29 Pages Posted: 12 Jul 2012
Date Written: August 15, 2006
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: 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