Improving Broadband Policy Design Using Market Data: A General Framework and an Application to Brazil

Abstract Disparities in broadband access and use reduce the economic and social benefits of digital technology. Consequently, many countries are searching for effective solutions to narrow digital divides. This paper proposes a framework that can help to design more effective policies for the expansion of broadband. Building on research on the drivers of broadband investment, the model assists in delineating geographic areas where commercial operators are unlikely to provide service without additional incentives. Furthermore, it helps to identify policy instruments that increase the attractiveness of an area to investors. Such knowledge facilitates the design, prioritization, and targeting of supply-side and demand-side policy measures. The article utilizes data from the fixed broadband market in Brazil to demonstrate the potential uses and benefits of the approach. The model is flexible and can be tailored to other countries. It can help improve existing broadband policies and inform new approaches.