Broadband Achievement Index: Moving Beyond Availability

28 Pages Posted: 25 Oct 2010

See all articles by Narine Badasyan

Narine Badasyan

Department of Economics and Finance, Murray State University

Dave Shideler

Oklahoma State University - Department of Agricultural Economics

Simone Juhasz Silva

Department of Economics and Finance, Murray State University

Date Written: October 5, 2010

Abstract

Significant resources are being allocated to accelerate high speed broadband deployment and adoption in unserved and underserved areas. However, there are increasing gaps between as well as within the states in terms of broadband availability, adoption, use and speed. A number of studies suggest that the paucity of broadband diffusion is only partially due to a lack of availability of broadband. Yet, broadband availability is often the only factor that is used to assess broadband needs for policy interventions. This paper proposes a composite Broadband Achievement Index (BAI) to measure each state’s current broadband achievement relative to other states providing an important benchmark for assessing state-specific needs and designing policies targeting those needs. The index combines several key performance sub-indices including broadband availability, adoption, affordability, speed and the dispersion of the broadband coverage within the states providing a more comprehensive picture of where the states stand in their evolution towards high-performance America. The sub-indices are constructed based on Data Envelopment Analysis (DEA). Exploiting data relationships, this methodology combines indicators that are common across states while explicitly taking the diversity of the states into account, which may be due to state specific factors such as existing communications infrastructures (cable or telephone), geography and state specific policies. Additionally, the paper uses second order stochastic dominance (SOSD) to compare the digital divide among the states based on county level adoption rates. Two states may have the same average adoption rates, but the connections may be concentrated in one metropolitan area for one state, while more equally distributed across counties in the other. With SOSD, the states with more equal spread of broadband diffusion among counties rank higher. The results help to detangle the sources for low broadband diffusion in states and offer policy implications.

Keywords: Broadband, Digital Divide, FCC, Data Envelopment Analysis, Stochastic Dominance

Suggested Citation

Badasyan, Narine and Shideler, David and Silva, Simone, Broadband Achievement Index: Moving Beyond Availability (October 5, 2010). Available at SSRN: https://ssrn.com/abstract=1687956 or http://dx.doi.org/10.2139/ssrn.1687956

Narine Badasyan (Contact Author)

Department of Economics and Finance, Murray State University ( email )

Murray, KY 42071-0009
United States

David Shideler

Oklahoma State University - Department of Agricultural Economics ( email )

Stillwater, OK 74078-6026
United States

Simone Silva

Department of Economics and Finance, Murray State University ( email )

Murray, KY 42071-0009
United States

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