A need for speed? Rural Internet connectivity and the no access/dial-up/high-speed decision

Abstract

As residential high-speed Internet access has become more prevalent, the nature of the rural–urban digital divide in access has shifted. In 2000, dial-up access rates in rural households lagged behind their urban counterparts by 11 percentage points. By 2003, however, dial-up access rates were equal in rural and urban areas, but high-speed access rates were 14 percentage points higher in urban areas. This article uses a nested logit model to explore the household decision between no Internet access, dial-up access and high-speed access. A decomposition technique is then used to estimate the contributions of various factors, including education, income and infrastructure levels, to differences in Internet access among rural and urban households. The results suggest that policies which solely promote infrastructure in rural areas fail to address the dominant factors in the emerging high-speed digital divide.