Evaluating Broadband Stimulus and the National Broadband Plan: Establishing Expectations for Broadband Rankings

Abstract

The United States has recently reinvigorated its efforts to promote ubiquitous broadband at affordable prices for all Americans by both committing over $7.2 billion in stimulus funds and by requiring the Federal Communications Commission to issue a “National Broadband Plan.” The big policy question is how do we evaluate the success or failure of these efforts? Despite the deep analytical defects the Organization for Economic Cooperation and Development’s broadband rankings (“OECD”), many people nonetheless continue to use these rankings as a meaningful indicator of success and failure of broadband policy. As such, we briefly suspend criticism to establish a performance metric by which to assess the success or failure of new broadband interventions using the OECD’s rankings. Utilizing standard models of diffusion, we estimate the counterfactual broadband subscription rank that can be used as a tool to assess whether these new broadband policy interventions are successful. Based on historical trends and without significant policy changes, the United States will likely increase its rank to 13th by 2012, with a statistical upper limit of ninth position. There is very little risk of a downward movement in rank. Given this trend and presumed analytical legitimacy of the OECD’s rankings, our analysis finds that the United States must rank at least ninth among OECD countries within the next two to three years in order for the Obama Administration to claim with confidence that its policy interventions made a measurably positive impact on broadband adoption.