P2P and Broadband Adoption

I was recently at a 3-day meeting  on broadband adoption at the New American Foundation.  This is a hot subject as the FCC prepares its national broadband strategy for Congress, due in February.

Part of the meeting focused on the national broadband strategies of other countries–India, China, and Tanzania among others.  As in the US, the basic playbook involves both building infrastructure and ensuring that it’s priced at levels that some signficant portion of the population can afford.  The expansion of cellular data services has a large place in these strategies, due to generally cheaper buildout  costs and cheaper devices.  As always, the resulting information and communication services are described as catalysts of economic activity.

But what drives adoption?  Even when built out, broadband prices almost always remain high relative to local incomes, and local information services are a chicken/egg proposition–waiting on a large enough public to warrant the investment.  E-commerce, e-government, and other services follow, rather than precede, widespread adoption.

Our work on piracy suggests that this early phase of  broadband adoption is driven by P2P use.  P2P accounts for an astonishing percentage of total bandwidth utilization in most parts of the world–estimated at 70% in Eastern Europe, 60% in South America, and slightly lower percentages in Northern and Southern Europe.  (These numbers are drawn from a 2009 study by Ipoque — a vendor of ISP traffic monitoring tools.  As Ipoque acknowledges, the numbers are based on a very limited sample of ISPs and so need to be taken with a grain of salt.)  P2P is the highest value service available to early adopters in many parts of the world–even more so than in the in the US because of the yawning gap between incomes and licit prices for media.

The similar relationship between P2P and consumer adoption in the US, during the phase of rapid growth between 2001 and 2007, has been widely discussed.  Estimates for P2P use in the US are similarly dicey, but now tend to be much lower than in most parts of the world–on the order of 20-30% of total bandwidth.  The category is already surpassed in total volume by streaming video services such as YouTube and Hulu.

So to me it looks like there are at least two broadband adoption models that need to be understood–and potentially accommodated in policy.  First is the question of how a country goes from effectively zero broadband to relatively widespread adoption–say, the US arc from roughly 3% in 2000 to 50% in 2007.   Clearly P2P services and, by implication, copyright infringement have been a large part of the answer.   A variety of US-sponsored negotiations–most prominently, the proposed ACTA treaty–appear geared to turn off that spigot.   The FCC, on the other hand, has a different problem.  How does a country go from roughly 65% broadband penetration in 2009, to a closer-to-universal model of access, in recognition of the growing role of the broadband internet in forms of social and economic inclusion.   Much of the answer, of course, is about pricing, but some gets at deeper and less tractable questions of skills, generational patterns, and broader, reinforcing forms of exclusion.  The latter will be the subject of an upcoming SSRC study.