Private Solutions to Broadband Adoption: An Economic Analysis

Building and maintaining broadband networks is a tremendously expensive endeavor and even where networks are built they provide less benefit if vast swaths of the earth’s population does not see any value in using them. Research indicates that awareness, digital literacy, and affordability are the key barriers to adoption. A successful program, whether implemented by the public or private sectors, must expose nonusers to the benefits of being on-line and do so at low prices (or even free). While some governments have attempted to spur deployment and adoption, the public sector operates with limited resources.

Using subscriptions from the Lifeline program in the United States, we find that the use of the subsidy program rises with increases in unemployment and poverty. We suspect that private programs such as Facebook’s Free Basics may even be more effective than public programs, since the private programs are not influenced by political concerns and are available through participating operators to everyone for free without eligibility criteria.