Broadband for All PPIC July 2007

8/9/2019 Broadband for All PPIC July 2007

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Public Policy Institute ofCalifornia

California Economic

Policy is a series

analyzing and discussing

policy issues affecting

the California economy.

Ellen Hanak, editor Volume 3, Number 2 nJuly 2007

CEP California Economic Policy

Nea ha Caiia hehd have badbad (highpeed) Iteet acce. Badbad i me wide avaiabei highe-icme ad highe-deit aea, ad thee aeage gap i acce betwee the baized cata egi Caiia ad the me a iad

aea. Dieece i badbad adpti ate betwee dieet acia ad ethic gp ae a

igicat, athgh me thee ae de t dieet ate cmpte wehip.

The techica eate badbad, icdig the cae ecmie i pvidig badbad

iatcte, make me egi Caiia me ptabe t eve tha the, eadig

t gap i avaiabiit. Eve whee badbad i avaiabe, the ct evice, a we a the

ct cmpte hadwae, et i highe ate adpti me tha the. Hwevethee gap ae had t meae. Thi ie California Economic Policy aee the extet

ieqaitie i badbad adpti ad avaiabiit i Caiia, ig a ivative methd

t meae it avaiabiit.

A eve gvemetedea, tate, ad cahave picie t make badbad me

wide avaiabe: Picmake hpe t aie the vea eve adpti ad t ce the gap

betwee the wh have acce ad the wh d t. Thi ept eview the pic appache

that Caiia ad it citie ae takig t aie badbad adpti ad avaiabiit, icd

ig ca et t pvide micipa Wi-Fi (wiee badbad). It ccde that badbad

pic i Caiia hd c iceaig avaiabiit i a aea ad hepig aie

adpti ate amg diadvataged gp i ba aea.

Broadband for All?Gaps in Californias Broadband Adoption and Availability

ByJedKolko

S UMMA R Y


2/242 P u B l I C P o l I C y I n s T I T u T E o F C A l I F o r n I A

California Economic Policy

Broadband for All?

me avaiabe t biee ecage jb gwth

iceae pt, aie pdctivit? De mak

ig badbad me avaiabe t pbic wke

we cime ate impve emegec epe?The awe t thee eetia qeti ae age

kw, ad academic eeach i begiig

t appach them.

nethee, thee ae evea cget ag-

met the ppiti that gvemet hd

be ivved i aiig badbad avaiabiit ad

adpti ad thati the abece gvemet

ivvemetbadbad e cd be bew a

cia ptima eve. o the pp ide, bad-

bad pvii ivve high xed ct, epecia

i a aea; i pvide wee t pead the xedct pvii amg bcibe, pice wd

be abve magia ct ad t ew pepe wd

adpt. Ftheme, badbad i mt eciet

pvided ig pbic wed ece: Digita

bcibe ie (Dsl) ad cabe ie w exit

ig ight--wa, ad wiee etwk ivve

itig ateae pbic ppet. o the demad

ide, thee might be pitive exteaitie i bad

bad adpti, that the beet t ciet

mee adptig badbad exceed idivida

beet. A, badbad adpti ecage me

ie behavi, ch a kig p medica i-

mati, eadig t bette heath tcmeme-

thig mt cietie cide t be a pbic beet

Fia, biee ma be daw t pace whee

badbad i me wide avaiabe, bth bet

te iatcte ad a wkce that i me

techgica iteate, gvemet cide

badbad t be a ecmic devepmet t.2

The t ecti thi ept eview the di

eet apect the tem digita divide. The

ecd ecti expai the ecmic bad

bad ad the techica eate that cd ead t

gegaphic dieece i avaiabiit. The thid

ecti tie cet badbad pic at the

edea, tate, ad ca eve. The th expai

a ateative appach t meaig badbad

avaiabiit: Thi ivve ieig avaiabiit

m adpti patte d i a patica ich

dataet, ad it vecme imptat htcmig

Introduction

Caiia picmake bth ca ad at

the tate eve ae detakig meiitiative t aie the eve eidetia

badbad Iteet adpti i the tate. Thgh

egati, bidie, ad diect pvii, tate

ad ca gvemet eek t make badbad

me wide avaiabe ad, whee avaiabe, t aie

adpti ate amg gp e ike t have

acce. Hweve, i tig t vecme thee gap

i avaiabiit ad adpti, picmake ack cea

imati abt wh i Caiia ha acce t

badbad ad wh ca get it. I act, the

cmpeheive meae avaiabiit wide edb picmake i fawed ad cetai vetate

the eve badbad avaiabiit i the tate.

Thi ept e a ateative meae t

ae the extet badbad avaiabiit, adp-

ti, ad the digita divide withi Caiia. It

eek t awe the wig qeti:

De Caiia ead ag the ct i

badbad adpti?1

Ae thee ieqaitie i badbad avaiabi-

it withi Caiia?

Ae thee ieqaitie i adpti withi Cai-ia ad, i , ae ch ieqaitie me

pced badbad adpti cm-

pte wehip?

Wh hd vecmig a badbad digita

divide, aiig the eve badbad adpti,

be a pic ga? n e age

that gvemet hd bt

wehip the techgie

ch a DVD pae ad digita

camea. The dieece i that

badbad acce (ad Iteet

acce geea) i beieved t

give cia ecmic beet

that ae i the pbic iteet. Bt

de makig badbad me

avaiabe t eidet impve

heath tcme, we em-

pmet, impve jb qa-

it? De makig badbad

Through regulation,

subsidies, and direct

provision, state and localgovernments seek to

make broadband more

widely available and,

where available, to raise

adoption rates among

groups less likely to have

access.


3/24 P u B l I C P o l I C y I n s T I T u T E o F C A l I F o r n I A 3


Broadband for All?

i the meae badbad avaiabiit tadi-

tia ed i pic aai. The th ecti

peet dig abt badbad avaiabiit ad

adpti i Caiia. The a ecti daw

cci ad gget ce acti.

Gaps in Broadband Availabilityand Adoption

Ageea deiti the digita divide i

that it i the gap epaatig the idi-

vida wh have acce t ew m

imati techg m the wh d t.4

The digita divide ecmpae dipaitie i avai-

abiit, i adpti, ad i cmpemeta ki,

a which ca timate ctibte t dipai-

Text Box 1. Should We Care About Closing the Digital Divide?

Some research has ound positive eects o Internet usegenerally, although not broadband specically, on social

and economic outcomes. For example, using the Inter-

net to get vehicle price inormation lowers costs to con-

sumers by around 2 percent; urthermore, online vehicle

price inormation eliminates the price premium that racial

minorities pay ofine or new cars (see Morton, Zettel-

meyer, and Silva-Risso, 2001, 2003). A separate study nds

that home computer adoption is greater among people

whose amily or riends are more likely to use computers

and, specically, email. This nding suggests that Internet

use oers a positive externality, which although not a parto the public debate about broadband policy, is the kind

o justication or public spending that economists nd

compelling (see Goolsbee and Klenow, 2002).

Other research, however, nds that the Internet does

not necessarily lower consumer prices or even benet its

users. Average online book prices are no lower than in tra-

ditional bookstores, and online sellers exhibit signicant

dispersion associated with dierentiated strategies (see

Clay et al., 2002). Job searchers who use the Internet do

not have shorter unemployment durations than searchers

who do not (see Kuhn and Skuterud, 2004).

A companion study (Kolko, 2007) looks at howbroadband adoption changes online behaviorsit has

a positive and signicant eect on downloading music,

purchasing, visiting adult sites, and researching medica-

tions and medical conditions. Adopting broadband has

no statistically signicant e ect, however, on visiting job

or government sitestwo o the many goals that govern-

ments regularly hope or when considering municipal

wireless initiatives.

Some studies have attempted to measure the aggre-

gate economic eect o higher broadband adoption,

ocusing on the eect o wider broadband deployment

on job growth (especially in telecom industries respon-

sible or building the inrastructure), cost savings rom

increased business eciency, and the increase in con-

sumer well-being. Estimates o the economic benet

o broadband are highly sensitive to methodology and

assumptions: One studys estimates range rom $32 bil-

lion to $350 billion per year in consumer surplus nation-

ally, depending on assumptions about the shape o the

demand curve (Criterion Economics, 2003).3

tie i hw mch beet idi-

vida get m imati

techg. Ftheme, the

digita divide ca ee t a wide

age imati tech-

gie. Thi ept ce the

digita divide i badbad, ad

thi ecti decibe hw avai-

abiit, adpti, ad cmpemeta ki c-

tibte t the badbad digita divide. Thi ept

a cide the digita divide i Iteet acce

geea, which badbad i e apect, ad

cmpte wehip, which i mt pepe a

peeqiite adptig badbad.

The t dividethat avaiabiitmea

that techgie ae avaiabe me pepe

ad t the. We dic bew wh badbad

Why should overcoming

a broadband digital

divide, or raising the level

o broadband adoption,

be a policy goal?


4/24

cd be me wide avaiabe i ba aea tha

i a aea, ad i iche aea tha i pe

aea.

The ecd digita divide ee t eve adp-ti, which ca a die ac gp. riche

pepe have highe ate badbad adpti

tha pe pepe d. That the ich have me i

t piig, bt thee ae tw imptat eated

eeach qeti abt badbad adpti that

emai t be aweed. Fit, d ace ad ethicit

ifece techg adpti,

ate dieece i icme ad

the act ae cted ?

I , pehap that efect acia

ieqaitie i techg ite-ac that pic cd hep ve-

cme. Meve, eeach g-

get that diadvataged gp

ca beet dipptiate

m Iteet acce, tagetig

badbad pic t aie adp-

ti ate amg thee gp

cd be epecia deiabe.5

secd, hw mch de icme

matte badbad adpti i cmpte we-

hip i hed ctat? I icme aect cmpte

wehip me tha it aect badbad adp-

ti, the makig badbad e expeive ad

me wide avaiabe wd have itte eect

it adpti e thee wee a et t aie

cmpte wehip eve amg we-icme

pepe.

The thid digita divide cce gap i ki

cmpemeta t imati techgie; thi

i te eeed t a techg iteac f-

ec. Pepe have dieet eve kwedge

ad cmt with techgie, ad eve givig

awa badbad ad cmpte wd t make

the beet imati techg acceibe

t a i the ecipiet ack kwedge ad amiia-

it with it. Cmpemeta ki ae t imited t

techica kwedge ad cmt eve with had-

wae. Tw pepe eqa amiia with techg

might t eap the ame beet m a Iteet

cecti i the have dieet abiitie t te


Broadband for All?

4 P u B l I C P o l I C y I n s T I T u T E o F C A l I F o r n I A

imatie might kw which ite e

eiabe ad ttwth medica advice bt the

the, eachig the ame imati, might

cick the t viibe ped ik ad widp i the had a qack. sch gap i cmpe-

meta ki might might t maiet them

eve i adpti eve. It cd be that pepe

wh ae e techg iteate have we demad

badbad a a ceqece. Ateative, it

cd be that pepe ackig cmpemeta ki

ae e ike t adpt badbad bt beet

e m thei badbad acce tha the with

bette ki.

Broadband Economics

The Iteet iatcte cit

tamii te, which icde be-

ptic cabe, caxia cabe, cppe wiig

ad wiee ik; the iatcte a icde

cecti pit, whee data ae haded m

e te t athe. A aag with ad i e-

: The Iteet backbe i a etwk high-

capacit be-ptic cabe (ike itetate high-

wa), which cect t we-capacit te (ike

mae highwa), which i t cect t at-

mie etwk (ike ca ad) that ead diect

t eidece.

The Fedea Cmmicati Cmmii

(FCC) dee badbad a a Iteet evice

that e peed at eat 200 kibit pe ecd

(kbp) i at eat e diecti. Mt eidetia

badbad evice tda e peed igicat

ate tha thi, tpica i the age 1.5 mega

bit pe ecd (Mbp: A megabit eqa 1,000

kbp) t 6.0 Mbp dwteam (i.e., data fw-

ig m the Iteet t a ed-e, ike a mic

dwad). upteam (i.e., data fwig m a

ed-e t the Iteet, ch a a et emai a

each eqet) peed ae tpica we, i the

age 384 kbp t 1.5 Mbp. B cmpai,

tp dwteam peed ve a dia-p mdem ae

56 kbp 1/100th a at a the tp the

age badbad.6

People have dierent

levels o knowledge andcomort with technolo-

gies, and so even giving

away broadband and

computers would not

make the benefts o

inormation technology

accessible to all.


5/24 P u B l I C P o l I C y I n s T I T u T E o F C A l I F o r n I A 5


Broadband for All?

The tw pima eidetia badbad tech-

gie ae Dsl ad cabe.7 Bth ae at-mie

techgie, which mea that the cect ei-

dece t the age Iteet etwk.8 Bth Dslad cabe e exitig iatcte t pvide

Iteet evice: Dsl hae the cppe wiig ed

teephe evice, ad cabe hae a hbid

be ad caxia cabe (HFC) ed cabe teevi-

i evice. T e badbad, Dsl ad cabe

pvide mt pgade thi exitig iatc-

te. upgadig ivve high iitia xed ct,

ad the techgie themeve have imitati

thei depmet (decibed bew). Becae

high xed ct ad techgica imitati,

me citie eighbhd ae me ptabe badbad pvide t eve tha the.

upgadig iatctead the eect

gegaphic avaiabiitae dieet Dsl

ad cabe.9 Dsl e exitig teephe cp-

pe wiig mea that it i a dedicated eviceit

diect m the eidece t the evice p-

vide ad i t haed with a the eidece.

Becae Dsl techg ca tamit data eve

whe the ie i a i e a teephe ca,

Dsl pvide a awa- Iteet cecti.

T e Dsl, teephe cmpaie mt ita

DslAM (digita bcibe ie acce mtipexe)

eqipmet that aggegate Iteet data m the

evice aea ad wad it t the age high-

wa the Iteet. Dsl wk withi thee

mie a teephe cmpa ceta ce. Whee

pvide e mtipe tie Dsl evice (ch

a 1.5, 3.0, ad 6.0 Mbp), the ate tie might

be avaiabe t eidece ce t the ce-

ta ce. The pevaece teephe cmpa

ceta ce deped ppati deit.

lage citie have mtipe ceta ce ad e-

dee aea have a ewe pe qae mie; thi

ae make Dsl me wide avaiabe i highe-

deit aea. Ateative, Dsl achitecte ca

cit a cppe cecti m a eidece

t a itemediate de, caed a teet cabiet,

which i cected with be t the ceta ce.

B itaig teet cabiet, teephe pvide

ca e Dsl evice t aea athe tha thee

mie m a ceta ce.10 AT&T ad Veiz

ae the mai pvide Dsl evice i the uited

state, with AT&T dmiat i Caiia.

Cabe iatcte cit a head-ed,which wad ca Iteet tac t the wide

Iteet ad eve thad hme, ad pti-

ca de, which ae cected t the head-ed

with be-ptic cabe ad t eidece with cax-

ia cabe. The caxia cabe i the ame iatc-

te that deive cabe teevii evice. T p-

vide badbad, cabe teevii pvide pgade

thei etwk b addig de ad mvig them

ce t eidece, which i eect epace me

the caxia cabe i the etwk with be.

Cabe cmpaie a have t ita eqipmet(aag t the teephe DslAM) that te

ad witch digita data, ad the ita ampi-

e that impve the pteam data tamii.11

uike Dsl, cabe iatcte i haed: The

caxia cabe cect eidece t the ptica

de i a p, that the badwidth a ei-

dece eceive deped i pat the mbe

eidece haig the de. Th, the ca xed

ct pgadig a aea iatcte t make

cabe badbad avaiabe ca ivve (1) mvig

ptica de ce t eidece, (2) bidig ew

ptica de, (3) pgadig the pteam path,

ad (4) itaig eqipmet at the head-ed.12

Cmcat ad Time Wae ae the mai pvide

cabe badbad evice i Caiia.

Thee xed ct mea that cabe ad Dsl

ae me ptabe i aea whee the ct ca

be pead ve me bcib-

e. Aea that ae highe de-

it highe icme bth

ted t be me ptabe.

I a highe-icme eighb-

hd, me eidet ae ike

t adpt badbad, pvid-

e eekig t make badbad

avaiabe i the mt ptabe

aea t wd che highe-

icme aea; thi eect i mag-

ied cabe pvide, ice pgadig thei

etwk e ew ptetia evee m bth

Because o high fxed

costs and technological

limitations, some cities

or neighborhoods

are more proftable or

broadband providers

to serve than others.


6/24

badbad ad digita teevii evice. High-

deit eighbhd ae t me ike t

be withi thee mie a teephe ceta ce

Dsl evice, the a ca be eved at weitaati ct pe bcibe.13

F a thee ea, badbad avaiabi-

it hd die gegaphica accdig t ave-

age icme ad deit. Thee might a be ge-

gaphic dieece i avaiabiit that ae iqe

t a patica pvide: Mt aea i the uited

state ae eved b a dmiat teephe p-

vide ad a dmiat cabe pvide, ad each ca

make dieet tategic decii abt whe t

itdce badbad evice t thei egi. The

age ad phica cditi exitig teephe cabe iatcte ca a aect the ct

itdcig badbad.

I additi t thee tw wieie techgie,

tw wiee badbad techgie ae begi-

ig t be ed.14 oe i ateite, which athgh

avaiabe ea evewhee i

the uited state, e a we

peed ad we eiabiit

a highe mth pice tha

eithe cabe Dsl.15 I pac-

tice, ateite badbad appea

t cme whee Dsl

ad cabe ae avaiabe ad

de t acta cmpete with

them.16 The the wiee badbad techg

i Wi-Fi (the techica tem i 802.11x), which

e high peed withi a ve ht ditace a

bae tati. Wi-Fi i cmm ed i cjc-

ti with Dsl cabe t make badbad acce

avaiabe wiee withi a hme, ce, ca,

pbic pace. The ct ettig p bae tati

ad atea t pvide Wi-Fi cveage i mch

we tha pgadig bidig wieie ia-

tcte ch a Dsl, cabe, be-t-the-hme

(FTTH). I a had cati, Wi-Fi e

citwide pbic acce t the Iteet ad acta

cmpete with cabe ad Dsl. Thi ew wave

micipa Wi-Fi iitiative i diced bew a a

exampe badbad pic.


Broadband for All?


Current Broadband PoliciesFederal, State, Local

Fedea, tate, ad ca gvemet a paa e i hapig the avaiabiit ad adp-

ti badbad. The edea gvemet

thgh Cge, the exective, ad the speme

Ct, make the mt imptat egat deci

i, wheea tate ad ca gvemet pa a

age e i bidizig ad i me cae diect

pvidig badbad evice.

At the edea eve, the FCC egate tee

cmmicati. The 1996 Teecmmicati

Act, the 2005 speme Ct decii i Nationa

Cable & Telecommunications Association et al. vBrand X Internet Services et al., ad eated FCC

ig have ceated the egat amewk that

exit tda. ude thi amewk, teephe

wiee, teevii, ad Iteet pvide ae

abe t cmpete i a maket agait a the

(FCC web ite), bt badbad pvide ae t

eqied t give cmpetit wheae acce t

thei iatcte that cmpetit ca ee

evice t cme.17 The FCC a hape

badbad pic b pacig cditi meg-

e betwee badbad pvide ad b acatig

wiee pectm.18 Fia, the FCC admiite

the ivea evice eqiemet, which gaa

tee that eve the mt emte aea have teephe

evice.19

state ad ca gvemet ae ti et with

imptat eemet badbad egati, e

beig ct the phica devepmet ia-

tcte. Badbad etwk tpica w

pbic ight--wa ch a ad ai tack

ad depig badbad iatcte ct

pvide e whe it cc i tadem with pb-

ic wk pject whe de imtae

b mtipe badbad pvide. I Caiia

impvig ight--wa acce badbad

depmet i the mt pmiet eemet

Gve Ad schwazeegge 2006 Exec-

tive ode Expadig Badbad Acce ad

uage i Caiia, which ceated a Caiia

Federal, state, and

local governments all

play a role in shapingthe availability and

adoption o broadband.


7/24


Broadband for All?

P u B l I C P o l I C y I n s T I T u T E o F C A l I F o r n I A 7

Text Box 2. Will New Internet Access Technologies Overcome the Digital Divide?

The economics o DSL and cable result in greater geographicdierences in availability than those o dial-up access do.

Will the next generation o technologies have the same

eect or will they widen or narrow the digital divide?

The most promising next-wave broadband technol-

ogies are FTTH and WiMax.20 FTTH extends ber-optic

cablewhich already connects the Internet all the way to

the telephone company central oces and the cable pro-

viders optical nodesthe rest o the way to homes. Fiber

would, in eect, replace the copper wiring and coaxial

cable in use today. Because the capacity o ber is ar

greater than that o either copper or coaxial cable, userswould access much higher speeds downstream and

upstreampotentially into the gigabit-per-second (gbps)

range, hundreds o times aster than todays astest cable

or DSL services.21

Recent policy reorms at the state and ederal levels

have reduced some o the regulatory challenges to deliv-

ering cable television and these give telephone companies

a stronger incentive to build FTTH networks.22 Telephone

companies are interested in FTTH as much or its abil-

ity to deliver television service as to deliver high-speed

Internet service; this is so that they can compete ully

with cable providers, who can oer television, Internet,

and telephony (using voice-over-IP [Internet protocol])

over their existing networks.23 However, current adoption

in Caliornia is minimal. SureWest, a regional telecom

service provider, has over 20,000 FTTH subscribers in

the Sacramento area.24 AT&T, the dominant local phone

provider, has not announced plans or any major FTTH

deployment.

Fiber costs more than DSL or cable, and it requires

replacement o the existing connections to customers

homes, so its roll-out proceeds neighborhood by neighbor-

hood. Multiunit dwellings, dense areas, and new develop-ments cost less to wire with ber than other areas, so there

is a strong possibility o a uture, persistent digital dividein FTTH availability; at least as important is that only some

telecom companies are considering FTTH. In act, a study

prepared or San Franciscos evaluation o the easibility

o a municipally built, owned, and operated ber-optic

network argues that the city is already on the losing side

o the FTTH digital divide because Verizon, the company

deploying most large FTTH projects in the country, is not

the dominant telephone provider in San Francisco.25

The other promising next-wave technology is WiMax,

a wireless technology. WiMax oers Internet connectiv-

ity over a range o one to 30 miles rom a transmissiontower; this compares to the hundreds o eet that are Wi-

Fis limit. The downstream and upstream bandwidth o

WiMax depends on the number o simultaneous users,

but speeds could rival those o DSL and cable. WiMax is

not yet being used or broad-based Internet access. Theo-

retically, the xed costs o WiMax deployment should be

much lower per subscriber than costs or wireline tech-

nologies, because the inrastructure consists o widely

spaced antennas, not extensive wiring. The wide range

o WiMax signals could also bring high-speed service to

harder-to-reach rural areas.

Next-wave technologies are no guarantee o over-

coming todays digital divide. In act , the high xed costs

o FTTH make it likely that some areas will receive ser-

vice long ater others do. Furthermore, with the devel-

opment o aster access technologies, expectations

about adequate service ratchet upward. This is not only

because the digital divide reers to relative dierences,

not absolute levels. It is also because online applications

are designed or users current bandwidth; as typical resi-

dential bandwidth increases, online applications incorpo-

rate more bandwidth-hungry content (such as video and

interactivity), and access technologies that were onceadequate cease to be so.


8/24


Broadband for All?


siic Vae. Maj iitiative ae de egtia

ti sa Facic, the geate sacamet

egi, ad a siic Vaewide etwk; l

Agee ha a aced a citwide iitiative.3

Mt thee ca w-ct ee wiee

acce, pvided b pate ch a Gge, Eath

lik, ad MetFi, ppted b bcipti

advetiig, with itte acia ivetmet b the

pbic ect. o the 58 iitiative, a bt ae

i dee ppated aea the Ba Aea, sth-

e Caiia, geate sacamet. Text bx 3

pvide me detai the jticati ad cha-

ege micipa wiee.

Caiia badbad pic ca be mmed

p a w: Fit, bidie c me iti-ttia acce t badbad tha eidetia acce

t badbad. secd, micipa Wi-Fi iitiative

ae widepead ad ae ccetated i the dee

ppated pat the tate. Thid, pic i geaed

twad badbad acce, t cmpte wehip.

Measuring Broadband

Tig t meae the extet the digita

divide i chaegig. Pbic avaiabehehd ve badbad adp-

ti, Iteet acce, ad cmpte wehip ae

iadeqate tdig ecet ted i Cai-

ia. F exampe, the edea Current Population

Survey at icded techg qeti i 2003

ad thee ae pa t d agai. The Pew

Iteet & Ameica lie Pject ve he-

hd abt techg adpti aa

me eqet, bt with 4,000 epdet

atia, the ampe i t ma t daw c-

ci abt Caiia.32 A ppieta ve

the Techgaphic Bechmak cdcted b F

ete, a techg eeach ad ctig m

i ed thi aai. Fete aa ve

60,000100,000 hehd abt thei tech-

g adpti ad behavi.33

Meaig the divide i badbad avaiabi-

it i me chaegig tha meaig badbad

adpti. Badbad pvide teat evice avai

Badbad Tak Fce cmped pbic ad

pivate takehde t cdiate et t aie

badbad adpti ad ideti wa t d ew

techg ivetmet.26state ad caitie a pa a age e

thgh bidizig ad diect pvidig bad-

bad. Caiia pima badbad bid

pgam i the Teecect Fd, which pa ha

the ct Iteet acce qaied ch,

ibaie, cmmit gaizati, ad the

pt. Fded m a tatewide ee tee-

phe evice, the d 20062007 ca ea

bdget i $22 mii.27 I additi, the Cai-

ia Pbic utiitie Cmmii (CPuC) ecet

ceated the Caiia Emegig Techg Fd,a idepedet pt dati t be ded

with $60 mii ve ve ea m AT&T ad

Veiz a cditi thei epective mege

with sBC ad MCI. The d mii i achiev-

ig biqit acce t badbad ad advaced

evice i Caiia, patica i deeved

cmmitie thgh the e exitig ad emeg-

ig techgie, athgh pecic tategie have

t et bee eected.28

Wheea tate gvemet have ced

bidie t ecage adpti, me ad me

caitie ae attemptig t pvide badbad

diect, bth b themeve ad i patehip

with pivate cmpaie. I the

ate 1990, a ew caitie ac

the ct bit be-ptic et-

wk.29 Thee ea pject

te ivved pbic we-

hip etwk ad wee i

diect epe t the peceived

ack evice pvii b the

phe ad cabe cmpaie.30 I

the pat cpe ea, ma

caitie have ted t Wi-Fi a

a wiee tadad ad a wa t

big badbad evice at w

ct t a wide aea. I Ca-

iia, 58 caitie have Wi-Fi iitiative de

wa. sevice i peatia i Aaheim, the sa

Dieg Ct tiba ati, ad evea citie i

Whereas state govern-

ments have ocused on

subsidies to encourage

adoption, more and more

localities are attempting

to provide broadband

directly, both by them-

selves and in partnership

with private companies.


9/24


Broadband for All?


Text Box 3. Local Wi-Fi Initiatives

As o early 2007, numerous localities are developingwireless broadband networks using Wi-Fi technology to

serve entire regions. In contrast to earlier eorts, most

municipal Wi-Fi plans and deployments today call or at

least partial ownership and operation by the private sec-

tor. So phone and cable companies, ater ghting earlier

attempts at direct public provision, are instead partner-

ing with local governments.34 The best-known are in Phil-

adelphia, where a wireless network run by EarthLink is

operational, and in San Francisco, which is still negotiat-

ing with EarthLink and Google; across the country there

are hundreds o others under way. 35

Many arguments over municipal wireless rest on

technical issues specic to Wi-Fi, which was not designed

to provide citywide coverage but to bring it to a build-

ing, park, or other small area. Wi-Fi transmits signals

over relatively short distances (up to 30 meters indoors,

450 meters outdoors) and is the technology behind pub-

lic hotspots and home networks. Municipal networks

extend the capabilities o Wi-Fi by using multiple trans-

ceiver sites that collectively cover a large area. The rst

technical concern about Wi-Fi is that it is unclear how ar

such a Wi-Fi signal can reach indoors, and users might

need to install range-extending equipment. Second, new

wireless standards such as WiMax that can transmit sig-

nals much arther could make Wi-Fi obsolete. Third, a

citywide Wi-Fi signal could interere with existing Wi-Fi

hotspots.36

There is also controversy on social and econom-

ic grounds. In San Francisco, the partnership calls or

EarthLink to provide paid access and or Google to pro-

vide ree, advertising-supported access; Googles model,

which uses tracking cookies that customize advertising,

has raised privacy concerns.37 In some cities, the busi-

ness model itsel is being debated: Should wireless beadvertising-supported (and ree), or subscription-based,

or a hybrid?38 Some are even questioning the public-pri-

vate partnership model: as o May 2007, San Franciscos

Board o Supervisors has delayed nalizing the agree-

ment with EarthLink and Google to assess a city-owned

and -operated alternative.

Despite these controversies, there is broad consensus

that the benets o municipal Wi-Fi include (1) narrowing

the digital divide and (2) acilitating online activities that

are socially desirable or economically productive. Large

cities such as Philadelphia and San Francisco ocus most

on the digital divide among residents and on bringing

ree or low-cost access to everyone. Philadelphia, or in-

stance, negotiated with EarthLink to provide broadband

at a lower cost to lower-income residents.39 Large cities

also want to encourage socially desirable online behav-

iors related to health care, education, and employment.40

Promoters o Silicon Valleys request or proposal or a

wireless network, however, emphasize the digital divide

among businesses. Some are out o reach o both DSL

and cable providers, they argue, and desirable online

activities include those that improve business develop-

ment, government services, and public saety.41

Still unknown is how much demand there is among

residents, businesses, and visitors or municipal Wi-Fi.

Municipal Wi-Fi competes with existing xed-wire con-

nections in homes and workplaces; it also competes with

data services oered by mobile phone providers, which

oer Internet connectivity to mobile phones and to spe-

cially equipped laptops. Taipei has one o the worlds most

extensive wireless networks, reaching 90 percent o the

citys 2.6 million people, but six months ater its launch in

early 2006, only 40,000 residents had subscribed.42


10/24


Broadband for All?


abiit map a eitive cmpetitive imati,

ad egat have t eqied that pvid-

e make thee map pbic. Athgh idivida

cme ca check avaiabiit at a idividaadde mt pvide web ite, aecdta

evidece gget that thi imati i te

iaccate icmpete.43

The wide ed data badbad avai-

abiit cme m FCC ve badbad p-

vide. The FCC pbihe a ct the mbe

pvide with at eat e bcibe i each

zip cde atia.44 Thi methd vetate the

eve avaiabiit becae badbad ma be

avaiabe i me pat a zip cde. uig

thi meae cd a de-tate gegaphic dieece i

badbad avaiabiit i pvid-

e make badbad avaiabe

i iche dee pti

a zip cde. recet FCC data

gget impaib high eve

badbad avaiabiit, e-

deig the data mieadig

aeig the digita divide. The

FCC ept that i Decembe

2005, 99.8 pecet the u.s.

ppati ived i a zip cde

whee badbad wa avaiabe (ee Tabe 1). I the

mt pae ppated teth zip cde, 96.2

pecet the ppati ived i zip cde whee

badbad wa avaiabe, ad i the pet teth zip cde, 99.4 pecet the ppati ived i

zip cde whee badbad wa avaiabe.

nevethee, thee FCC data ae the bai

mt pic tdie ad academic wk abt

badbad avaiabiit. I it mt ecet ept

badbad depmet i the uited state i 2004

the FCC ccde that badbad i ea ive-

a avaiabe i ba aea ad igicat pg

e i beig made twad biqit avaiabiit

advaced evice i a aea.45 The Caiia

Pbic utiitie Cmmii (2006) a eie the FCC zip cde data it map badbad

avaiabiit, which hw at eat e badbad p

vide eig evice i eve zip cde i Cai-

ia.46 sevea academic tdie e the FCC data

a we, athgh e te that the FCC ct

high peed ie pvide withi a zip cde ma ei-

miepeet cmpetitive pti avaiabe t

the ttait eidet withi that zip cde [bt

thee i pactica ateative t ig the FCC

data i aeig badbad avaiabiit.47

rathe tha e FCC data, thi aa-

i ie badbad avaiabiit b examiig

Table 1. U.S. Broadband Availability, FCC Measure

Population in Zip Codeswith At Least One

High-Speed Subscribera (%)

Population oLowest-DensityZip Codes

(bottom decile) in Zip Codeswith At Least One

High-Speed Subscriber (%)

Population oLowest-IncomeZip Codes

(bottom-decile) in Zip Codeswith At Least One

High-Speed Subscriber (%)

December 2000 96.4 49.9 91.5

December 2001 97.8b 67.9 95.1

December 2002 99.1 80.9 97.5

December 2003 99.5 88.9 98.6

December 2004 99.6 91.8 99.0

December 2005 99.8 96.2 99.4

sce: Fedea Cmmicati Cmmii (2006), Tabe 18 ad 19.aBaed FCC data ad the ath cacati.

bCmpaed t a ie Fete ve i atm 2001, i which 64 pecet ie epdet epted badbad avaiabiit

whee the ive.

Rather than rely on FCC

data, this analysis iners

broadband availability by

examining the relation-

ship between location

and broadband adoption

at the individual level,

controlling or numerousindividual characteristics.


11/24

gwth i badbad adpti i t et eveig

. Thght thi peid, the eve badbad

adpti i Caiia ha bee abve the atia

ate. Mt ecet, 47 pecet Caiia he-

hd had badbad, eight pit highe tha the

vea atia eve.

Thee ae evea pibe expaati thi.

oe i that Caiia eidet have me av-

abe demgaphic badbad adptithat

i, the ae iche, me edcated, ad tha

Ameica geea, ad thee demgaphic act

ifece badbad adpti. A ecd pibiit

i that badbad i me wide

avaiabe i Caiia becae

the deit ppati ad

icme eve make it me p-

itabe t e badbad hee

tha eewhee i the ct. A

thid pibiit i that athe

Caiia-pecic actch

a tate picie decii b

AT&T, the dmiat ca tee-

phe pvide i Caiiactibted t ate

depmet ad theee highe adpti. Thee

thee pibiitie ae t mta excive.


Broadband for All?


Looking just at the

68 percent o U.S. house-holds with Internet

access (broadband or

dial-up) at home, more

than hal have broadband.

the eatihip betwee cati ad badbad

adpti at the idivida eve, ctig

me idivida chaacteitic.48 Thi tech-

iqe, i eece, cmpae pepe wh ae ideti-ca i bevabe demgaphic, ch a icme,

age, edcati, ize hehd, age chide,

ad , bt wh ive i dieet tpe zip

cde exampe, a midde-icme ba zip

cde ad a midde-icme a zip cde.49 Becae

thei idivida demgaphic ae the ame, the

ae amed t have imia deig demad

badbad, ad a dieece i whethe the

acta have badbad i itepeted a a die-

ece i the avaiabiit badbad i the die-

et tpe zip cde.50 The ke cati chaac-teitic ae zip cde g media hehd icme

ad zip cde g ppati deit.51

Meaig the digita divide i cmpemeta

ki peet the dictie. se-pecepti

ki ae hade t eicit ad itepet, eeach

cmpemeta ki te eie diect be-

vati ad abiit tetig, which i expeive t

cdct a age cae. Ftheme, a tech-

g chage, patica ki ie a i imp-

tace, makig meaemet ad itepetati eve

me dict.52 n d a the mai data ce

acce avaiabiit, icdig Fete, icit

detaied imati cmpemeta ki,

thi apect the digita divide i bed the cpe

thi ept.

Broadband Availability andAdoption in Caliornia

O t eeach qeti i whethe Cai-

ia ead ag the ati i bad-

bad adpti. natia, eidetia

badbad adpti ha gw apid, m 7

pecet hehd at the ed 2000 t 39 pe-

cet i 2005 (ee Fige 1).53 lkig jt at the

68 pecet u.s. hehd with Iteet acce

(badbad dia-p) at hme, me tha ha

have badbad. Dig 2005, badbad adp-

ti gew m 28 pecet t 39 pecet, the

Figure 1. Broadband Adoption in the United States and California

Source: Forrester Research and authors calculationsNote: Data based on survey conducted by mail in English only.

Percentage

20042003200220012000 2005

45

40

35

30

25

20

15

10

5

50

0

California

United States

47%

39%

10%7%

15%

18%

28%

10%

12%

17%

23%

24%


12/24


Broadband for All?


The results o this

analysis suggest that

about hal o the

gap between broadband

adoption in Caliornia

and that in the rest othe nation is due to

Caliornias avorable

individual demographics.

T ae the imptace each, egei aa-

i ca ideti the epaate eatihip idivid-

a demgaphic ad cati chaacteitic ch

a eighbhd icme ad deit badbadadpti. The et thi aai gget that

abt ha the gap betwee badbad adpti

i Caiia ad that i the et

the ati i de t Caiia

avabe idivida demgaph-

ic.54 lcati chaacteitic that

aect pvide decii t make

badbad avaiabeeighb-

hd icme ad ppati de-

itacct the the ha

the gap.55 Becae idividademgaphic ad cati cha-

acteitic acct the etie

dieece betwee badbad

adpti i Caiia ad that i

the et the ct, we ie that the act

iqe t Caiia did t cective chage the

eve badbad adpti.56

The ecd eeach qeti i whethe thee

ae ieqaitie i badbad avaiabiit withi

Caiia. A ted abve, thi ept ie avai-

abiit m the eatihip betwee cati

chaacteitic ad badbad adpti. Athe

egei aai evea that badbad adp-

ti i Caiia i igicat highe i highe-

icme ad dee zip cde, eve ate ctig

idivida demgaphic.57 That i, pepe

the ame age, ace, icme, ad ae me

ike t adpt badbad i the ive i a iche

dee aea.58 The eect cati avai-

abiit mea that badbad adpti die c-

ideab ac egi withi Caiia, me

which ae mch iche ad dee tha the.

Badbad adpti age m de 30 pecet

i the th the tate ad i the siea t jt

ve 50 pecet i the Ba Aea ad geate l

Agee (ee Tabe 2).59 The dieece i Ite-

et acce (badbad ad dia-p cmbied) ad

cmpte wehip ac egi ae mae:

Iteet acce age m 61 pecet t 76 pe-

cet ad cmpte wehip age betwee

73 pecet ad 83 pecet. Me tha ha the di

eece i badbad adpti betwee egi

emai eve ate ctig idivida dem-

gaphic, ggetig that ieqaitie i badbadavaiabiit ac egi acct mch the

dieece i badbad adpti. I ctat

the dieece betwee egi i vea Iteet

acce ad cmpte wehip ae de t die-

ece i idivida demgaphic chaacteitic

ac the egi.60

The thid eeach ga i t detad the

ieqaitie i badbad adpti i Caiia

apat m avaiabiit. Athgh it i bvi (a

we cm bew) that badbad adpti ate

ae highe amg iche hehd, tw imptat qeti abt icme ad badbad adp

ti whe awe ae t bvi ae (1) d ace

ad ethicit aect badbad adpti, hdig

icme ctat, ad (2) de icme aect bad

bad adpti becae icme a aect cm-

pte wehip, which i eetia a peeqiite

badbad adpti?61

Badbad adpti, Iteet adpti, ad

cmpte wehip a va b icme i Cai-

ia. Amg hehd with icme ve

$100,000, 68 pecet have badbad, cmpaed

t 49 pecet hehd with icme betwee

$50,000 ad $75,000 ad cmpaed t 24 pecet

hehd with icme de $25,000 (ee

Tabe 3). The gap Iteet adpti (bad-

bad ad dia-p cmbied) ad cmpte we-

hip ac icme gp ae a cideabe.

lkig ac acia ad ethic gp, it i

imptat t keep i mid that Fete cdcted

thi ve i Egih . Thee data theee

epeet pepe with ve high Egih pciec

ad excde a igicat hae Caiia

Hipaic ppati.62 Dipaitie i badbad

adpti ac acia ad ethic gp ae e

wide tha ac icme gp bt the ae ti

appaet, with 46 pecet bth -Hipaic

white ad Egih-pciet Hipaic havig

badbad, cmpaed with 63 pecet Aia

Ameica ad 36 pecet Aica Amei-

ca.63 sice icme amg -Hipaic white i


13/24

Egih ad spaih, badbad adpti i 50

pecet amg Hipaic wh peak Egih a

mch me tha spaih at

hme ad epded t the -

ve i Egih. Badbad adp-

ti i 20 pecet amg

Hipaic wh peak spaih

me tha Egih at hme

epded t the ve i spa-

ih. Badbad adpti amg

a Caiia Hipaic i 29

pecet, kig at Hi-


Broadband for All?


highe tha icme amg Hipaic, ad icme

ad badbad adpti ae tg eated, wh

d bth gp have the ame eve badbad

adpti i Caiia? reative t -Hipaic

white, Hipaic aveage have age he-

hd ad ae ge, bth which ae pitive

ceated with badbad adpti.

othe eeach hw that Hipaic i Cai-

ia wh pee peakig spaih at hme have

mch we badbad adpti tha Egih-

peakig Hipaic. Accdig t the Mach 2007

PPIC statewide sve, cdcted b teephe i

Table 2. Broadband, Internet, and Computer Ownership, by Caliornia Region, 2005

Broadband (%)

Online(broadband or

dial-up) (%) Computer (%) Number

Northern Caliornia 29 63 77 161

Northern Sacramento Valley 28 69 79 163

Greater Sacramento 44 76 83 518

San Francisco Bay Area 51 74 80 1,335

Northern San Joaquin Valley 36 67 74 241

Southern San Joaquin Valley 35 64 73 387

Central Sierra 21 61 76 54

Central Coast 48 76 80 176

Greater Los Angeles 52 76 81 1,949

Inland Empire 45 73 82 660

San Diego Border 48 72 78 722

sce: Fete reeach ad the ath cacati.nte: Ctie i each egi ae ited i the web- appedix at www.ppic.g/ctet/the/707JKEP_web_appedix.pd.Data ae baed a ve cdcted b mai i Egih .

Table 3. Broadband, Internet, and Computer Ownership in Caliornia, by Income, 2005

Household Income($ 1,000s) Broadband (%)

Online (broadbandor dial-up) (%) Computer (%) Number

< 25 24 48 58 1,167

2549 40 70 77 1,573

5069 49 78 86 1,146

7099 59 87 91 1,320

100+ 68 89 93 1,382

sce: Fete reeach ad the ath cacati.nte: Data ae baed a ve cdcted b mai i Egih .

Broadband adoption

ranges rom under

30 percent in the north

o the state and in the

Sierras to just over

50 percent in the Bay Area

and greater Los Angeles.
http://www.ppic.org/content/other/707JKEP_web_appendix.pdfhttp://www.ppic.org/content/other/707JKEP_web_appendix.pdf


14/24


Broadband for All?


paic with high Egih pciec vetate the

eve badbad adpti amg Hipaic.64

Hdig the idivida demgaphic c-

tat, thee i a tatitica igicat dieece badbad adpti amg Hipaic ad

Aica Ameica eative t white. Egih-

peeig Hipaic ae 6 pecet e ike

t have badbad at hme tha -Hipaic

white; the dieece Aica Ameica i 10

pecet.65 reative t Caiia vea bad-

bad adpti 47 pecet, thee gap ae age.

Meve, Hipaic thi i the gap betwee

adpti amg -Hipaic white ad Hipa-

ic with high Egih pciec. The acia gap i

badbad adpti, hweve,cat be expaied b pvid-

e aiig t e evice i

miit eighbhd becae

thee wa tatitica igi-

cat eect the acia cmpi-

ti a zip cde badbad

adpti.

The the imptat ac-

t abt the digita divide i

badbad adpti i the e

cmpte wehip. A hme

cmpte i the mt pat

a peeqiite badbad

adpti.66 I the eatihip betwee icme ad

badbad adpti efect we cmpte w-

ehip b pe hehd, the makig bad-

bad me wide avaiabe at w ct might have

itte eect badbad adpti. lkig ac

icme gp, cmpte wehip age m

58 pecet amg hehd with icme de

$25,000 t 93 pecet amg hehd with

icme $100,000 ad abve. regei aai

hep ae hw mch thi gap i cmpte w-

ehip ctibte t the digita divide i bad-

bad adpti. Ctig the demgaph-

ic, aiig g icme b e tadad deviati

iceae the ikeihd computer ownership b

7 pecet.67 The, kig at cmpte w-

e ad agai ctig the demgaphic,

aiig icme b the ame amt iceae the

ikeihd broadband adoption b 10 pecet.6

Bth eatihip ae tatitica igicat: The

eect icme cmpte wehip mea

that thee i a digita divide i cmpte we-hip, bt the eect icme badbad amg

cmpte we mea that, eve amg cm-

pte we, thee i a digita divide i badbad

adpti.

Conclusions andRecommendations

Withi Caiia, thee ae digita

divide i bth badbad avaiabiitad badbad adpti. Badbad

i me wide avaiabe i highe-deit eide

tia aea ad ba egi tha i we-deit

aea ad a egi; the eve eighbhd

icme a aect avaiabiit. Thee ieqai-

tie aie, i pat, m the techica eate ad

ecmic eaitie badbad pvii. The

digita divide i adpti ecmpae t

badbad bt cmpte wehip a we, ad

icme ad ace ad ethicit bth aect bad-

bad adpti i Caiia.

o dig have imptat impicati

badbad pic. I cig gap i badbad

availability i a pic ga, aiig avaiabiit i

a aea hd be the tp piit. The Cai-

ia Emegig Techg Fd hd c t

depmet i a aea, ad the Badbad

Tak Fce cd hep ideti cea the baie

t pvide eig evice i a aea. Ea-

ig the acce t ight--wa might aciitate

a badbad depmet, bt the ecmic

badbad make a aea ct t eve eve

i the abece a egat pemittig ac-

t, the tate cd cide diect bidie t

pvide evig a aea. Athgh badbad

avaiabiit ag i we-icme aea a we, de

it ha a geate eect avaiabiit; theme

thee i evidece that badbad avaiabiit i

we i eighbhd with highe ccetati

Hipaic ad Aica Ameica.

Holding other individual

demographics constant . . .

English-preerring

Hispanics are 6 percent

less likely to have

broadband at home than

non-Hispanic whites;

the dierence or AricanAmericans is 10 percent.


15/24


Broadband for All?


T ce gap i badbad adoption, the c

hd be badeed t icde acia ad ethic

ad icme gp with we adpti ate,

icdig the ivig i eighbhd wheebadbad evice i aead avaiabe. Impvig

techg iteac ma a be eetia. Mici-

pa Wi-Fi iitiative wi hep meet thee ga

g a the pvide badbad at we ct tha

Dsl ad cabe pvide d. recet iitiative g-

get that the wi: Gge ppa t pvide

ee, ad-ppted evice i sa Facic, ad

the pevaiig ate abt $20 pe mth that

Eathlik chage it Wi-Fi evice, ae tw

exampe. Micipaitie eed t et t pb-

ic wehip peati Wi-Fi etwk tachieve thee pbic beet. Pbic ivvemet

hd be eeved the ivetmet that the pi-

vate ect i e ike t make, ch a hepig

aie techg iteac ad impvig cmpte

acce amg diadvataged eidet, bth

which ae amg the digita ici ga

sa Facic Wi-Fi iitiative.69

Iica, becae the Wi-Fi etwk that

ae peatia de cideati ae ve-

whemig i the ba pat the tate, the ae

ike t wide athe tha ce the gap i avai-

abiit betwee ba ad a aea. Picmak-

e, theee, hd thik e i tem cig

the gap betwee ba ad a avaiabiit, et

the hd back ba iitiative, ad me i tem

aiig the abte eve a avaiabiit.

new techgie, ch a FTTH, ae a ike

t beet ba aea me tha a aea,

the ba-a gap i ike t peit eve i pic

et cce aie the eve a bad-bad avaiabiit.

Tw bade qeti emai t be eeached

ad aweed. Fit, i it me deiabe m

a ct-beet pepective t aie the degee

badbad adpti the

with e acce tha it i t

vecme the ieqaitie that

Caiia ace? o e had,

the ecmic ad cia beet

badbad ae kw ad

ae age take a a atice aith; the the, the ct

t the pbic ect aiig

badbad adpti ca be w

i the pivate ect bea the

ct, a i the cae with mt

micipa Wi-Fi iitiative. sec-

d, wi the devepmet

te Iteet acce tech-

gie ch a WiMax FTTH

mitigate aggavate tda ieqaitie i tech-

g acce? Bth thee qeti hd be

cideedeve i the cat be aweed

a Caiia tate ad ca gvemet weigh

vai tategie aiig badbad adpti

ad cig the digita divide.v

I closing gaps in

broadband availability

is a policy goal, raising

availability in rural areasshould be the top priority

To close gaps in broad-

band adoption, the ocus

should be broadened to

include racial and ethnic

and income groups with

lower adoption rates.


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Broadband for All?


Notes1 The Caiia Pbic utiitie Cmmii (2005) citeCaiia #14 akig amg tate (accdig t the

2003 Technet ve) a a imptat idicat wheth-e the tate i maitaiig it ead i badbad age.I the Caiia Pbic utiitie Cde, the mai bad-bad pic bjective ae aig ctied adabii-t ad widepead avaiabiit badbad ad pmt-ig ecmic gwth, jb ceati, ad btatia ciabeet. It i had t ee hw the btatia cia be-et deped Caiia badbad adpti relativet that the tate, athe tha the abte eve, bt iti paibe that the eative akig cd aect ecmicgwth ad jb ceati i biee cide badbadavaiabiit ad adpti a act i decidig whee tpe, expad, mve thei peati.

2 o imited eeach ha bee cmpeted the eect

badbad. A veview the academic iteate the eect badbad ad Iteet age i peeted iText Bx 1.

3 Caiia Pbic utiitie Cmmii (2005) mmaizeevea tdie badbad ad ecmic devepmet.

4 Gke (2003).

5 see Mt, Zettemee, ad siva-ri (2003).

6 Dia-p Iteet acce, i ctat t cabe ad Dsl,i ea biqit i the uited state ad eve had ag peid gegaphic dipaitie i avaiabiit. Mak-ig dia-p avaiabe de t ivve a high xed ct:Dia-p Iteet evice pvide (IsP) eed t etabiha pit--peece (PoP) i a aea b makig a caphe mbe avaiabe a a dia-i mbe, ad athghthi ivve addig me witchig eqipmet i the tee-phe cmpa ceta ce, the iatcte ivet-met i miima. Dwe ad Geetei (2002) dc-met that dia-p Iteet evice pead qick t evethe mt a ctie: I 1997, 99 pecet the u.s.ppati ived i ctie with at eat e IsP, ad 92pecet ived i ctie with eve me IsP. Theeae cae ecmie i havig a PoP, bt the ct tpgade iatcte badbad evice ae mchage (Geetei ad Pice, 2006).

7 Dsl ee t a ami techgie, techica de-cibed a xDsl. reidetia Dsl i mt te ADsl

(ammetic Dsl), ad highe-capacit vaiati icdesDsl ad VDsl.

8 Ma mae biee bcibe t Dsl a we. lagebiee e highe-badwidth cecti ch aT1 ad T3 ie. Cabe badbad i amt excive aeidetia evice.

9 The decipti Iteet iatcte ad the pce pgadig etwk eie Fedea CmmicatiCmmii (2000) ad Cig (2001, 2005).

10 The webite www.dept.cm/peqa/ditace eetimate ditace betwee a eidetia adde ad theeaet ceta ce ad map ceta ce cati.

11 Taditia cabe teevii i a e-wa cmmicati: Vide i badcat m the cabe head-ed t theeidece. Iteet evice, a we a digita cabe evicei tw-wa cmmicati, which eqie a dieetpteam iatcte.

12 Cabe pvide might have t make additia iatcte ivetmet a badbad adpti ie, cgeti iceae, ad badwidth peed a.

13 High eidetia deit i e ea wh Kea, HgKg, ad Japa have highe badbad adpti ad highepeed evice avaiabe tha the uited state de.

14 I additi t ateite ad Wi-Fi, thee i a WiMax

which i diced i Text Bx 2.15 sateite a ha a highe pt eqipmet ctHghenet baic evice ct $59.99 pe mth peedp t 700 kbp p a $400 eqipmet ad itaati eesee the webite g.gethgheet.cm.

16 see With a Dih, Badbad Ge ra (2006).

17 The aw ad ig that make p the edea egati badbad have ivved the metime cmpetigga (1) maximizig cmpetiti amg badbadpvide, (2) t edcig the icetive that badbadpvide have t ivet i iatcte ad ew appicati, ad (3) teatig Dsl ad cabe badbad eviceeve depite the act that teephe cmpaie a cmm caie have taditia bee bject t mchticte edea egati tha cabe cmpaie have.

18 I 2005, the FCC eqied that AT&T e akedDsl, de which cme ca bcibe t AT&TDsl evice witht bcibig t AT&T ca teepheevice, a a cditi it mege with sBC. The, i ate2006, the FCC eqied pecic picig aked Dsl aa cditi it mege with Besth. see AT&T toe naked Dsl Fa le Tha Bee (2007).

19 A ht expaati ivea evice i avaiabeat the FCC webite, www.cc.gv/cgb/cmeactiveaevice.htm. uivea evice appie tteephe, t Iteet, evice. Hweve, becae Dsl

e the teephe etwk, the ct pvidig Dsl iemte aea i we tha i the teephe etwk didt cve the aea. I ctat, cabe cmpaie ace ivea evice eqiemet. A a et, Dsl adpti ihighe tha cabe badbad adpti i ve w-deita aea.

20 Fibe-t-the-hme i e techg i a ca FTTxtechgie: The die i whethe the be etwkexted a the wa t the idivida hme, t the cb(FTTC), t a mtiit bidig (FTTB). Fibe etwkicde the that have dedicated be ig betwee the


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Broadband for All?


ctme ad the evice pvide (pit-t-pit etwk) have haed be (a i a paive ptica etwk).

21 Athe emegig wieie techg i Badbad ve

Pweie (BPl), which e the eectic pwe etwkad hme eectica wiig ad tet t ca Iteetdata. uike FTTH, BPl peed ae imia t the Dslad cabe (ee the webite www.cc.gv/cgb/cmeact/highpeediteet.htm).

22 I 2006, Caiia paed a aw ceatig tatewidevide achie, which aw teevii pvide tapp a ige tatewide achie athe tha mtipeca achie a cabe cmpaie have taditia hadt d. A i 2006, the FCC pt time imit the caachie egtiati pce ad achie ee; it a ctaied eaabe bid-t eqiemet, whichpeci hw qick teevii pvide ae eqied te evice t the etie achie aea. see the CnET.cm

atice at http://ew.cm.cm/FCC+adpt+eie++teecm+cmpaie+paig+TV+eig/2100-1036_3-6145184.htm.

23 Veiz teevii-ve-IP evice i caed Fios. AT&Tdeive it teevii evice, u-Vee, b extedig it -be etwk ce t, bt t a the wa t, eidecead the deiveig ctet ve the at pti theetwk ig a highe-capacit vei Dsl. see theCnET.cm atice at http://ew.cm.cm/ATT+t+amp+p+IPTV+expai/2100-1037_3-6153354.htm.

24 see seWet 2006 Q3 acia tatemet, at www.w.cm/media_eati/pe/eeae/eaig/pd/Q3_06acia_p6.pd.

25 ne sa Facic badbad pvide pa tdep FTTH t sa Facic bed imited tia, adthee pvide te pa ae t cmpaabe t FTTH(Cmbia Teecmmicati Cpati, 2007, p. 2).Veiz, i ctat, pa t ped $20 bi i ve eveaea t make be-t-the-hme high-peed evice avai-abe t 6070 pecet ctme i it cet eviceaea, which icde me aea i Caiia, accdig tVeiz Fi sevice Bid Mmetm (2006).

26 The Exective ode deigate the Bie, Tap-tati, ad Hig Agec a the ead agec mtitem, highightig the imptace iatcte deve-pmet t the ga badbad acce. o ma teecmpic ie, icdig ate egati, the Pbic utiitie

Cmmii ha epibiit.

27 Caiia Pbic utiitie Cmmii (2005, p. 62) hame detai the pgam ad a the imia edeae-rate pgam.

28 see the d webite at www.cetd.g.

29 I Tacma, Wahigt, the micipa pwe tiit,Cit light, bit, w, ad peate a be-ptic etwkthat deive Iteet ad teevii. see Citie DeiveBadbad le (2003).

30 Giett, leh, ad oi (2004) eview ma theeca badbad iitiative.

31 A it micipa wiee iitiative i the uited

state i avaiabe at www.miwiee.g. stat ii-tiative cme m the Jaa 2007 mma.

32 The mt ecet Pew ept badbad adptii baed a ve 4,000 adt ve the peidFebaApi 2006. see www.pewiteet.g/pd/PIP_Badbad_ted2006.pd.

33 Fete aa Techgaphic Bechmak vei cdcted b mai, i Egih ; the ampe aeeected m atia maket eeach pae t be ep-eetative u.s. hehd demgaphica ad aeweighted t cect dieece i epe ate. F-ete ha ed the Tns (me nFo) maket eeachpae ice 2001 ad ed nPD pae i eaie ea.

Fete cect data i the 48 ctig tate ad theDitict Cmbia bt t i Aaka Hawaii. smeepdet paticipate i Fete ve i mtipeea: Kk (2007) icde me gitdia aaim thee data. Bw ad Gbee (2002), Gbee(2000), Gbee ad Kew (2002), ad Pice (2003)e Fete data a we. The ath wa emped atFete m 2000 t 2005.

34 Cmpaie That Fght Citie Wi-Fi, nw rh tJi I (2006).

35 A cmpeheive it i avaiabe at www.miwiee.cm.

36 Wi-Pie i the sk (2006) eview the techgicaad maageia chaege citwide Wi-Fi etwk.

37 sme Wie a sa Facic Ge Wiee (2006).

38 Gge pvide ee Wi-Fi i Mtai View, Cai-ia, ad MetFi e bth ee ad paid Wi-Fi iCpeti, svae, ad sata Caa, Caiia. sees.F. Pick Gge Wi-Fi Team (2006), ad GgeGive Cit Fee Wi-Fi (2006).

39 I Phiadephia, Eathlik chage $21.95 pe mthgeea ad $9.95 pe mth w-icme hehd.

40 see, itace, the iteate m Wiee Phiadephia,avaiabe at www.phia.gv/wiee/bieg.htm; m

sa Facic TechCect, avaiabe at www.gv.g/ite/techcect_t_idex.ap; ad m a iteview withHt chie imati ce at www.gvtech.et/digitacmmitie/t.php?id=98722.

41 Pbic, Pivate Cabati T Deig siic Va-e Wide Wiee netwk (2006). siic Vae, ikemt age citie , ha a we hae w-icme eidetad me gegaphica dipeed biee that aetwe eved b Dsl cabe pvide.


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Broadband for All?


42 see What I The Bit a uba Wiee netwkad Had Ae ued It? (2006). The atice cite thecmpetiti m Wi-Fi cecti, mbie phe dataevice, ad xed-wie badbad a a maj ea

the ack iteet i paig Taipei micipa Wi-Fievice.

43 A pea aecdte: ove a tw-da peid i Agt2006 checkig the AT&T webite ad caig eveactme evice depatmet t ig p ew Dsl e-vice, the ath wa td b dieet pepe that (1) Dslwa avaiabe at the adde, (2) a we Dsl e-vice (p t 1.5 Mbp) wa avaiabe at the adde, (3) apeed Dsl evice wee avaiabe at the adde, ad (4)the adde wa t a vaid adde.

44 Thee ct icde bth pvide wh w the bad-bad pipe (ch a the dmiat teephe ad cabecmpaie) ad eee. Athgh eidetia ctm-

e acct mt the dmiat teephe ad cabecmpaie bcibe, me eee eve pimaibie ctme.

45 FCC (2004), p. 38. The FCC e advaced evicea a m badbad. Tw the ve FCC cm-miie dieted m the pbeat cci theept, ad bth ted the iadeqac ig the e-bcibe-i-a-zip-cde meae avaiabiit. sti, themai cce bth diete wa the we eve badbad adpti i the uited state eative t thati Kea, Japa, ad the ctie, t the ieqait badbad avaiabiit withi the uited state. Fthe-me, t d gba badbad eade have a highepecetage hehd with badbad, aveage bad-bad peed ae a mch highe.

46 The CPuC emphaize the ieqait i the mbe pvide i zip cde, athe tha ig the data a evidece biqit acce t badbad, ad te that thi ep-eetati de t depict the avaiabiit badbad eve eidet i each idetied zip cde aea.

47 Famm (2006). Gbeic (2006), ad Piege (2003) ae FCC badbad data.

48 Thi ecti the ept daw heavi Kk (2007).Detai the methdg ieig badbad avai-abiit ca be d thee.

49 uike the CPs Pew, Fete icde epdet

zip cde.

50 Thi appach aie tw methdgica cce. Fit,cati chaacteitic cd be captig beved idi-vida chaacteitic. secd, cati ite cd aectthe demad badbad i, itace, pepe with eacce t dct te have geate demad ieheath advice ie hppig. Kk (2007) d thatcati chaacteitic have a mch mae iigi-cat eect techgie the tha badbad ad that

cati chaacteitic tg ifece the chice cabe ve Dsl, which i mch me paib de tavaiabiit dieece tha t cati-dive dieecei deig demad e badbad techg ve

the the. sti, it i imptat t keep i mid that thiappach meae avaiabiit a the eatihip betweecati chaacteitic ad adpti, which might a becaptig me eect i additi t avaiabiit. Ftheme, thi meae de t capte ea the tha zipcde deit ad zip cde icme vaiati i avaiabiit, ch a zip-cde-eve tpgaphica dieece thamight make me zip cde me expeive t eve.

51 Thi appach impicit capte gegaphic di eecei badbad pice. I thee i me cmpetiti amgbadbad pvide i highe-deit aea, thi cdet i we pice ad theee highe adpti. Theti avaiabiit ed hee i t jt a bia meae bt athe a cti meae that capte dime

i avaiabiit ch a pice ad qait evice.52 DiMaggi et a. (2004) eview the academic iteate the digita divide i cmpemeta ki ad pvide medetai the chaege eeache ace i tdig it.

53 Fete meae badbad ee t high-peedIteet acce ad meti Dsl ad cabe mdem aexampe. I the qeti i Fete ve thatak abt pecic techgie, badbad icde Dslcabe, xed wiee, ad ateite.

54 That i, the ceciet the Caiia dmm vai-abe i a pbit egei whee badbad adpti ithe depedet vaiabe a b abt ha whe idividademgaphic ae icded.

55 That i, the ceciet the Caiia dmm vaiabei a pbit egei whee badbad adpti i thedepedet vaiabe i t igicat dieet m zewhe idivida demgaphic ad zip cde chaacteitic (g media icme ad g deit) ae icded.

56 Becae thee cd be ma act iqe t Caiia that aect badbad adpti, e cat ccdethat the ae i eevat idivida. F itace, i, hpthetica, AT&T had bee a aggeive i igt badbad i Caiia, bt tate pic made depmet me dict tha i the tate, thee tw eectcd cace each the t. Th, we emphaize that act iqe t Caiia did t cective have a eec

badbad adpti.

57 The web- appedix www.ppic.g/ctet/the/707JKEP_web_appedix.pd peet egei et Caiia ad a the uited state. Highe-icmead highe-deit zip cde have highe badbad adpti, ctig idivida chaacteitic, bth Caiia ad the uited state. The eect icme imae Caiia tha the uited state, athghtatitica igicat i bth cae. The eect deiti imia Caiia ad the uited state.
http://www.ppic.org/content/other/707JKEP_web_appendix.pdfhttp://www.ppic.org/content/other/707JKEP_web_appendix.pdfhttp://www.ppic.org/content/other/707JKEP_web_appendix.pdfhttp://www.ppic.org/content/other/707JKEP_web_appendix.pdf


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Broadband for All?


58 Thee igicat ad pitive eatihip d t hdwhe Iteet acce (badbad dia-p) i the depe-det vaiabe, whe cmpte wehip i the depe-det vaiabe. Thi i the evidece that the eati-

hip betwee zip cde chaacteitic ad adpti i det avaiabiit, ice the avaiabiit dia-p acce adcmpte wehip d t va gegaphica. reativet the vea badbad adpti eve 47 pecet, iv-ig i a zip cde with a g deit e tadad deviati(1.72) abve the mea aie the ikeihd badbadadpti b ix pecetage pita amt t tatitica igicat bt age i magitde a we.

59 Tabe 2 hw the ie egi deed b the Ecmicstateg Pae, bt we have pit the sa Jaqi Vae itthe ad the egi, ad we have pit the sth-e Caiia egi it Geate l Agee ad IadEmpie. The ditibti Fete epdet acthee egi i imia t the ppati ditibti.

60 That i, a F-tet de t eject the hpthei that theegia dmmie a eqa ze i a egei Ite-et adpti (ad, epaate, cmpte wehip) idivida chaacteitic ad egia dmmie. Thi tetde eject the hpthei iigicat egia dm-mie whe badbad adpti i the depedet vaiabe.

61 Athgh thi ecti ce ace, ethicit, ad i-cme, it i a a ga Caiia pic t cide thedigita divide betwee pepe with diabiitie ad pepewitht. Fete ve d t ak abt diabiittat.

62 The Fete Techgaphic ve i g, detaied,ad cdcted b mai, epdet eed cideabeEgih pciec t cmpete it. Ftheme, bth Hi-paic ad Aica Ameica ae deepeeted iFete ve eative t thei hae i the ppatiepted b the Ce. Hweve, the icme ditib-ti thee gp i Fete ve ae qite cet the i the Mach 2005 Cet Ppati sve, Fete ampe appea t be a eaabe eghepeetati t ept et.

63 sme -Hipaic white, Aica Ameica, adAia Ameica a ack Egih pciec, bt theEgih pciec eqiemet hd aect the epe-etativee the Hipaic ampe mt.

64 Becae Hipaic peeig t peak spaih ae a

cideabe hae Caiia ppati, the vea

eve badbad adpti i Caiia ie m 55pecet amg a Caiia t 65 pecet whe theeHipaic ae excded, ggetig that the Fete ge Egih-peakig Caiia wd a b p t 10

pecetage pit i -Egih-peake wee a -veed. Thee ge ae highe tha the Fete ge vea adpti i pat becae the PPIC ve wacdcted 15 mth ate the Fete ve. A, thePPIC data, ike Fete data, hw a gap i adptibetwee Hipaic peeig t peak Egih ad white,i pat becae a highe eve Egih pciec wdbe eqied t cmpete Fete mai ve i Egihtha t paticipate i PPIC teephe ve i Egih.A eaie ve, the octbe 2003 Current PopulationSurvey, ept that badbad adpti i 18 pecet Caiia Hipaic wh ae t spaih- ve 2 pecet spaih- Hipaic i Caiia.Data m PPIC ad the Current Population Survey aeweighted ig tadad demgaphic t epeet the

ppati me accate, bt the ge epted heed t the adjt demgaphic ig a egeiamewk.

65 The egei deig thi dig a ct zip cde icme ad deit.

66 Wh might a hehd have badbad witht a cm-pte? sme videgame ce, digita vide ecd-e, ad matphe ca cect diect t the Iteetig cabe Dsl. Hehd cd a have bad-bad acce e with a empe-pvided cmpte.I Caiia, 80 pecet hehd have a cmpte.Amg cmpte-wig hehd, 58 pecet havebadbad at hme. Amg hehd with badbad,98 pecet w a cmpte.

67 raiig g icme b e tadad deviati at themea g icme i eqivaet t aiig icme m$48,000 t $114,000. The tadad deviati g icmei .875.

68 Thee et ae m (1) a pbit egei cmptewehip idivida chaacteitic ad (2) a pbitegei badbad adpti idivida ad zipcde chaacteitic, cditia cmpte wehip.

69 Athe tateg iceaig cmpte wehip imaactig ad ditibtig exteme w-ct cm-pte, which i the ga the pt oe laptp PeChid dati, www.aptp.g. It c i aiig

cmpte e amg chide i devepig ctie.


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Broadband for All?


Fedea Cmmicati Cmmii, Availability oAdvanced Telecommunications Capacity in the UnitedStates: Second Report to Congress, Wahigt, D.C.2000.

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Broadband for All?


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About the Author

Jed Kolko is a research ellow at the Public Policy Insti tute o Caliornia.

Contributors

Davin Reed provided research assistance or this edition o California Economic Policy.

I would like to thank Richard Greene or editorial assistance and Dean Bonner and Mark Baldas-sare or PPIC survey data. I am grateul to Forrester Research or permission to use the Techno-graphics Benchmark data. Anne Neville (State o Caliornia Business, Transportation, and HousingAgency), Shane Greenstein (Northwestern University), Dan Mazmanian (University o SouthernCaliornia and PPIC), Jaime Calleja A lderete (PPIC), Ellen Hanak (PPIC), Deborah Reed (PPIC),and Mark Baldassare (PPIC) provided detailed and thoughtul comments on drat versions o thisreport. Brian Moura (Wireless Silicon Valley Initiative) provided background insights on municipalwireless initiat ives. Part icipants at the Telecommunications Policy Research Conerence and atPPIC seminars oered helpul suggestions. Responsibility or any errors is solely mine.

Walter B. HewlettDirectorCenter or Computer AssistedResearch in the Humanities

Ki Suh ParkDesign and Managing PartnerGruen Associates

Constance L. RiceCo-DirectorThe Advancement Project

Raymond L. WatsonVice Chairman o the Board EmeritusThe Irvine Company

Carol WhitesidePresidentGreat Valley Center

Board o Directors

Thomas C. Sutton, ChairRetired Chairman and Chie Executive OcerPacic Lie Insurance Company

Mark BaldassarePresident and Chie Executive OcerPublic Policy Institute o Caliornia

Linda GriegoPresident and Chie Executive OcerGriego Enterprises, Inc.

Edward K. HamiltonChairmanHamilton, Rabinovitz & Alschuler, Inc.

Gary K. Hart

Former State Senator and Secretary oEducationState o Caliornia

The Public Policy Institute o Caliornia is

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established in 1994 with an endowment rom

William R. Hewlett. The Institute conductsindependent, objective, nonpartisan research

on the economic, social, and political issues

aecting Caliornians. The Institutes goal

is to raise public awareness o these issues

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basis or developing policies and programs.

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In This Issue of CEPWho has broadband?

Who can get it?

are available free of charge on PPICs websitewww.ppic.org

R E C E N T I S S U E S O F California Economic PolicyPay-or-Play Health Insurance Mandates: Lessons rom Caliornia

Lawns and Water Demand in Caliornia

Trade with Mexico and Caliornia Jobs

Are Businesses Fleeing the State? Interstate Business Relocation and Employment Change in Caliornia

A Decade o Living Wages: What Have We Learned?

Documents

Broadband for All PPIC July 2007