Evaluating the socioeconomic effects of a digital public policy: the case of FTTH deployments in Uruguay

Abstract

This research estimates the socioeconomic effects of the fiber-to-the-home (FTTH) program conducted by Uruguayan state-owned operator ANTEL. This company, that enjoys the monopoly of FTTH fixed broadband services, conducted an aggressive program of deployments across all the country since year 2011, until reaching 100% coverage in 2023 (with respect to those services supported by copper). These massive investments were motivated by the government universalization program to modernize the country’s infrastructures, rather than to seek an economic return. Callaway and Sant’Anna (2021) differences-in-differences estimators are applied to conduct the empirical analysis. Results indicate that the policy has been successful in generating an increase in average individual incomes. However, the evidence presented here also suggests mixed effects in inequality levels, possibly because deployments started first in the capital city of each department, then favoring those already well-positioned within each region. On the other hand, the effects on income levels have been heterogeneous, being able to extract more economic gains those regions with more educated people, those with enhanced digital environment, and those located closer to the capital city.

This research estimates the socioeconomic effects of the fiber-to-the-home (FTTH) program conducted by Uruguayan state-owned operator ANTEL. This company, that enjoys the monopoly of FTTH fixed broadband services, conducted an aggressive program of deployments across all the country since year 2011, until reaching 100% coverage in 2023 (with respect to those services supported by copper). These massive investments were motivated by the government universalization program to modernize the country’s infrastructures, rather than to seek an economic return. Callaway and Sant’Anna (2021) differences-in-differences estimators are applied to conduct the empirical analysis. Results indicate that the policy has been successful in generating an increase in average individual incomes. However, the evidence presented here also suggests mixed effects in inequality levels, possibly because deployments started first in the capital city of each department, then favoring those already well-positioned within each region. On the other hand, the effects on income levels have been heterogeneous, being able to extract more economic gains those regions with more educated people, those with enhanced digital environment, and those located closer to the capital city.