Advanced communications policy and adoption in rural Western Australia

Recent moves toward contestable universal service markets for rural areas r aises issues of measuring the net cost of service provision. Measurement of net cost requires estimates of latent demand for advanced communications. This paper seeks for the first time to provide quantitative estimates of th e magnitude of latent income pools available to carriers in rural WA. Estim ates of latent expenditure on broadband services in rural WA are obtained u sing a combination of stated-preference and survey data. These expenditures increase with computer ownership, community isolation and information need . Further, the statistical model supports the commonly held belief that mor e distant populations have stronger information demands and are willing to pay for services. This finding suggests that carrier aversion to providing services to rural regions may not be justified on commercial grounds. (C) 2 000 Elsevier Science Ltd. All rights reserved.