Tag: internet

Political Implications of the Rise of Mobile Broadband Internet

Posted on February 8, 2021 | Policy Brief

Image of 5g broadband tower representing implications mobile internet

In the last ten years, the world has experienced the dramatic rise of mobile broadband internet brought by third-generation (3G) and fourth-generation (4G) mobile networks. This has resulted in major political changes – reduced confidence in governments around the world, lower voting shares of incumbent political parties, and the rise of populists. The empirical evidence is consistent with both the optimistic view of 3G internet (the “Liberation Technology”) and the pessimistic one (the “Disinformation Technology”). 3G internet helps to expose actual corruption; however, it also contributes to electoral successes of populist opposition.

The Spectacular Rise of 3G

Communication technologies have undergone a dramatic change in the last 10-15 years. According to the International Telecommunications Union (ITU), there were only 4 active mobile broadband subscriptions per hundred people in the world in 2007, while this number reached 75 per hundred in 2020. The growth of mobile broadband internet – provided by the third and fourth generation of mobile networks (3G and 4G, respectively) – was the main driver of growth in broadband access. The number of fixed broadband subscriptions per hundred people has only increased from 5 to 15 percent in the same period of time.

Relative to the previous generations of mobile technology, 3G provides a qualitatively different way of using the internet. First, it is broadband access on the go, available wherever the user is rather than at a fixed point at home or in the office. Second, it allows for downloading and uploading photos and videos. Before 3G, mobile technology only allowed exchanging text messages along with limited and slow access to the web. Third, it is the technology that is best suited for social media. While social networks started before 3G and were initially accessed on fixed broadband, today most Facebook, Twitter and YouTube users are mobile.

Liberation Technology or Disinformation Technology?

What are the political implications of the spread of this new technology around the world? Initially, political scientists were excited about the internet as a “Liberation Technology”, especially after it played an important role in the Arab Spring. Internet – and in particular mobile internet –helped pro-democracy activists in autocratic states to disseminate critical information about the government, expose corruption, and coordinate protests.

Later on, however, it became clear that social media also provided a platform for the dissemination of false news and hate speech – thus supporting the rise of populists. This led to a rethinking of the role of mobile internet – and rechristening it into a “Disinformation Technology.”

Which view, the optimistic or the pessimistic one, is correct? In Guriev et al. (2021), we study the impact of the expansion of 3G around the world on attitudes to government and electoral outcomes.

Exposing Actual Corruption

In order to explore the effects on confidence in government, we use data from Gallup World Poll surveys of 840,537 individuals from 2,232 subnational regions in 116 countries from 2008 to 2017. In each region and year we calculate the population-weighted average access to mobile broadband relying on the network coverage data from Collins Bartholomew’s Mobile Coverage Explorer.

First, we find that increased access to 3G internet causes lower confidence in government, judiciary, honesty of elections, and a lower belief that the government is not corrupt. As shown in Figure 1, the magnitudes are substantial. In our paper, we show that a decade-long 3G expansion has the same effect on government approval as a 2.2 percentage-point rise in the national unemployment rate.

Figure 1. Mobile Broadband Access and Government Approval.

Source: Guriev et al. (2021), Table 1, authors’ calculations.

This effect is only present when there is no online censorship and stronger when traditional media are not free. Furthermore, the spread of 3G makes people think that the government is corrupt when the actual corruption is high. In the cleanest countries of the world, the effect is actually positive – better access to information may help citizens to understand that other countries are much more corrupt relative to their own. 

This positive impact is, however, limited to about 10% of the world’s countries. On average, the effect of 3G on the perception that government is clean is negative (see Figure 1). There are two potential explanations. First, as suggested by Gurriv (2018), before the arrival of the fast internet, the elites controlled the media and, as a result, the public was not fully aware of the elites’ corruption. 3G helped to expose this corruption and corrected the pre-3G positive bias. The second explanation is related to the negative bias of social media where critical messages spread faster and deeper (see the references in Guriev et al. 2021).

Another potential explanation is that social media promote overall negative and pessimistic attitudes. We show that this conjecture is not consistent with the evidence: the spread of 3G does not reduce life satisfaction or expected future life satisfaction.

Helping European Populists

The evidence above is consistent with the view that mobile broadband internet and social media help to expose misgovernance and corruption. These findings are in line with the optimistic view of mobile broadband internet as a “Liberation Technology.” However, it turns out that the pessimistic view of “Disinformation Technology” may also be correct.

We examine the impact of 3G expansion on the outcomes of 102 parliamentary elections in 33 European democracies between 2007 and 2018. Using subnational data, we show that the spread of 3G, not surprisingly, decreases the vote share of incumbents substantially (see Figure 2).

 Figure 2. The impact of 3G expansion on incumbent vote share in Europe.

Source: Guriev et al. (2021), Figure VIII.

Figure 3. The impact of 3G expansion on opposition vote share in Europe.

Source: Guriev et al. (2021), Figure IX.

If incumbents lose votes, who picks them up? We show that the main beneficiaries of 3G expansion are the populist opposition parties, both on the left and right (Figure 3). The non-populist opposition does not gain.

Why do populists benefit from the spread of mobile broadband and social media? One explanation is that social media is decentralized and has no entry barriers. It is not the first time in history that populist politicians have relied on new communication technology to circumvent mainstream media controlled by the elites (e.g. the US late 19thcentury populists used telegraph and railroads, the Nazis in Germany used radio). It may also be the case that populist messages may be simpler, and thus, better suited for a short and catchy communication on social media. For example, another pan-European family of anti-system parties, the Greens, do not benefit from the spread of the 3G internet at all (see Figure 3): their narrative is more complex, asking voters to take responsibility for the planet.

Fact-Checking Alternative Facts

Many populist politicians point to actual corruption of the incumbent elites, but some also spread false narratives or “alternative facts.” (It was Donald Trump’s Counselor Kellyanne who, in January 2017, when asked to comment on false statements by Trump’s Press-Secretary about his inauguration, famously said that these were not falsehoods but “alternative facts.”) What can be done to stop the dissemination of these falsehoods on social media? Can fact-checking by mainstream media and independent organizations help?

In two studies, Barrera et al. (2020) and Henry et al. (2021), we carry out two randomized online experiments to identify the causal effects of alternative facts spread by populist politicians and their fact-checking. The findings are as follows: (i) alternative facts are highly persuasive; (ii) fact-checking helps to correct factual beliefs – but do not change voting intentions; even though the voters understand that the populists misrepresent the facts, they still support their agenda; (iii) fact-checking, however, substantially reduces sharing of alternative facts on social media; (iv) the impact of fact-checking on sharing is equally strong regardless of whether the users are forced to view the fact-checking information or are simply given an option to click on a fact-checking link; (v) asking users to re-confirm their intention to share alternative facts with an additional click greatly reduces sharing.

Our results suggest that fact-checking may not be as effective as fact-checkers themselves hope, but can help slow down the dissemination of falsehoods on social media. Furthermore, our analysis delivers clear policy implications – both providing fact-checking (even in the form of accompanying alternative facts with fact-checking links) and requiring additional clicks before sharing can be very effective.

Conclusion

The findings from our analysis of the worldwide spread of mobile broadband internet in the last decade are consistent with both optimistic and pessimistic views. On the one hand, 3G internet does help expose actual corruption. On the other hand, it helps populist opposition to gain votes. Likely, the latter result is eventually due to the populists’ abuse of online platforms for spreading disinformation. We show that the propagation of falsehoods on social media can be at least partially slowed down by fact-checking.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Focus on Investment: A Brief Look at Regulatory Developments in EU Telecommunications

Posted on April 15, 2018 | Policy Brief

20180415 Focus on Investment Image 01

The European Commission recently proposed a revision to its existing regulatory framework for telecommunications, the details of which have been amply discussed and are currently being negotiated. A pivotal theme of the revision is a stronger emphasis on stimulating investments into broadband networks capable of delivering high-speed (100+ Mbps) internet services. This brief highlights and briefly discusses some key changes in that regard.

Introduction

High-speed broadband networks are the backbone of the fast-growing digital economy. Promoting citizens’ access to such networks has been one of the European Commission’s stated policy priorities at least since 2010, when it launched its “Digital Agenda for Europe” (EC, 2014). Its policy mix of choice involves measures and funds facilitating deployment of so-called next-generation access networks on the one hand (commonly taken to mean access networks capable of delivering speeds exceeding 100 Mbps), while on the other hand regulating access to such networks to the extent perceived necessary to deal with potential problems resulting from incumbent network operators’ degree of market power. As regulation may harm incentives to invest in network infrastructure in the first place, a balance between investment promotion and competitive safeguards needs to be struck.

Motivated by what it considers to be a sub-optimally low speed of network upgrading in at least some of the EU’s member states, the Commission has sought to adjust its policy balance in favor of investments by proposing a revision (EC, 2016) of its regulatory framework for electronic communications, called the European Electronic Communications Code (EECC), which defines a standard approach to regulating fixed broadband network operators deemed to possess significant market power. That revision has been commented upon and discussed by the European Parliament and the European Council as well as various private and public stakeholders (Szczepański, 2017). Several amendments have been proposed and further discussion is ongoing to reach a compromise between the European institutions.

Background

Telecommunications networks were until more recently typically owned by vertically integrated, often formerly state-run, national incumbents who even after their privatization and the elimination of most legal barriers to entry were considered to possess significant market power. The EECC’s key remedy to such market power is so-called network unbundling at the wholesale level: considering the retail market for internet service provision potentially competitive, unbundling means granting competing internet service providers regulated access to the incumbent operator’s physical local-area access network, which is commonly regarded as the key bottleneck in internet service provision. Choosing the intrusiveness of the access obligation is up to the national regulatory authority (NRA), ranging from merely demanding that the incumbent publicly post a reference offer, to stricter measures such as non-discrimination, “fair and reasonable” pricing, and ultimately, full-on access price regulation, typically implemented with price caps derived from regulatory costing models. A recommendation from 2013 (EC, 2013) outlines methodological guidelines to national authorities.

Key changes

The proposed EECC revision makes the abovementioned recommendation binding, which may partly be an attempt to further harmonize regulatory practice between member states, with a view to encouraging cross-border investments by operators and service providers. It also encourages NRAs to, where possible, abandon more rigid price regulation in favor of margin squeeze tests. Margin squeeze occurs when a vertically integrated firm with market power in the wholesale segment of a production chain “squeezes” retail competitors by setting high wholesale and low retail prices, to the extent that even equally efficient, or at least reasonably efficient, retail competitors cannot survive if they are dependent on the dominant firm’s wholesale product. Moreover, and more importantly in terms of boosting deployment, the proposal encourages lighter-touch regulation for operators deploying new network infrastructure (Art. 72), and specifically relaxes regulation for deployment projects open to co-investments between operators (Art. 74). It also extends the market review period, i.e. the frequency at which NRAs are expected to update their market analysis and regulatory policy, from three to five years, giving operators a longer planning horizon, and encourages NRAs to consider any existing commercial wholesale offers in their market analysis, which can be interpreted to mean that anything short of full market foreclosure should be looked upon benevolently (Articles 61 and 65). In line with this latter development, which suggests a focus on wholesale access per se, is Article 77. This article exempts so-called wholesale-only networks – non-integrated networks whose very business model is selling access to interested internet service providers – from strict access price regulation, at least ex-ante. Typically, a presumption of consumer harm absent regulation is sufficient for intervention. Article 77 turns the tables on regulatory authorities by requiring evidence of actual consumer harm.

A counterpoint to these deregulatory elements is Article 59.2, which under certain conditions not only allows but obliges NRAs to impose access obligations on owners of existing physical infrastructure “up to the first concentration point”, in practice affecting mostly in-building wiring and cables, even when these owners have not been identified as dominant in any relevant market. In countries such as Sweden, where in-house wiring is often not owned by any operator but rather by the respective building’s owner(s), implementing such obligations may pose a regulatory challenge.

Finally, Article 22 requires NRAs to chart existing infrastructure as well as deployment plans across the country and enables them to define “digital exclusion areas” where no high-speed broadband infrastructure exists or is planned. In such areas, they may organize calls for interest to deploy networks, also with a view to resolving potential coordination problems between operators resulting from so-called “overbuild risk”: deployment in some lower-density areas may only be profitable if most of the customer base in that area can be captured, leading to a standoff between operators who cannot, do not want to, or are not allowed to communicate and coordinate their deployment strategies. As a result, investment is delayed.

A rather piquant detail here is that the proposed code allows NRAs to take action against operators it suspects of “deliberately” providing “misleading, erroneous or incomplete” information about their deployment plans. Included to prevent gaming, this provision carries the risk of suppressing investors’ appetite for the designated exclusion areas lest they be punished in case they change their mind. A minimum of mutual trust between the national regulator and market participants seems crucial for this mechanism to succeed.

Conclusion

The Commission’s proposed new regulatory framework emphasizes investment in, and take-up of, high-speed (100+ Mbps) broadband networks, explicitly defining such enhanced connectivity as a new regulatory objective on equal footing with the existing ones, most notably the promotion of competition. The present brief points out some key regulatory changes aimed at the fulfilment of these respective objectives. In terms of the revision’s impact on high-speed broadband deployment in the EU’s member states, it is difficult to make a general prediction since Europe is somewhat heterogeneous with respect to high-speed broadband penetration. For example, the 2016 EU overall NGA coverage was 75.9 % of households, but coverage rates of individual countries ranged from 99.95 % and 99.86 % in Malta and Belgium respectively to 47.0 % in France and a mere 44.2 % in Greece (EC, 2017). To the extent that the new code encourages investment relative to the old regime, regions with lower current coverage stand to benefit more. To the extent that the lower pace of deployment in those areas is the result of other factors orthogonal to regulation (one example being demand uncertainty), it will have a limited effect.

References