https://digitalcommons.pepperdine.edu/cgi/viewcontent.cgi?article=1040&context=sppworkingpapers

The broadband digital divide and the economic benefits of mobile broadband for rural areas

We examine the gap in broadband access to the Internet between minority groups and white households with geographically fine data on DSL subscription. In addition to income and demographics, we also examine quality of service and competition as components of the Digital Divide. The gaps in DSL demand for blacks and Hispanics do not disappear when income, education, and other demographic variables are accounted for. However, lack of competition is an important driver of the Digital Divide for blacks. Service quality is an important determinant of demand, and is related to the DSL gap for some groups.

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The Broadband Digital Divide and the Nexus of Race, Competition, and Quality

https://digitalcommons.pepperdine.edu/cgi/viewcontent.cgi?article=1011&context=sppworkingpapers

The broadband digital divide and the nexus of race, competition, and quality

The focus in this paper is on the residential demand for access to the Internet, and represents an extension of earlier work on Internet access demand by Rappoport, Taylor, Kridel, and Serad (1998), Kridel, Rappoport, and Taylor (1999), Kridel, Rappoport, and Taylor (2000), and Duffy-Deno (2000). The analysis of broadband demand has been studied by Eisner and Waldon (1999), Madden, Savage, and Coble-Neal (1999) and Madden and Simpspn (1997). With the aggressive marketing of cable modems and ADSL service, a growing number of residential households in the U.S. now have a choice regarding how they access the Internet. The choice set available, however, is not uniform. In some areas, the only form of access is through dial-up modem, while in other areas various forms of high-speed access (cable modems or ADSL) are available as well. This paper reports the results from a set of models of Internet access where the models are differentiated by the availability of Internet access options. The models are based on the analysis of surveys submitted by over 20,000 households during the period January – March, 2000. Among other things, we are able to report broadband penetration rates and compare those to Internet access estimates presented in the NTIA Report, Falling Through the Net: Toward Digital Inclusion. In addition, we present a more complete set of estimated price elasticities for both basic and high-speed access to the Internet.

Residential demand for access to the Internet

The Internet Demand Experiment (INDEX) was a project to measure how much people are willing to pay for different kinds of Internet quality of service (QoS), such as bandwidth or volume of bits transferred. In the bandwidth experiments, which took place during 1998-99, subjects were offered high-speed residential Internet connections. Each week the price of bandwidth was changed, and experimenters could observe the users’ responses to these prices. The resulting data allowed us to measure how consumers valued bandwidth in that environment. We found that most users placed a surprisingly low value on bandwidth, though certain kinds of users were willing to pay substantially more than others. The INDEX project was a set of experiment designed to estimate how much people are willing to pay for various kinds of Internet Quality of Service (QoS), most prominently bandwidth. The INDEX designers architected the system to provide different QoS’s on demand and to

/pdf/the-demand-for-bandwidth-evidence-from-the-index-project-5g5djkxmeu.pdf

The Demand for Bandwidth: Evidence from the INDEX Project

The demand for Internet access continues to grow at a dramatic rate. While the primary mode of access has been dial-up service, recent innovations have allowed even residential subscribers the option of obtaining affordable highs-peed or broadband access. In particular, cable television companies have begun to offer cable modems and many local exchange telephone companies are beginning to offer various forms of digital subscriber line (DSL) service. This chapter analyzes the demand for broadband access to the Internet by US households. Using a very large data set of US households with over 32,000 observations, we estimate a discrete-choice model for the demand for Cable Modems. Preliminary elasticity estimates indicate cable-modem Internet access demand to be price-elastic.

Don Kridel

Papers

The Demand for High-Speed Access to the Internet: