Document Type

Article

Publication Date

4-11-2016

Abstract

This report examines the great progress made in availability and adoption in the broadband market over the past few decades and shows how Californian residents and businesses have come to use broadband widely. The policy issues involved with continuing the tremendous strides already made are discussed, along with recommendations for policy-makers.

The report begins by documenting the rapid growth of Internet usage in the U.S. and California. There is a review of the current state of competition in voice and broadband markets, discussing the decline of traditional telephone service, which is rapidly approaching irrelevance, and the rise of wireless and Internet services. California consumers dropped one in five of their remaining traditional voice lines in 2013, leaving only 9 percent residential voice lines in California as traditional POTS lines. As of the first half of 2014, 47 percent of U.S. households relied only on wireless phones.

The report discusses policy issues of availability and adoption of broadband. Since availability is nearly ubiquitous, policy focus should switch to the remaining barriers to adoption. State and federal policy toward universal service (CASF, CAF, Lifeline) is reviewed. The report presents detailed statistics on the availability of broadband in California. Growth in availability since 1999 to today’s nearly ubiquitous coverage is presented. Broadband has been growing at an annualized rate of 30.4 percent since 1999 and more than 130 broadband providers have entered the market in the state. Mobile broadband now accounts for 70 percent of broadband connections. The data show rapidly increasing quality of service, with speeds rising from 7 Mbps in 2008 to 55 Mbps in 2015. Over the same time period, there was a significant decline in the quality-adjusted price for broadband, from $12.89/Mbps in 2008 to $3.42 in 2015.

The report concludes with policy recommendations to expand broadband access and adoption, including deploying low cost options to achieve broadband parity, coordinating state and federal rural access subsidies to prevent waste, and updating state and federal Lifeline programs to support broadband. Other policy implications discussed include the need to remove barriers to deploying broadband infrastructure such as access to municipal rights of way, and retargeting CASF funds to unserved (rather than underserved) areas.

A brief version of this report is available as Paper 62 (http://digitalcommons.pepperdine.edu/sppworkingpapers/62).

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