Internet access in the US

The swift adoption of the Internet by Americans in a little over a decade has few parallels in the world of technology. Access to the Web is now taken so much for granted that not having access is assumed to be a form of economic and social handicap. The debate on bringing Internet service provision under the umbrella of the Universal Service mechanism to bridge the “Digital Divide” has attained maturity, but not resolution. The apparent reluctance of American households to transition to broadband – relative to comparable economies – is a growing cause for concern among policy makers and members of the business community. However, research into the determinants of Internet demand, and factors which inhibit or promote its supply and subsequent use, has been unsystematic and unstructured. No distinction is usually made between those who access the Net from home for a fee, and those who access it from outside of home for free. This dissertation contributes to existing knowledge by (i) analyzing the decision to obtain basic Internet subscription at home in a strictly rational choice framework, with cost as a primary determinant, (ii) extending and modifying the analytical structure in order to study broadband demand, and (iii) squarely addressing the frequently overlooked topic of public access. It uses hitherto unexploited data from multiple sources, including the Current Population Survey (CPS), the Pew Internet and American Life Project (PIALP), the Federal Communications Commission (FCC), and the National Center for Education Statistics (NCES). The insights gleaned from the exercise should be of value to the scholar, the regulator and the industry insider trying to gauge the public’s taste for new technologies.