Consumer Usage of Broadband Internet Services: An Analysis of the Case of Portugal

Consumer Usage of Broadband Internet Services: An Analysis of the Case of Portugal

Janice Hauge (University of North Texas, USA), Mark Jamison (University of Florida, USA) and Mircea Marcu (University of Florida, USA)
DOI: 10.4018/978-1-60960-011-2.ch013
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Abstract

We analyze the intensity and patterns of use of fixed and mobile broadband consumers in Portugal. If usage across types of consumers is similar after controlling for individual characteristics identified to be important drivers of adoption, then it is more likely that consumers view mobile and fixed broadband as somewhat substitutable. Such a result is important for studies of broadband impacts; specifically, for discerning whether mobile broadband service will have a similar level of impact upon social and economic development as fixed broadband services have had. Results indicate that broadband uses are similar across fixed and mobile users, suggesting that the technologies are somewhat substitutable from customers’ perspectives and raising the possibility of limited differential effects on innovation and other social goals. Results of interest include the characteristics of Internet users by technology, and differences of usage patterns reflected by individual characteristics.
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Background

The economic importance of broadband is well accepted, but there is much that we do not know about how various technologies of broadband delivery differ in their commercial viability, effectiveness, and value. In some countries, such as the United States, customers often can choose between fixed technologies (such as DSL, fiber to the home (FTTH), and cable), and can access wireless broadband through WiFi and third generation mobile (3G). In other countries, where cable television is less well developed, customers generally do not have the option of choosing cable for broadband access. Japan is emphasizing FTTH in its broadband policies, and also relies on DSL. There also are countries, such as Portugal, where wireless broadband is expanding rapidly. Whether customers view these various technologies as providing equivalent broadband access is important for public policy reasons: a country that is predominant in one broadband technology may be so because regulatory policies include technology biases. Such a country could be at a competitive disadvantage if its populace would find a different mix of technologies to be more productive economically and socially. On the other hand, if alternative broadband technologies are close substitutes, then a country could waste resources promoting a change in technology mix.

Another important consideration for understanding the roles of various broadband technologies is the context within which broadband penetration occurs. According to Schwab and Porter (2007), the most competitive economies in the future will be those that are innovation-driven. Broadband is instrumental in creating opportunities for innovation in a modern economy. A study by Van Ark and Inklaar (2005) supports this assertion, finding that the economies that have experienced the greatest economic impacts from information technologies are those that have leveraged those technologies to create entirely new products and ways of doing business. Still, broadband alone does not promote innovation; the Global Competitiveness Index includes numerous economic and legal features of a country that should be present if broadband is to reach its potential impact. 1

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