The International Handbook of Telecommunications Economics, Volume II
Edited by Gary Madden
Chapter 3: Residential demand for access to the Internet
Paul N. Rappoport, Donald J. Kridel, Lester D. Taylor, James H. Alleman and Kevin T. Duffy-Deno INTRODUCTION The focus in this chapter is on the residential demand for access to the Internet, and represents an extension of earlier work on Internet access demand by Rappoport et al. (1998), Kridel et al. (1999, 2000) and DuﬀyDeno (2000). The analysis of broadband demand has been studied by Eisner and Waldon (1999), Madden et al. (1999) and Madden and Simpson (1997). With the aggressive marketing of cable modems and ADSL service, a growing number of residential households in the United States (US) now have a choice regarding how they access the Internet. The choice set available, however, is not uniform. In some areas the only form of access is through dial-up modems, while in other areas various forms of high-speed access (cable modems or ADSL) are also available. This chapter reports the results from a set of models of Internet access where the models are diﬀerentiated by the availability of Internet access options. The models are based on the analysis of surveys submitted by over 20 000 households during the period January–March 2000.1 Among other things, broadband penetration rates are presented and compared to Internet access estimates presented in the NTIA report (2000), ‘Falling through the net: Toward digital inclusion’.2 In addition a more complete set of elasticity estimates, for both basic and high-speed access to the Internet, is provided. The chapter is organized as follows. A brief summary of...
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