Broadband adoption, benefits on the rise

Home broadband adoption increased more than six-fold between 2001 and 2008, and while gaps in adoption still exist, gaps in valuation no longer do, according to a study released today by the Internet Innovation Alliance (IIA). The report found that with $32 billion gains in 2008, consumers received more than $30 billion in benefits annually from using broadband at home.

According to the study, “The Substantial Consumer Benefits of Broadband Connectivity for U.S. Households,” approximately 66.6 million households used broadband in 2008, up from 10.4 million in 2001. Of these, the number of dial-up users has decreased from 44.2 million households in 2001 to 10.5 million in 2008, and households with no access at all fell from 53.6 million in 2001 to 39.7 million last year.

The report was conducted by Jonathan Orszag, senior managing director at economic consulting firm Compass Lexecon, Mark Dutz, Compass Lexecon special consultant, and Robert Willig, a professor of Economics and Public Affairs at Princeton University and former chief economist in the Department of Justice’s Antitrust Division. It was produced with the goal of informing national broadband strategy and the upcoming allocation of broadband stimulus funds.

“The purpose of this is to help inform the debate and national broadband strategy that the FCC is developing and to inform policy makers now responsible for the stimulus money,” Orszag said on a call today discussing the results. “One of the conclusions we have here – the fact that broadband is a necessity, A, and that there are significant adoption gaps, B, - should inform the policy debate. Those are helpful and useful pieces of information to determine a policy.”

Broadband Internet access was considered a necessity by most American households for its benefits in the areas of education, health care, work, news, entertainment and civic affairs. Orszag said the necessity of broadband was also evidenced by the decline in price elasticity over the last four years, as well as the fact that when people lose their jobs today they are not cutting their broadband, they are turning to it to search for their next job.