects estimator. We find that expansions in the provision of lower-speed broadband access accelerated annual per capita growth in both urban and rural regions through diminishing returns to scale, but that the effects were weaker in those regions characterized by larger ruralization. High-speed broadband coverage, on the contrary, could only be significantly related to rural economic growth and had no impact within their urban counterparts. We find evidence that the costs of these high-speed rural connectivity expansions had not yet been offset, but that they exhibit increasing returns to scale with cut-off levels nearing full coverage. These results indicate that the high-speed digital expansion of rural Europe is a potential gamechanger for further rural development policies through its role as a general-purpose infrastructure, and consequently argue in favour of increased efforts to close the urban-rural digital gap.     

Broadband access in the EU: An assessment of future economic benefits

This paper evaluates the net economic benefits that would derive from the implementation of the broadband infrastructure deployment targets by 2020 as entailed by the Digital Agenda for Europe Initiative set forth by the European Commission. As a first step, we estimate the returns from broadband infrastructure for the period 2005–2011, differentiating the impact of broadband by levels of adoption and speed while accounting for reverse causality and extensive heterogeneity. In the second step, the cost of broadband roll-out is assessed under different assumptions of technical performance and contrasted with the forecasted benefits that derive from increased broadband coverage. We find that in the base case scenario the overall future benefits outweigh the investment costs for the European Union as a whole for the highest performance technologies. This holds also for the majority of member states individually. We further extrapolate the returns by country under different scenarios of implementation. In most cases the benefits are substantially well above the costs. Private sector is reluctant to invest, as investors in broadband infrastructure only can partially appropriate benefits. This would suggest a rationale for the public sector to subsidize build-out of high speed broadband infrastructure.     

Broadband achievement index: Moving beyond availability

High-speed access to the Internet enhances economic prosperity, social development and global competitiveness. Significant progress has been made in broadband deployment in the last decade. Nevertheless, there are increasing gaps in broadband adoption, use and speed between, as well as within, the states. Federal and state legislators and regulators currently use a number of indicators such as adoption, availability and speed to track states’ progress in broadband diffusion in order to design appropriate policy responses. Single indicators, however, when analyzed individually, fall short of capturing multi-dimensional aspects of broadband diffusion and, thus, do not provide an integrated and easily comprehensible picture of states’ advancement. To monitor states’ overall progress it is useful to aggregate various indicators into a composite index that could measure the overall extent of broadband diffusion. A composite index can also provide with an important benchmark for designing policies to improve states’ overall performance. This paper offers a flexible framework for benchmarking states’ achievement in broadband diffusion by proposing a composite Broadband Achievement Index (BAI). The index combines several key performance indicators: broadband availability, adoption, competition, speed and the dispersion of broadband adoption within the states utilizing FCC's Form 477 data and the recently collected census block level broadband availability data from NTIA. The purpose is to provide a more comprehensive picture of where the states stand in their evolution toward high-performance America by measuring each state's current broadband achievement relative to other states and providing an important benchmark for assessing state-specific needs. The indicators are combined using the Benefit of the Doubt (BOD) methodology (Cherchye, Moesen, & Van Puyenbroeck, 2004). The methodology is founded on the premise that, absent a consensus on social policy priorities, that are, on which indicators are more important and should be given higher weights in the index, each state is granted leeway for deciding how to weigh its own indicators and the most favorable weights for indicators are determined for each state. A good relative performance in a particular dimension is seen as revealed evidence of setting high state policy priority to that indicator, when each state's specific policy priorities are unknown. Additionally, the Second Order Stochastic Dominance (SOSD) methodology is used to compare the dispersion of adoption in the states. Using SOSD the states are ranked under the assumption that proportionally higher and more equally distributed adoption rates are better.     

A preview of the broadband fabric: Opportunities and issues for researchers and policymakers

The Broadband Deployment Accuracy and Technological Availability (DATA) Act signed into law in March 2020 requires the development of a national “broadband serviceable location fabric (BSLF)” containing georeferenced information on all locations where fixed broadband could be installed. This represents a significant shift from prior datasets, where broadband availability was gauged from the estimated number of people/households in each Census Block (i.e., without geolocations). The inclusion of agricultural structures is particularly important, since broadband investment in agricultural zones has been limited to date. We use an early version of the BSLF for the state of Oklahoma, produced by CostQuest Associates, to demonstrate the opportunities and issues that may arise for broadband researchers and policymakers as the DATA Act becomes reality. We highlight four main takeaways: (1) consideration of non-residential units greatly impacts overall availability estimates; (2) data quality (and quantity) varies greatly across counties; (3) BSLF residential unit counts differ from FCC or Census estimates; and (4) practitioners will still need service-area shapefiles/addresses from providers to use the fabric most effectively.     

Speed isn't everything: A multi-criteria analysis of the broadband consumer experience in the UK

In this paper, we demonstrate that there is more to consumer experience than just broadband access speed. We identify and describe a complex and dynamic set of interactions that occur between different factors that collectively determine consumer experience. We suggest that the relationship between broadband speed and consumer experience follows an inverted U-shape. Access speed is necessary to provide consumers with a good experience, but it is not sufficient. Based on our findings, a more nuanced understanding of the market for broadband Internet access products is outlined and a foundation for deriving valuable policy implications is developed.     

Does Homeownership Prolong the Duration of Unemployment?

We examine the effects of homeownership on individuals' unemployment durations. An unemployment spell can terminate with a job or with nonparticipation. The endogeneity of homeownership is addressed by estimating a full maximum likelihood function jointly modeling the competing hazards and the probability of being a homeowner. Unobserved factors contributing to the probability of being a homeowner are allowed to be correlated with unobservable heterogeneity in the hazard rates. Not controlling for ownership selection, there is neither a significant difference in the job‐finding hazard nor in the nonparticipation hazard of unemployed owners and renters. If we jointly model the ownership selection, we find that unemployed homeowners are more likely to find a job than renters.     

Implementing policy on next-generation broadband networks and implications for equity of access to high speed broadband: A case study of Australia's NBN

Next generation telecommunications infrastructure is expanding and supporting rapid growth of broadband technologies and a digital economy. In this context, digital information and communications technologies (ICTs) are of increasing importance as a means for people to gain access to health or social services, employment opportunities, information and social networks. In this article we draw on our recent case study research to examine the policy (and politics) shaping implementation of Australia's National Broadband Network (NBN) and its likely effects on equity of access to high speed broadband (HSB) services. We monitored NBN policy and implementation from 2015 to 2018 through policy documents, reports, and media. To assess likely effects of NBN policy on implementation and subsequently on equity of access to HSB we: a) applied a framework defining four elements of equity of access; and b) analysed stakeholder views drawn from media articles and 22 interviews with experts on NBN policy including politicians, government staff, and industry representatives. We found that equity considerations competed with political and commercial imperatives during the rollout of the NBN. This resulted in positive and negative consequences for equity of access to HSB, with a change in policy and implementation in 2013 bringing greater risks to equity of access. The case study provides a framework for considering equity in the implementation of next generation telecommunications infrastructure and highlights the importance of considering equity in the evaluation of telecommunications infrastructure.