The Federal Communication Commission’s National Broadband Plan - Adoption, Usage, and Global Impact of Broadband Technologies - page 58

questions with data and analysis. As of the end of
September 2009, over 1,000 comments and replies
have been submitted to the FCC.
The purpose of this chapter is to examine the
written documents generated by stakeholders'
responses concerning the specific issues of open
networks and competition (sections C. 5. and 6. in
the NOI) and indicate how these issues can aid in
the achievement of the nation's broadband goals.
Also, the chapter makes recommendations to the
FCC in its formulation of federal policy as to the
position that makes the most economic sense on
these issues.
While the focus of this chapter is on how
public policy in the Unites States can promote
adoption, diffusion, and utilization of broadband,
it should be recognized that there is a significant
body of earlier research that examines demand
and supply factors that influence broadband
adoption and diffusion. For instance, Papazafei-
ropoulou and Dwivedi (2009) review 49 studies
examining broadband adoption and diffusion
in developed and developing economies and
construct a framework that consists of a listing
of and number of studies associated with factors
that influence adoption and diffusion decisions
at the national level, the consumer level, and for
small and medium size enterprises. In particular,
with respect to consumer adoption and usage,
the authors identify 34 key micro factors that
include demographics/user characteristics (14
papers), cost/price/subscription fee (11 papers),
and content/applications (6 papers). Another line
of empirical research examines households who
have chosen not to subscribe to broadband and
compares them to consumers who have adopted
broadband. For example, Dwivedi and Irani (2009)
find empirical support to suggest that there are
factors other than subscription fee and speed of
access that matter to non-adopters. In particular,
to increase consumer adoption of broadband,
non-adopters must perceive that broadband is
better than narrowband and that broadband will
enhance the effectiveness of household activities.

Residential consumers' purchase of broadband
service has grown remarkably this century. In
2000, only 3% of American residential homes
subscribed to broadband service, whereas by
August 2009 the percentage of broadband Internet
residential subscribers was about 67% (Horrigan,
2009). However, the provision of broadband In-
ternet access appears to be heavily concentrated.
According to FCC and network provider data,
incumbent cable broadband providers (providing
cable modem service) have a 57% share of the
fixed residential broadband access market and
incumbent phone companies (providing digital
subscriber line service (DSL) or fiber-optic broad-
band service) have 39%, with the remainder spread
equally among cable overbuilders, competitive
local exchange carriers, and others (satellite, wire-
less, and powerline providers) (Free Press, 2009).
Generally, Congress hopes that the creation and
implementation of a broadband plan will achieve
the following national goals:

a. Increased deployment of advanced broad-
band networks to unserved and underserved
regions of the nation, such as the states of
Mississippi, West Virginia, Alabama, New
Mexico, and Montana. (We refer to this as
a supply side goal.) The FCC estimates that
between 3 and 6 million homes do not have
access to a broadband connection, defined as
speed in one direction of 768kbps or more
(Schatz, 2009b).
b. Increased adoption of advanced broadband
service by end users. Specifically, what needs
to be done to convince the remaining 33% of
the residential home population to perceive
sufficient value to justify a subscription for
broadband service?
c. Increased utilization of advanced broadband
networks by end users. (We refer to goals
b. and c. as demand side goals.) As end us-
ers increase their utilization of broadband
service by demanding higher bandwidth
services, this goal will require network