From Network Externalities to Broadband Growth Externalities: a Bridge not yet Built

Quantifying the impact of new technologies on economic activity has proven notoriously difficult. Indeed, it has taken decades of research to understand confidently the linkages between the advances in information, communications, and technology (ICT) spawned by the personal computer and aggregate economic activity. Today, the rapid deployment of broadband technology presents economists with this same challenge. In this paper, we explore the foundations of network and growth externalities that are associated with broadband deployment. We find that both theoretical and empirical models that better specify the micro-transmission paths in which broadband are likely to enhance economic output, employment and productivity are needed.