Segmental new-product diffusion of residential broadband services

Aggregate models of innovation diffusion do not capitalise on valuable consumer adoption dynamics that may be useful to policy makers and market planners. The non-diffusion choice literature shows quite clearly that these dynamics may indeed be very important factors in the diffusion process. The authors present a segmental broadband diffusion model that is estimated from consumer survey data that measure the effect that household income has on its propensity to adopt this technological product. The results suggest that early broadband adopters are mostly made up from wealthy households and only as time progresses do less well off households adopt. The findings presented in this paper will be important to market planners and policy makers requiring a relatively simple technique that forecasts segmental innovation diffusion.     

Spatial data constraints: Implications for measuring broadband

The accurate determination of where broadband telecommunication services are available in the United States continues to be a significant challenge. Existing data regarding broadband provision, such as that provided by the Federal Communication Commission (FCC) simply designate ZIP codes with at least one high-speed Internet subscriber. As ZIP code areas vary greatly in size and shape, the lack of geographic specificity as to exactly where broadband is available, particularly within ZIP code areas, confounds communications policymaking. Further, there are a number of additional geographic nuances concerning broadband availability that also inhibit empirical examination and policy generation, including the spatial limitations of digital subscriber line services. The purpose of this paper is to briefly review the issues concerning broadband measurement in the United States and provide an empirical analysis of several spatial data constraints that must be accounted for when interpreting and constructing public telecommunications policy.     

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.     

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.     

Regional differences in residential demand for very high bandwidth broadband internet in 2025

The future demand for data and the role of gigabit networks are central issues in the context of Next Generation Access (NGA) network roll-out. Based on a generic model, which allows to predict unconstrained future broadband demand in different regions and countries, the authors compare the results for Germany, the UK and the Flemish region, and discuss reasons for the different outcomes. The generic market potential model thereby allows to project the future demand for bandwidth from residential customers on the basis of applications and their bandwidth needs, user profiles and population structure on a household level. Despite a general trend towards an increasing need for broadband, there are clear differences. On the one hand, these point to the relevance of socio-demographic factors for broadband adoption. On the other hand, the relatively high proportion of refusals shows that there is still a need for further educational work on the part of public authorities and providers. Finally, it has to be stated, that our forecast relies on the assumption that connectivity and thus that the availability of area-wide gigabit capable broadband access does not represent a bottleneck.     

The broadband bonus: Estimating broadband Internet's economic value

How much economic value did broadband Internet create? Despite the importance of this question for national policy, no research has estimated broadband's incremental contribution to U.S. GDP by calibrating against historical adoption and incorporating counterfactuals. This study provides benchmark estimates for 1999 through 2006 and finds that broadband accounts for $28 billion of the $39 billion observed in 2006. Depending on the estimate, households generated $20-$22 billion of broadband revenue and approximately $8.3-$10.6 billion was additional revenue created between 1999 and 2006. Consumer surplus accounted for $4.8-$6.7 billion of this amount, which is not measured in GDP. An Internet-access Consumer Price Index would have to decline by 1.6-2.2% per year for it to reflect this unmeasured value. These estimates differ from existing benchmarks by an order of magnitude and relate to several policy debates.     

The involvement of utilities in the development of broadband infrastructure: A comparison of EU case studies

Energy companies and other utility providers have been often involved in the provision of telecommunications services. Nevertheless, their contribution to broadband development has varied significantly over time. In the late 1990s, both local and national utilities in the European Union (EU) engaged in the provision of broadband networks, but only few of them managed to establish themselves as major broadband providers. More recently, new projects involving national utilities have been announced in several EU countries, opening new scenarios for utilities’ contribution to Next Generation Access (NGA) development. This paper identifies and explores the factors affecting the entry and the success of utilities in the EU broadband market, through the comparison of four case studies from four EU countries (Germany, Italy, Sweden and the UK). The evolution of utility involvement in the EU broadband markets is assessed against the interaction of market, technology and policy factors, focusing on the impact of policy and regulatory measures. As a result, this paper provides fruitful insights into the relevance and effectiveness of public interventions in broadband markets. Across the four case studies, public support and public ownership emerged as the main drivers for the involvement of utilities in EU broadband markets, with regulatory measures and economies of scope exerting a limited and decreasing influence. However, the contribution of utilities has varied significantly across the cases studied, reflecting the different approaches taken at national and local level to support broadband development, in spite of the common regulatory framework.     

Does strategy matter? A comparison of broadband rollout policies in Finland and Sweden

This study investigates broadband policies applied in Finland and Sweden with special reference to the geographical coverage of the required network infrastructure. These two Nordic countries are seen as forerunners in the development of the information society, and they also share several other similarities bearing relevance to the take-up of broadband. However, they have applied different broadband strategies: Sweden, one of the first-movers in this field, already launched its ambitious and interventionist national ICT infrastructure program in 2000, whereas the Finnish broadband strategy, published in 2003, largely relies on market forces. The present article analyses these broadband strategies, and attempts to identify their actual differences. It appears that the Finnish strategy caused temporary higher broadband prices and a somewhat slower rollout. However, the current results of the two countries’ strategies in terms of coverage and usage levels, as well as end-user prices, do not indicate any significant long-term policy-induced impacts.     

User motivation for broadband: A rural Danish study

The diffusion of broadband has gained much research attention, in particular in relation to the urban-rural divide. However, research has focused primarily on the supply side of broadband roll-out, while the demand side has been somewhat neglected. This article illustrates the complexity of broadband adoption and argues that a rural adoption approach needs to draw on existing social meaning systems. By focusing on the user motivation for broadband, this article presents findings from a qualitative study of rural residents. Means-end theory was used as a framework for understanding these motives. Furthermore, the article adapts the FCB grid as a tool for both public and private providers of broadband to examine effective rural promotion strategy.     

Challenges for a broadband service strategy in rural areas: A Romanian case study

Broadband network deployment plays an important part in the strategic policies in Europe to promote growth and innovation in all sectors of the economy in addition to social and territorial cohesion. In compliance with existing community policies, Romanian strategies in this field seek to provide the necessary support for broadband connectivity in rural areas. The goal of this study is to define a rural end-user profile to plan the most appropriate broadband service strategy from both a technical and a marketing perspective. Our empirical research involves an exploratory survey conducted in rural areas in northwestern Romania (n=1040 respondents). The findings reveal low levels of customer satisfaction and users more interested in data transfer than voice or video applications. Given this rural user profile, simulations of network traffic were conducted. The simulation results suggest that WLANs are the most suitable solution for the “last mile” broadband segment.     

Is broadband the future? An analysis of broadband technology potential and diffusion

This paper examines the policy issues surrounding residential broadband technology, discusses how broadband extends Internet capabilities and at what cost, and makes recommendations for future applications of broadband. It focuses on residential broadband access, and in examining the future of broadband, it identifies three areas of concern: regulatory tendencies and tensions in the US, international diffusion of broadband, and the overall consumer appeal of broadband content. Specific policy recommendations center on providing regulation that guarantees open access, enforces reasonable pricing plans, and encourages innovative content.     

The economic impact of broadband on growth: A simultaneous approach

This paper investigates how broadband penetration affects economic growth. A macroeconomic production function with a micro-model for broadband investment is used to estimate the impact of broadband infrastructure and growth. The results indicate a significant causal positive link especially when a critical mass of infrastructure is present. The scope of this research is 22 OECD countries based on data collected for the period 2002–2007.     

Effects of broadband availability on total factor productivity in service sector firms: Evidence from Ireland

While broadband is widely believed to augment productivity, there is little firm-level evidence of a generalised causal effect. In this paper we examine whether the introduction of digital subscriber line (DSL) broadband services increased firms' productivity in nine sub-sectors within the services and distribution sector in Ireland from 2006 to 2012. Firm-level panel data on firms' characteristics are linked to spatial information on the rollout of DSL. While we do not find significant productivity effects in the services sectors taken together, we do find positive and significant effects on firm's total factor productivity in Information & Communication and Administrative & Support Services.     

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.     

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.     

An evaluation of the Connected Nation broadband adoption program

Closing the digital divide and increasing broadband adoption within households and communities continues to be a target for government and nonprofit groups. While a large number of studies have examined policies and programs aimed at improving broadband infrastructure availability, little analysis to date has focused on evaluating efforts to increase adoption. One of the most well-known programs focused on adoption is Connected Nation, which partnered with 14 states to provide local curricula aimed at raising residential connection rates. This analysis uses a generalized difference-in-difference methodology to evaluate the effectiveness of the Connected Nation program in 5 states during 2012 and 2013. The results indicate that participation in the Connected Nation program had no significant impact on broadband adoption rates. This paper represents a rigorous evaluation of one of the most well-known adoption-oriented programs and emphasizes that measurable impacts of such efforts may not accrue over the short term.     

On the regional impact of broadband on productivity: The case of Brazil

This paper analyses the incidence of broadband on regional productivity in Brazil, intending to find out if the economic impact is uniform across all territories of the country. The possibility of performing a regional approach to test the effect of broadband on productivity in an emerging country represents a novelty for the literature. Results suggest that the impact of broadband on productivity is positive although not uniform across regions. On the one hand, it seems to depend on connection quality and network effects. Faster download speed and critical-mass accounting for network externalities in the region enhance the economic impact of broadband. On the other hand, higher productivity gains are estimated for the less developed regions. The fact that the less productive regions in Brazil seem to be benefiting more from broadband may suggest that it can constitute a factor favoring regional convergence in the country.