The Broadband Adoption Index: Improving Measurements and Comparisons of Broadband Deployment and Adoption

Abstract

Countries around the world are increasingly concerned as to whether the adoption of broadband technology by their respective citizens is sufficient to support economic growth and social development. Unfortunately, such concerns are often expressed in terms of where a country ranks among its peers by means of raw adoption numbers. Such raw data are often misleading and incomplete. In this Article, we propose a different and more policy-relevant approach to adoption measurement. We develop a value-based Broadband Adoption Index (BAI) that compares the actual value to society that results from the adoption of broadband technology to a target level of adoption value. This target level will vary from country to country and is a function of the social value of broadband connectivity, measured as the difference in the social benefits and the costs of broadband. The BAI is specifically designed to accommodate and include the value of different connection modalities, like mobile broadband, into a single index - something that merely summing the number of connections cannot do. We believe that policymakers can adopt aspects of the BAI approach immediately, with particular attention to collecting and using proper information for policy decisions.

Keywords: Broadband Adoption Index, OECD, ranks, broadband

JEL Classification: K20, K23, K40, L50, L51, L96, L98, O38