EDITOR’S NOTE: Last week in our series on broadband, the authors wrote about broadband availability. This week the authors look at broadband adoption, or the rate at which individuals choose to subscribe to broadband service.
Rates of residential broadband adoption have grown considerably between 2003 and 2010. Overall adoption rates have more than tripled from around 20% in 2003 to over 65% in 2010. Interestingly, the overall “digital divide” between rural and urban households (technically designated as metro vs. nonmetro below) has remained consistent over this period at around 13 percentage points.
So, not a lot of progress has been made in closing the metro/nonmetro broadband gap. Perhaps more interesting, however, are the changes in the gap over time among particular demographic groups. In particular, the metro/nonmetro gap has actually increased over time for households with characteristics that have historically been associated with low levels of broadband adoption (low income, low education and elderly).
The figures below show the metro/nonmetro gaps in broadband adoption rates for various income and education levels in both 2003 and 2010. Adoption rates for all households increased over this time. However, the metro/nonmetro gap has in fact gotten larger in some cases – suggesting that rural households are now even further behind their urban counterparts than they originally were in 2003. In particular, the metro/nonmetro gap for households with lower income levels (less than $40,000) is actually larger in 2010 than it was in 2003. While the gap for higher-income households has decreased, these lower income residences seem to be losing ground in rural America – at least in terms of broadband adoption.
Similarly, the metro/nonmetro gap for households headed by an individual with a less than a high school degree was larger in 2010 than it was in 2003. The gap shrunk for households headed by someone with more than a high school diploma, but again, less-educated individuals in rural areas are falling further behind.
A similar story can be told about another important predictor of Internet adoption – the age of the head of household. Figure 4 demonstrates that older heads of households (ages 60 and older) in metropolitan areas increased their broadband adoption rates between 2003 and 2010 at a faster rate than their non-metropolitan counterparts. This means that another group of historically slow broadband adopters – the elderly – are seeing the metro/nonmetro broadband gap increase rather than decrease.
This trend of increasing metro/nonmetro broadband gaps over time for specific demographic groups continues along racial and ethnic lines. Figure 5 demonstrates that for minority categories such as black, Hispanic, and other race, the metro/nonmetro gaps are larger in 2010 than they were in 2003. The metro/nonmetro gap for whites was relatively consistent in both years, while Asian households actually had higher broadband adoption rates in nonmetro areas in 2010 (and thus had a “negative” gap).
There has been a lot of discussion recently about rising income inequality and diminishing “equality of opportunity” in the United States. Effective use of broadband Internet certainly has the potential to increase economic mobility for some historically disadvantaged groups – but only if these households are introduced to the possibilities the technology presents. In rural areas, in particular, broadband holds a world of opportunities for income generation (examples here and here) and improving education (examples here and here). The statistics presented in this article, however, are cause for concern. Historically disadvantaged groups in rural areas seem to be falling further behind in broadband adoption, which can make the situation even worse.
So, while most government policies dealing with broadband have traditionally focused exclusively on providing infrastructure (such as grants or loans to telecommunication companies), there is a case to be made for attempting to increase demand. Economists have been making this case for a while. In particular, the much ballyhooed $7.2 billion broadband component of the American Reinvestment and Recovery Act only put about 3.5% of those funds toward encouraging sustainable adoption. Programs that help educate rural citizens about the opportunities that broadband presents are a useful complement to investments in the infrastructure itself – and likely deserve a bigger chunk of the pie.
(The next article in this series will focus on what the evidence says about broadband’s impact on the economic health of rural areas.)
Brian Whitacre is an associate professor in the department of Agricultural Economics at Oklahoma State University. His research, extension and teaching appointments are focused on rural economic development, with a heavy emphasis on the role of broadband access.
Roberto Gallardo is an associate extension professor at Mississippi State University, where he serves as project manager for the statewide broadband adoption initiative.
Sharon Strover is a Regents Professor in Communication at the University of Texas, where she directs the Telecommunications and Information Policy Institute. Her teaching and research focus on technology, policy and regulation.
Funding for this study was provided by the National Agricultural and Rural Development Policy Center (NARDeP).