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Digital Divide and Public Plans: Governance Modes and Their Impact on Broadband Universal Service Provision

This article analyzes the public plans’ effect on reducing digital divide in small towns. The main dependent variable is the digital divide gap between small towns and the rest of their region during the period of the analysis. The analyzed public policies are subsidies for private telecommunication operators and public ownership infrastructure policies. Some public infrastructures have a private management while others have a public one. The main contribution in this article is to evaluate regional and national policies effects on the broadband digital divide analyzing their impact on small towns. The empirical evidence shows that public ownership infrastructure under private management policy and subsidies for the private telecommunication operator policy have effects on reducing the broadband digital divide. However, public ownership infrastructure under public management policy does not have any effect on the broadband digital divide reduction. Additionally, the public ownership infrastructure policy was the only policy applied to small municipalities with higher previous digital divide in their regions. The analysis uses the Difference-in-Differences (DID) approach to compare policy effects on the broadband digital divide in Spanish small towns from 2002 to 2009.