Addressing the Broadband Demand Gap: Drivers and Public Policies
31 Pages Posted: 29 Dec 2012
Date Written: December 28, 2012
The debate about the digital divide in the field of Internet use and broadband has, in large part, been generated around statistics of households that own a computer and have purchased a broadband subscription (in other words, service penetration). As a result, the political discussion and public dialogue have focused until now on the need to increase adoption based on wider coverage of telecommunications networks. The underlying premise of this statement is that if the problems that delay infrastructure deployment were addressed, the challenge of the digital divide would be overcome. Without denying that there is some causal relationship between investment and adoption, it is important to note that one of the key variables that explains the digital divide is located on the demand side, rather than on the supply side. The purpose of this paper is to analyze the divide from this perspective in industrialized countries and compare it with a similar phenomenon in Latin America.
First, quantitative information is presented to demonstrate the existence of a gap in demand, even in industrialized countries. Based on this, the paper reviews the research conducted in the developed world, identifying common causal variables through statistics from different countries, pointing at the root cause of this shortfall. Having presented the situation in industrialized countries, the Latin American demand gap is then examined, focusing first on its size for those countries for which data are available. Following the same process as that of developed countries, the results of research carried out for Latin American countries are presented with the aim to explain the nature of the demand gap. This diagnosis provides a context for outlining policy recommendations that make it possible to address some of the adoption barriers.
Keywords: broadband, developing countries, information technologies
JEL Classification: O14, O30, O31, O32
Suggested Citation: Suggested Citation