September 21, 2005

Broadband Adoption in the United States: Growing but Slowing

Broadband adoption at home in the United States: Growing but Slowing

The paper argues that, while broadband adoption has grown quickly in recent years, there are reasons to believe that it is slowing. The paper will develop a model of broadband adoption that hypothesizes that the intensity of online use is the critical variable in understanding the home high-speed adoption decision and the trajectory of the adoption curve. Further, the paper will argue that the intensity of internet use is a function of connection speed and years of online experience. At any given time, a large and significant impact of years of online experience on the intensity of internet use is an indicator of pent-up demand for broadband.

Using national survey data from 2002 and 2005, the paper shows that the role of online experience in explaining intensity of internet use has vanished over this time frame; the explanatory effect of having a broadband connection has grown. This suggests that relative to 2002 there is not much pent-up demand for high-speed internet use at home. The paper probes further into the survey data to offer reasons for slowing adoption. An implication of the paper’s main finding pertains to the nature of policy demands policymakers are likely to face in the future. That is, slowing broadband adoption might encourage bold policy responses (e.g., municipally-owned networks) in order to address worries that the United States is falling behind other countries in broadband uptake and deployment.