Broadband Access and Content Consumption

29 Pages Posted: 12 Jul 2012  

Lorin M. Hitt

University of Pennsylvania - Operations & Information Management Department

Prasanna Tambe

New York University (NYU) - Leonard N. Stern School of Business; New York University (NYU) - Department of Information, Operations, and Management Sciences

Date Written: August 15, 2006

Abstract

We use panel data describing Internet usage before and after broadband adoption to explore how access to broadband drives changes in content consumption. We motivate our analysis with a model that accounts for access speed, the bandwidth intensity of different types of content and the opportunity cost of time to explain usage changes. Faster download speeds generally increase consumption because deadweight losses incurred while waiting for content to load are significantly smaller.

Furthermore, factoring preferences for content of differing bandwidth intensities into our model suggests large increases in consumption for individuals who may have spent little time online in a narrowband environment because the high bandwidth services they prefer require prohibitive amounts of time to download. Our data confirms that people who switch to broadband spend greater amounts of time online after controlling for time trends, with larger gains accruing to higher-bandwidth services. Consistent with our model, some of the largest usage gains come from individuals who comprised the lowest usage quintile when they were narrowband users, but greatly increased consumption of high-bandwidth applications after adopting broadband. These users consume content in greater quantities than users.

Suggested Citation

Hitt, Lorin M. and Tambe, Prasanna, Broadband Access and Content Consumption (August 15, 2006). TPRC 2006. Available at SSRN: https://ssrn.com/abstract=2104372

Lorin M. Hitt (Contact Author)

University of Pennsylvania - Operations & Information Management Department ( email )

571 Jon M. Huntsman Hall
Philadelphia, PA 19104
United States
215-898-7730 (Phone)
215-898-3664 (Fax)

Prasanna Tambe

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
New York, NY NY 10012
United States

New York University (NYU) - Department of Information, Operations, and Management Sciences ( email )

44 West Fourth Street
New York, NY 10012
United States

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