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158 CHAPTER 10 The Determinants of Disconnectedness Understanding US Broadband Unavailability kenneth flamm This chapter reviews recent US broadband data, and briefly discusses why the broadband “connectedness” portrayed in the FCC postal code–level data is in some respects problematic, with the problem of “disconnectedness” addressed in this chapter a potentially more significant problem than the FCC postal code numbers may suggest. This chapter’s preliminary conclusions are that, overall, there was a steep decline in “disconnectedness” across the United States over the 2005–2008 period, but that significant pockets of disconnectedness persist. background Given the increasing emphasis among analysts on the role, actual and potential, of information technology in productivity growth,1 it is not surprising that policies aimed at accelerating deployment of broadband Internet services sparked considerable discussion in the early years of the new century. One source of concern was international statistics showing US broadband penetration (defined by some measure like percentage of households receiving broadband service) steadily dropping relative to more rapidly rising measures of broadband usage in other countries. In the 2008 presidential election, broadband was back as a policy issue, and a modest national program of investments to improve broadband access in the United States is one element of the stimulus package crafted in response to the current economic downturn. In some respects the entire discussion seems oddly out of sync. The conventional wisdom was that virtually all areas in the United States now have the dete r mi n an ts o f d i s co n n e cte d n e s s 159 broadband available. Statistics gathered by the FCC seemed to show that since 2005 (when data collection was improved; more on this below), at least 99 percent of US postal codes, containing in excess of 99 percent of the US population, have at least one broadband service provider serving that area.2 In its Fifth Report on Advanced Telecommunications, the FCC noted that: Further, as of June 2007, only 0.1 percent of zip codes in the United States reported no high-speed lines, compared to 6.8 percent of zip codes with no reported lines in December 2003. The percent of zip codes reporting four or more providers of high-speed lines also has increased, from 46.3 percent in December 2003 to 88.5 percent in June 2007. While we recognize that the presence of reported lines in a zip code does not necessarily mean service is available throughout a zip code, these figures do provide evidence that broadband deployment is increasing over time.3 The Fifth Report goes on to say that “most households in the United States have access to both DSL and cable modem services.”4 Furthermore, the data released by the FCC, covering the period ending in June 2008, show highspeed service being provided in every single zip code in the United States!5 Nonetheless, not all indicators point to pervasive access to broadband in the United States. Survey data gathered by the Pew Internet and American Life Project are the basis for an estimate that 63 percent of US adults lived in homes with access to broadband Internet connections in April 2009, up from 30 percent in March 2005.6 But at the national level, the rate of increase in home broadband usage seems to have generally slowed after March 2005 (see Figure 10-1). And at least some anecdotal evidence suggests that pockets of the population continue to live in areas without affordable access to broadband,7 and that the “disconnectedness” of these areas creates a persistent political, economic, and social problems.8 But aside from these isolated pockets of disconnectedness, should the apparent ubiquity of broadband service lead us to then conclude that the slowdown in diffusion of broadband Internet services into Americans’ homes is not due to lags in deployment by providers? If so, the forces driving slower rates of diffusion in US broadband use lie elsewhere—perhaps reflecting the pricing and quality strategies of those providing the service, a lack of interest on the part of US consumers, or even a failure in providing support for public infrastructure by government, compared with our global competitors. All may not, however, be quite as it seems. For one thing, the FCC data cited in constructing this argument may not accurately portray the availability of broadband to individual households. One purpose of this chapter is to critically evaluate whether this is the case. [3...

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