Understanding uptake in demand-side broadband subsidy programs: The affordable connectivity program case

Abstract

The Affordable Connectivity Program (ACP) represents a historic investment by the federal government to address the digital divide. Its goals are both to increase the rate of broadband adoption and make it easier for low-income households to sustain service. But what have been the drivers of ACP enrollment? We know a great deal about trends in adoption and the geography of enrollment among eligible households. But those metrics – especially a focus on enrollment rates among eligible households – are only so useful in explaining ACP sign-ups.

This invites analysis that investigates the drivers of ACP enrollment in a comprehensive way, which this paper proposes to do. The paper hypothesizes that ACP enrollment decisions are not solely individual (i.e., that a household's enrollment decision is structured only by income level), but also influenced by community-wide considerations, such as housing costs, share of occupied houses, presence of anchor institutions such as public libraries, and population density (i.e., whether a place is urban or rural). The paper develops a regression model that predicts ACP enrollment rates among eligible households at the 5-digit zip code geography as a function of the variables discussed above, as well as others such as the racial and ethnic make-up of a zip code area. The analysis also controls for existing levels of broadband subscriptions and computer ownership in a given area. The difference between predicted and actual ACP enrollment rates at the 5-digit zip code level is proposed as a metric of ACP performance. These findings are supplemented with a geographically weighted regression (GWR) model that allows the relationship between each explanatory variable and ACP enrollment to vary by locality. This allows for analyzing and visualizing how these relationships vary across space.

The empirical findings show that high levels of economic distress are a strong determinant of ACP enrollment in a given area, but social and community-wide indicators are important as well. The GWR results demonstrate that important differences in these relationships exist across geographies. Understanding spatial variations in ACP performance can help policymakers and other stakeholders better target resources to address the digital divide.