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What Drives Broadband Adoption? An Aspen Institute Working Paper

WASHINGTON, December 5 – This report, authored by BroadbandCensus.com Editor Drew Clark for the Aspen Institute’s Communications and Society Program in August 2007, asks and attempts to answer a series of questions about broadband adoption.

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Drew Clark, Editor, BroadbandCensus.com

Editor’s Note:This working paper was originally written for the Aspen Institute’s Communications and Society Program’s August 2007 forum in Aspen, Colorado, in which the author participated. At the time, the author was Senior Fellow and Project Manager at the Center for Public Integrity. The paper was included in “A Framework for a National Broadband Policy” (PDF). Republished with permission of the Aspen Institute.

What do broadband users want? The ability to connect online through some form of access, obviously. Service that doesn’t cost a fortune, clearly. Fundamentally and personally, however, what do broadband users want by going online? Why do 47 percent of adult Americans subscribe to broadband? Conversely, why do a little more than half not subscribe? Why do subscribers keep paying their monthly bills? In considering a framework for a national broadband policy, what can we learn from considering broadband adoption trends, both quantitatively and qualitatively?

In this paper, two specific questions about broadband adoption are addressed. Both are framed in the context of also considering the availability of broadband access and the affordability of available choices; those topics are explored in other papers. For this paper, consider:
• What other factors, such as equipment subsidies and consumer education, are necessary for encouraging adoption?
• What applications—such as telemedicine, e-government, or online education—are likely to increase demand for highspeed broadband access?

Both questions are viewed from the lens of the individual broadband user to determine why individuals subscribe, or fail to subscribe, to broadband. In the first section, some of the quantitative and qualitative research about broadband adoption are surveyed. In the second section, I offer my own set of questions and personal answers about the combination of applications, education, experience, and other motivations that lead an individual to subscribe. The next section offers tentative conclusions about the broadband applications on the “supply side.” And, the fourth and final section, offers tentative conclusions about some aspects of directed “education” and “subsidies” that could potentially stimulate demand.

What Do Researchers Say about Who Subscribes to Broadband?

Research on broadband adoption shows that Americans are adopting broadband. Put aside, for the moment, the debate about whether the United States is adopting broadband as fast as other developed nations— or developing nations. The Pew Internet and American Life Project’s annual and semiannual surveys about broadband adoption show a consistent pattern of increase. Figure 1, from the June 2007 Home Broadband Adoption report, by John Horrigan, Associate Director for Research, and Aaron Smith, Research Specialist, shows the breakdown of broadband adoption across various demographic categories.

Figure 1: Trends in Broadband Adoption Across Population Subgroups (see PDF above for figures and tables)

Pew’s 2005 report argued that broadband adoption at home in the U.S. was “growing but slowing.” The 2005 report created the following model of broadband adoption:

• People do more things online the longer they’ve been online.
• Dial-up users are more likely to want broadband the longer they’ve been online.
• Not everyone wants broadband—and the people who do not want broadband typically have less online experience and are processing fewer bits.
• High-speed users switch to broadband to processmore bits, less so because of price.

Under this model, the decision to get broadband depends on the “intensity of Internet use,” which in turn is a function of time online and connection speed.69 Considering this model, Horrigan concluded in 2005 that although “years of online experience” may have driven broadband adoption in 2002, early in the growth phase, that was no longer the case in 2005.

On the one hand, this is not too surprising—early adopters, the “low hanging fruit,” have been picked. But it is important to recognize that there could be very different migratory patterns toward broadband. Internet use, rather than tapering off in recent years, could have continued its late ’90’s-early 00’s upward climb. Broadband prices could have been on the decline or network speeds might have improved substantially. That or other forces might have meant more switching from dial-up to high-speed and more adoption “de novo” of high-speed by new users.

Somewhat unexpectedly, the Pew 2006 report found home broadband adoption growing 40 percent from March 2005 to March 2006— twice the growth rate of the preceding year. Horrigan writes, “A significant part of the increase is tied to Internet newcomers who have bypassed dial-up connections and gone straight to high-speed connections. This is a striking change from the previous pattern of broadband adoption.” Among the factors, many of them new for that year, Horrigan identified:

• There was strong growth in broadband adoption by African Americans and by people with low levels of education.
• Digital subscriber line (DSL) market share increased, driven by aggressive price-cutting by DSL providers.
• About 48 million Internet users were posting online content, the majority of whom are home broadband users.
• Awareness about Voice over Internet Protocol (VoIP) increased 86 percent between February 2004 and December 2005.

Jump forward one more year, to the June 2007 report, and the adoption growth rate is down again. Figure 2 is Pew’s chart of year-to-year growth grates in home broadband adoption.

Federal Communications Commission (FCC) and Pew data from 2003 to 2007 show similar trends year-to-year growth grates in home broadband adoption. The number of “high-speed lines” (200 kbps in either direction) grew 32 percent, from 32.5 million on June 30, 2004, to 42.9 million on June 30, 2005. The number of such lines grew 52 percent, to 64.6 million, by June 30, 2006.

Figure 2:Year-to-year growth rates in home broadband adoption

Of those 64.6million lines (themost recent total fromthe FCC), 50.3 million served primarily residential end users. Of those residential broadband connections, the FCC reported that 55.2 percent of subscriptions were cable modem connections, 40.1 percent were asymmetric DSL connections, 0.2 percent were symmetric DSL or traditional wireline connections, 0.9 percent were fiber connections, and 3.7 percent were other types of technologies, including satellite, terrestrial fixed or mobile wireless (licensed or unlicensed), and electric power lines. The FCC says that broadband is available via DSL to 79 percent of local telephone company subscribers and via cable modem to 93 percent of cable television subscribers.

It is increasingly clear that there are two major groups of people who have not yet subscribed to broadband: dial-up users and non-Internet users.Dial-up usersmay be “happy dial-up users” because they get what they want out of their slower Internet experience. Alternatively, they may be frustrated dial-up users because of price or, more likely, availability constraints on broadband.

Non-Internet users have rejected the Internet experience, for whatever reason. Occasionally, as is evident in the spike of broadband adoption from March 2005 to March 2006, they can be lured directly to broadband subscriber status. Many, however, simply wish to avoid aspects of the Internet, such as pornography and the threat of various forms of identity theft.

Pew also has survey results on some of the reasons that individuals choose to take broadband, based on three separate surveys—January 2002, February 2004, and December 2005 (Table 1).

Table 1: Reasons for choosing high-speed Internet connection at home

The leading response to the survey: “Faster access/Greater speed” in January 2002 and December 2005 and “Previous connection was too slow/frustrating” in February 2004. The latter response may be effectively identical to the former. Indeed, at the spring 2007 meeting of the Aspen Institute Roundtable on Spectrum Policy, Andrew McLaughlin of Google gave a great definition of broadband: when a user isn’t constantly frustrated with the Internet experience.

If the goal is to get more people to subscribe to broadband, exclusive of considerations of availability and price, then happy dial-up users and non-Internet users are key groups to be targeted.

What Do Individuals Say aboutWhy They Subscribe to Broadband?

Understanding the demographics of broadband subscription begins to put some substance behind our key inquiry: How can individuals be motivated to subscribe to broadband?

The following model may be useful for thinking about this question:

1. Think of yourself: When did you subscribe to broadband in your home, and what led you to subscribe?
2. Think of other Americans, particularly the “happy dial-up users” and the “Internet rejecters.” How would a pitch to subscribe to broadband be targeted at them?
3. Think about individuals facing the prospect of adopting broadband in other parts of the world, such as China. It may be more exciting to consider a “fresher” market than the United States, with its more mature stage of broadband adoption.

Some questions to ask include:

• How long did you use the Internet before subscribing to broadband at home?
• How frequently did you experience the broadband Internet (i.e., at university, in the workplace) before subscribing at home?
• What companies were offering service to your home, what type of service were they offering, and at what price?
• What applications tipped the balance in favor of your subscribing to broadband at home?
• Were any other factors involved in your decision to subscribe to broadband at home?

Here are my own answers:

• I used a primitive form of Internet access, via an America Online dial-up connection, through a creaky Apple MacIntosh in February 1995. I first saw the high-speed Internet at Columbia University in August 1995. I finally subscribed to broadband on March 14, 2004—making nine years of Internet use before subscribing to broadband.
• I used broadband constantly at school, and then at work, in the years since 1995. My extensive use of broadband and work probably was a major factor in delaying my personal broadband adoption.
• I did not inquire about broadband availability in the homes and apartments I moved into in 1996 and 1997.When I moved to a home in 1999, I didmake an inquiry about DSL broadband availability (it was available), but I did not subscribe. When I decided to subscribe, I tried DSL, but the service did not work; I then subscribed to cablemodemservice. (I believe the price of DSL was $40,when included with traditional phone service; the price of cable modem service was $40, when included with basic cable television.)
• Saving money by subscribing to Voice over Internet Protocol (VoIP) service was the primary deciding factor in my decision to subscribe to broadband. I cancelled local telephone service and Internet service. A second motivating factor was the ability to get basic cable television programming—that is, assembling an ad-hoc “bundle.”
• A final factor motivating adoption was simple embarrassment: How could I be a decent technology journalist and not subscribe to broadband at home?

My responses offer one personal window on broadband adoption. I have asked the same questions of friends, neighbors, colleagues, and sources. I’d like to see and participate in ways to publish more of these responses. This kind of qualitative, even anecdote-driven, research also is instrumental in helping us better understand broadband deployment. Indeed, when I interviewed John Horrigan about this subject, I asked the same questions of him. He told me that he made the transition from dial-up to broadband in 2003 and that one of the factors influencing the decision was that his employer agreed to pay for a home broadband subscription. Cisco Systems is another company that pays the home broadband subscription costs as an employee benefit.

Broadband Applications on the “Supply Side”

Although speed frequently is identified as the reason for broadband subscription, my personal experience suggests that usually some particular application (or combination of applications) causes an individual to reach the tipping point. In my case, it was VoIP. Almost immediately thereafter, I installed a WiFi router, enabling broadband access anywhere in the house. That technology, in turn, facilitates a host of additional applications, any one of which could be the tipping point for others to subscribe to broadband.

Other heavily used high-bandwidth broadband applications in the Clark home include the following:

• Google Earth (Three-year-olds and seven-year-olds love it!)
• Educational videos and games
• Blogging
• Smugmug photo-sharing
• Video and audio streaming, including Internet radio
• Google Calendar for sharing schedules
• “Presence,” in the formof G-mail/instantmessage integration, etc.
• Online classes.

An application such as VoIP can prove successful in motivating a broadband purchase because it takes broadband off the desktop/laptop and into another device—such as a telephone—that is frequently used. I have been disappointed that equipment manufacturers and webcasters have not taken better advantage of opportunities to embed Internet radio applications into dedicated, IP-centric devices. Of course, the TV-PC convergence remains, after all these years, very much a work in progress. When I was watching an important cablecast that began to experience technical difficulties, I fired up my laptop and watched the webcast version of the program. Viewing on the larger TV screen was not possible, however.

In addition to IP-centric capabilities taking over telephones, radios, and televisions, such capabilities integrated into refrigerators, freestanding Webcams (whether for security or other purposes), or other household devices may reach those “happy dial-up users” and even some Internet rejecters. It is better to think about such applications in specific rather than general terms. In other words, diabetes patients or prospective diabetes patients may be motivated to subscribe to broadband to participate in a specific experimental trial but not to take advantage of “telemedicine” in general. The ability to enroll in a specific class may motivate a broadband purchase. The ability to do a job from home and avoid a commute is likely to be another key motivator in nudging broadband subscriptions upward.

Educating and Subsidizing for Broadband Demand

What forms of subsidization and education are necessary to stimulate demand for broadband? In the case of subsidization, consider various potential subsidizers: governments, employers, access providers, educators, and advertisers.

Subsidization of Internet services by the government or a business partner interested in advertising is central to many municipal wireless build-outs, including services to be offered by Earthlink in Philadelphia. In San Francisco, Google will subsidize a slower, ad-sponsored version of the wireless service. Other nationwide proposals, including that of M2Z Networks, contemplate free nationwide wireless Internet access through a 20 megahertz block of radio frequencies. As discussed above, employers play an important role—possibly a crucial role—in subsidizing their employees’ broadband use to facilitate work from home. According to a study by RVA Market Research for the Fiber to the Home Council, 13 percent of home fiber optic users work from home more often—a monthly average of 7.3 more workdays at home instead of the office. In most of these cases, having a fiber-optic connectionmade their employers’ attitude toward teleworkmore favorable.

Nevertheless, most discussions about subsidization deal with the Universal Service Fund’s (USF) system of cross-subsidization to broadband services offered by carriers, not subsidization of services or goods purchased by a consumer.

Equipment subsidies have received even less discussion. Here the question must be:What device to subsidize? Among the choices are the following:

• WiFi or other wireless-enabled laptops
• WiFi routers
• Wireless access devices (for non-WiFi fixed wireless services, such as a satellite dish in a rural area)
• Other standalone health- or home security-related IP devices.

Ironically, Congress has not chosen to subsidize any IP device at all. Instead, it has chosen to offer a $40 subsidy for a converter box that allows an analog device to receive digital television broadcasts. Aside from television, subsidies for equipment seem like a stretch for the government and for employers, for the simple reasons that prices are always dropping and government always seems to have more pressing priorities for its funds. Finally, worth noting is the fact that access providers routinely subsidize equipment (e.g., cable modems and wireless access devices) as part of a package of paid Internet service.

A final point for consideration is what kind of education consumers need to understand their broadband options. “Education” can include basics such as computer and Internet literacy. In most cases, this basic education is a prerequisite for home broadband use. Education also can include broader information about the true availability of broadband services in one’s area—as well as information about actual offers of service. The Center for Public Integrity’s Well Connected Project is engaged in one aspect of this effort: seeking to publicly display the names of each company that provides broadband within a particular ZIP code. If this effort is successful, it could enable consumers to see a complete list of all companies that offer broadband within their geographic area. The Federal Trade Commission (FTC) also intends to monitor the information that telecommunications and cable companies provide about high-speed Internet service in the service plans they offer to customers.

Broadband Breakfast Club:

Editor’s Note: Join the next Broadband Breakfast Club on Tuesday, December 9, 2008, on how broadband applications – including telemedicine – can harness demand for high-speed internet services. Register at http://broadbandbreakfast.eventbrite.com

Digital Inclusion

Samantha Schartman-Cycyk: Three Keys to Building Transformative Broadband Plans

‘While the federal government’s infrastructure funding creates unique opportunities, it also exposes challenges that states and tribes must get in front of to ensure that funding is sustainable and implementation is effective.’

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The author of this Expert Opinion is Samantha Schartman-Cycyk, President of the Marconi Society

This week, I am thrilled to join state, local and tribal leaders from across the U.S. as we convene in Cleveland, Ohio, for the Broadband Access Summit. As a local and long-time advocate for digital inclusion, I am proud that the Pew Charitable Trusts and Next Century Cities selected Cleveland, one of the least connected cities in the country, as the site for a timely conversation about how we can effectively spend the unprecedented levels of federal funding for broadband infrastructure.

While the federal government’s infrastructure funding creates unique opportunities, it also exposes challenges that states and tribes must get in front of to ensure that funding is sustainable and implementation is effective.

The good news is that digital equity is finally front and center—where it belongs—and it has taken nearly twenty years of advocacy and practice to get us to this point.

Following are three key lessons I have learned to ensure efforts to expand connectivity are community oriented and sustainable.

1. Bring in local leadership—now

Across the country, areas that have a dedicated local leadership responsible solely for digital equity and inclusion are outpacing their counterparts. Someone, or ideally a team, needs to wake up every day thinking about what digital equity means in their community, how to make a reality in a way that supports key priorities, and where the true needs are. We have seen benefits in cities such as Detroit and Seattle, who have taken this approach.

We must support these leaders with accurate data. At the Marconi Society, a nonprofit that champions digital equity, I helped launch the National Broadband Mapping Coalition to help leaders from rural communities and urban ‘digital deserts’ identify broadband gaps. The NBMC has developed a no-cost mapping toolkit to help educate and guide communities.

2. Plan for sustainability while you have strong funding

We need to anchor digital inclusion efforts to long-term state programs to solidify funding and reinforce the intersectional impact of digital inclusion. Typically, digital inclusion programs blossom within the period of investment but falter when funding runs out, only to peak again when new grants or federal money become available.

This process wastes resources, relationships, and time, resulting in stop-and-start programs that aren’t able to address residents’ needs nor build momentum.

For example, a state like Maine with an older rural population is likely to prioritize services that allow for aging in place and telemedicine care for seniors. States like Utah or Texas, with relatively young populations, might place a higher priority on education and K–12 STEM pipelines. This alignment will allow state leaders to prioritize and bake sustainability into their broadband plans, create digital equity programs that support their priorities, and incorporate data collection into their work.

3. Create the workforce your state will need

In order to implement strong broadband plans that create true digital equity, state and local governments need a pipeline of people who understand the unique intersection of technology, policy, and grassroots digital inclusion work needed to bridge the digital divide. As of last year, nearly 20 states did not even have a dedicated broadband office to begin this work. With funding already being dispersed to states, we are at a critical moment.

To help create this workforce, the Marconi Society conceptualized and is developing the first-ever “Digital Inclusion Leadership” professional certificate with Arizona State University. The program will launch in Fall 2022 and will include top-ranked professors and leading industry experts as teachers and advisors.

I believe that this interdisciplinary workforce will continue to be in high demand as states integrate digital equity into their long-term priorities.

After years of helping to lay the groundwork for the current burst of funding and activity around digital equity, I can say that our work has only just begun. We have the gift of beginning with knowledge and funding that can be truly transformative. The digitally equitable future we are fighting for is closer than it has ever been before—let’s make sure we get this right.

Samantha Schartman-Cycyk is President of the Marconi Society, a nonprofit organization dedicated to advancing digitally equitable communities by empowering change agents across sectors. Over her 20-year career, she has built forward-thinking programs and tools to drive impact on digital inclusion at the local and national levels, through projects with the National Telecommunications and Information Administration (NTIA), community training, and data collecting efforts. The Marconi Society celebrates and supports visionaries building tomorrow’s technologies upon the foundation of a connected world we helped create. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Broadband's Impact

Debra Berlyn: Online Shopping is Here to Stay for Older Adults

Helpful tips for safe shopping this summer.

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The author of this Expert Opinion is Debra Berlyn, executive director of Project GOAL

Summertime and online shopping can be easy – and safe – for everyone, particularly older adults.

As a result of the unexpected years of the pandemic, there has been a seismic shift in consumers’ adoption of technology to purchase products and services. There has also been a growing acceptance of technology by older consumers who were forced to adopt an online existence as access to the outside world around them quickly shuttered.

Today, the aging community is growing more familiar and comfortable with technology.

Consumers continue to embrace e-commerce, spending $871.78 billion in 2021 in online transactions, a growth of over 14% from the previous year.  The pandemic also served to increase these dollars, particularly among older adults who recognized the ease, convenience, and safety of shopping from home.

A significant overall force in the marketplace, the “buying power potential” of older adults, in general, has been growing in the past decade. In 2018, consumers 50 and older spent $7.6 trillion, accounting for 56 percent of overall U.S. spending.

For older adults, the significant shift from traditional brick-and-mortar stores to online retail continues to move forward. The 65+ community has jumped into the game and today they wield ever-increasing online retail power.

In 2020, many of those 65+ were averaging $187 in online shopping per month.  It’s also clear the online shopping habits that started during COVID-19 are not going to disappear anytime in the near or distant future.

Unfortunately, just as online spending has increased, so have the opportunities for fraudsters to build new tactics to scam significant dollars from unsuspecting online users.  All consumers need to have the proper tools to ensure they can feel confident when engaging in online retail.

In particular, older adults will benefit from having clear information on how to shop safe online.

Solutions for Older Adults to Engage in E-Commerce with Tips to Stay Safe and Additional Resources

Seven Tips to Shop Safe Online:

1) Always use a trusted online shopping “store” for your purchases and beware of phony online shopping sites that often reside on social media sites and may offer enticing prices.

Beware of phony online shopping sites and check out any unfamiliar stores with the Better Business Bureau. Consider trusted online stores like Amazon, which offers an A-to-z Guarantee for items purchased on their site that can help resolve issues with third-party vendors.

2) It’s best to use a credit card for your purchases.

If you purchase an item on your credit card, you can always then dispute that charge. Federal law limits liability to $50 if there’s an unauthorized charge to your account, and if you report it to your credit card company as soon as you discover it, they often will remove it entirely.

3) Make sure you’re on a secure site when entering financial information during your purchase transactions.

Always make sure you’re on a secure site before entering financial or other sensitive information. Look for the address bar “http” to shift to “https” when asked to input financial information, such as a credit card number. This indicates it will be transmitted securely.

4) Protect your privacy and security.

Engage the privacy settings, “cookies” choices, and clear your history on a regular basis to avoid unwanted marketing from companies.

5) Watch out for online “phishing scams” that can target older adults.

Scammers use email or text messages that look like they’re from a company you know or trust, such as your bank, credit card company, or an online store. Phishing emails request your personal information, such as a log-in or Social Security number to verify your account, or may ask that you update your credit card payment.  Then they use that information to steal your personal and financial information.

To avoid a phishing scam, carefully check the email address to see if it’s from the company (the email address is often incorrect or is off by a letter or two). Some companies have implemented email verification technology to make it easier to identify legitimate emails. For example, if customers see the ‘Smile’ logo next to emails coming from an @amazon.com sender, that will indicate that the email came from Amazon – not a scammer.

Click here to see if your email provider supports this technology. A dose of healthy skepticism is in order if you receive any unsolicited emails asking for your personal and/or financial information.

6) Keep this adage in mind: If it seems too good to be true, it probably is!

Be careful of unsolicited email come-ons and special deals that ask you to “click here.” They can take you to illegitimate sellers or scams.

7) Report any scams or fraud that you experience online.

Federal Trade Commission (FTC): Report a Fraud, Scam, or Problem with a Company:

For additional information on online shopping safety, check out these helpful websites: 

Debra Berlyn serves as the executive director of The Project to Get Older Adults onLine (GOAL), and she is also the president of Consumer Policy Solutions. She represented AARP on telecom issues and the digital television transition and has worked closely with national aging organizations on several internet issues, including online safety and privacy concerns.  She serves as vice chair of the Federal Communications Commission’s Consumer Advisory Committee and is on the board of the National Consumers League and is a board member and senior fellow with the Future of Privacy Forum. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Expert Opinion

Rahul Sen Sharma: The Metaverse is Not Web 3.0

The Metaverse is at the forefront of developments in seamless payments and richer information flows.

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The author of this Expert Opinion is Rahul Sen Sharma, managing partner at Indxx.

Web 3.0 is a concept for the next generation of internet architecture that envisions a decentralized ecosystem based on blockchain technology. It is an evolution of how users would control, own, and manage their online content, digital assets and identities.

Web 3.0 marks a departure from the centralized mega platforms and corporations that currently dominate the Web 2.0 ecosystem.

The Metaverse is at the forefront of the Web 3.0 internet revolution. It can be defined as a set of interconnected, experience driven 3D virtual worlds where users can socialize in real-time to form a persistent and thriving user-owned internet economy regardless of any physical or geographical constraints.

Both the technologies of Web 3.0 and Metaverse support each other perfectly. Even though the Metaverse is a virtual space whereas Web 3.0 favours a decentralized web, it could form the basis for connectivity in the Metaverse. While the development of the Metaverse is in nascent stages, the exponential growth of non-fungible tokens, P2E (Play to Earn) games and decentralised autonomous organisations have boosted the development of Web 3.0.

A future involving distributed and anonymous users

Web 3.0 envisions a future involving distributed anonymous users and machines interacting without the need for an intermediary, to form a composable human-centric and privacy preserving computing fabric.

These interactions would range from seamless payments and richer information flows, to trusted data transfers via a mechanism of peer-to-peer networks without the need for third parties.

The shift should lead to a wave of new business models that bypass the existing global co-operatives that we currently have, and replace them with decentralised, autonomous organisations and self-sovereign data marketplaces.

As mentioned, Web3 is built on blockchain technology and DAOs rather than the current model of centralized servers owned by large corporations. In the same way, the ideal structure of the Metaverse is also full decentralisation.

The technologies behind achieving decentralization would be distributed ledgers and blockchain technology which enables value-exchange between softwares, self-sovereign identities and the creation of a transparent and secure environment.

The blockchain is central to the Metaverse, and to Web 3.0

In an ideal form, both Web 3.0 and the Metaverse takes advantage of blockchain to give unrestricted, permissionless access to everyone with an internet connection.

Currently, development towards the Metaverse is being spearheaded by big tech corporations such as Meta, Microsoft, Nvidia, and more, all of which are major players in Web 2.0. The model of centralised Metaverse being built by them involves closed ecosystems that are only designed to extract value at the expense of their most valuable assets – users, content creators and customers.

This contrasts with the envisioned form of Metaverse and Web 3.0 with decentralization, interoperability and seamless interaction between different virtual worlds and the real world.

Still, the big tech corporations are investing resources into their Metaverse development and have their own vision and plans for what the Metaverse would be.

Meanwhile, decentralized Metaverses and Web3 initiatives are currently attracting record investment, pulling in around $30 billion in venture capital last year alone.

As we shift to what will likely be a more decentralized web, the creator economy is also evolving and likely to become a multibillion-dollar industry with immense potential for creators and publishers.

The creator economy in the Metaverse can supplement the vision of web 3.0 for developing a new financial world with decentralized solutions.

In Web 3.0, users can create content while owning, controlling, and monetizing them through the implementation of blockchain and cryptocurrencies. However, the model of this creator economy is likely to disrupt the business models of many current big-tech corporations.

Regardless, the Metaverse requires both big tech companies to build the technology and the creator economy to produce interesting content for driving engagement. Partnerships, reduced platform fees and creative commissions by big tech to creators within the metaverse can be a way to stimulate the already fast-growing creator economy.

Rahul Sen Sharma is a managing partner at Indxx and has been instrumental in leading the firm’s growth since 2011. He manages Indxx’s Sales, Client Engagement, Marketing and Branding teams while also helping to set the firm’s overall strategic objectives and vision. Prior to joining Indxx, Rahul was the Director of Investment Research for RR Advisory Group (now part of Mariner Wealth Advisors), a full service private wealth management firm based in New York that caters to high net worth individuals. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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