Telecom Trends

The Information Technology & Innovation Foundation released a report [ pdf, 330KB] last week called Policies to Increase Broadband Adoption at Home. That policy paper follows a study [ pdf, 600KB] conducted by Janice Hauge of the University of North Texas and James Prieger of Pepperdine University that examined Demand-Side Programs to Stimulate Adoption of Broadband: What Works?

The impetus for these reports was a statistic that should ring a familiar tone for us in Canada: between 92 to 94 percent of U.S. households can subscribe to broadband but only approximately 65 percent subscribe. Why?

We have asked that question a number of times over the past year or more in respect of Canadian broadband adoption and most recently, we raised the issue in our October report [ pdf, 944KB], Lagging or Leading. The ITIF report suggests that there are a variety of reasons why people choose not to subscribe to broadband. The three factors cited in the ITIF report are:

• affordability (e.g., of the service or a PC),
• usability (e.g., lack of digital literacy skills, physical handicaps), and
• lack of relevance or perceived value (e.g., consider Internet a waste of time).

The report finds variability in the relative importance of these factors based on the type of individual. For example, among higher income, older Americans a lack of interest may be a more important factor than the cost; for lower-income, younger households, cost may be more of a deterrent.

If the United States is to achieve near universal broadband adoption—on the order of telephone adoption rates—at least in the near to moderate term, the federal government will have to develop and implement policies designed to spur broadband adoption.

The North Texas / Pepperdine study examined the evidence available on the degree to which demand-side programs have fulfilled their purpose of stimulating broadband adoption.

On the spectrum from national to local programs:

• Nationally funded programs with inadequate oversight can lead to waste, fraud, and abuse.
• Local programs have more complete knowledge of the barriers to adoption in the community.
• Local efforts can better ensure that programs are utilized by the intended recipients.
• Local efforts may have limited capability to collect and evaluate data.
• National efforts may have more capability to collect and evaluate data.

We need to ensure that our national broadband strategies provide incentives for continued investment in advanced infrastructure, a topic to be picked up further at another time.

But, we also need to emphasize the demand component of broadband adoption. Both of these reports reports are worthwhile reading - adding to the knowledge base as Canada continues to develop our national digital strategy.