Growth in the 'New Economy': U.S. Bandwidth Use and Pricing Across the 1990s

Telecommunications Policy

Posted: 6 Dec 2000

See all articles by Douglas A. Galbi

Douglas A. Galbi

Federal Communications Commission

Abstract

The U.S. growth experience in the 1990s and the perceptions of a new economy contrast sharply with trends in bandwidth use and pricing across the 1990s. Dramatic increases in bandwidth use and dramatic reductions in bandwidth prices that were predicted to occur in the second half the 1990s did not occur. While bandwidth in use has grown strongly throughout the 1990s, the growth rate has not significantly increased in the second half of 1990s. Reductions in bandwidth prices, in sharp contrast to reductions in computer prices, have not accelerated in the second half of the 1990s. With respect to communications bandwidth, the development of a new economy, and any associated impact on macroeconomic growth and productivity, appear to be still yet to come. Dramatic changes in bandwidth growth and pricing are likely to depend on stuctural changes of the sort outlined in the author's papers on transforming network interconnection and transport, which are available on SSRN.

JEL Classification: E23, D24, L5, L99

Suggested Citation

Galbi, Douglas, Growth in the 'New Economy': U.S. Bandwidth Use and Pricing Across the 1990s. Telecommunications Policy, Available at SSRN: https://ssrn.com/abstract=243654

Douglas Galbi (Contact Author)

Federal Communications Commission ( email )

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HOME PAGE: http://www.galbithink.org

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