Increasing Low-Income Broadband Adoption through Private Incentives

Abstract

A long-standing public policy goal has been ensuring that almost all citizens are connected to some minimum level of communications services. This paper evaluates Comcast’s “voluntary commitment” to introduce a low-income broadband program that Comcast has branded “Internet Essentials (IE).” We use data from the U.S. Census Current Population Survey (CPS) and the National Broadband Map and a differences-in-differences approach to evaluate the program’s effects on subscription rates for eligible households.

Between 2011, when the program began, and 2015, broadband adoption by eligible households increased by more among households that lived in areas in which Comcast provided broadband internet service than among households that lived in areas served by other cable providers.

Using a difference-in-differences approach, we estimate that about 66 percent of IE subscribers represent true increases in low-income adoption as a result of the program, with the remaining subscribers being households that switched from a competitor and households that would have subscribed as part of a general upward trend in adoption. We find that even among low-income households, broadband demand is relatively inelastic.

Keywords: Broadband; Internet Access; Low-Income Subsidy; Elasticity

JEL Classification: L33, L51, L78, L86, l96