Who’s Superconnected and Who’s Not? Investment in the UK’s Information and Communication Technologies (ICT) Infrastructure

Abstract

The Information and Communication Technologies (ICT) infrastructure sector has dramatically expanded over the past decade as the demand for increased digital connectivity has increased from both companies and consumers. Broadband investment has been increasingly associated with positive economic growth and digital connectivity is seen as an essential ingredient with which to increase productivity, employment and create new enterprises. Hence, there is concern that companies and consumers in particular locations are disadvantaged if they are unable to obtain sufficient connectivity. At the present time there has been limited analysis of where new investment has taken place, why it has taken place in specific locations, and what the key economic and socio-economic drivers have been influencing this. The role of regulation in this process is also important to understand. This article draws on two unique, uncensored infrastructure datasets from the UK's telecommunications regulator Ofcom to assess the factors driving investment in fixed and mobile ICT infrastructure. The fixed infrastructure model utilised modem sync speed measurements from over 20 million premises, aggregated to 7004 Middle Super Output Areas (MSOA) (97.3 %) in England and Wales, to provide comprehensive micro-geographic analysis for the first time. The mobile model employed the average data transfer per premises as a network capacity-demand metric for 173 counties and Unitary Local Authorities (ULAs) (98.3 %) in England, Scotland and Wales. Using predictors at a range of spatial scales, multilevel modelling utilising Markov Chain Monte Carlo (MCMC) methods was used to estimate both the fixed and mobile broadband infrastructure models. The results confirm many of the prevailing postulates of existing telecommunications theory, namely, that dense, wealthy and well-educated areas are attractive investment hotbeds for telecommunication technologies. In the UK's fixed ICT infrastructure market, inter-platform competition was found to have a positive impact on investment compared to the mixed results found for intra-platform competition. On the whole, telecommunication investment in the UK appears to be driven by the same drivers as the much documented U.S. case, but further spatially granular research needs to be undertaken to examine the market dynamics between the incumbent and different forms of induced competition across the telecommunication network.

Individual internet usage and the availability of online content of local interest: A multilevel approach

“…Riddlesden and Singleton (2014) utilised broadband speed micro-data to explore the effect of urbanisation and population density on Internet broadband speed. Moreover, Oughton et al (2015) confirmed that the previous findings regarding the internet infrastructure pull factors can also explain the spatial pattern of the internet broadband speed at the neighbourhood scale in the UK. There is also evidence that the adoption of internet and new related technologies follows an innovation-diffusion process with more urban, affluent, and younger areas acting as centres of innovation (Farag et al, 2007).…”

“…For instance, these models did not control for the quality of internet service at the local level, something which cannot be controlled with regional dummies as internet connectivity varies substantially within regions. Such variation has been explored in some very granular studies on the quality of the internet infrastructure in the UK, which were discussed above (Riddlesden and Singleton, 2014;Oughton et al, 2015). Interestingly, the literature suggests that locational characteristics such as the supply of internet service may affect internet adoption (Forman et al, 2018).…”

Social Network Sites and Knowledge Transfer: An Urban Perspective

“…Economic and human geography research has explored the spatiality of different internet technologies demonstrating a digital turn in human geography (Ash, Kitchin, and Leszczynski 2016). For instance, early internet geography research explored the economic geography of the internet’s infrastructure (e.g., Wheeler and O’Kelly 1999; Moss and Townsend 2000; Tranos 2013) and the economic effects that such infrastructure can generate (Kolko 2012; Tranos 2012), while more recent research focused on the characteristics and the divides among internet users (Blank, Graham, and Calvino 2018; Singleton et al 2017) as well as the internet broadband speeds they experience (Riddlesden and Singleton 2014; Oughton, Tyler, and Alderson 2015). The underpinning of this strand of research was that the internet is a general-purpose technology and, therefore, can generate productivity-related effects (Malecki 2002).…”

Policy Choices Can Help Keep 4G and 5G Universal Broadband Affordable

“…Most digital infrastructure around the world is deployed by private network operators via market methods (Cave, 2017;Cave et al, 2019;Gruber, 2005;Jeon et al, 2020;Moshi and Mwakatumbula, 2017;Oughton et al, 2015;Wallsten, 2001;Yoo, 2017). A common challenge in the deployment of digital infrastructure across national territories results from the cost of supply exceeding the price users are willing (or capable) to pay, notably in remote areas (Gerli et al, 2018;Oughton et al, 2018a;Rosston and Wallsten, 2020).…”