Was household internet adoption driven by the reform? Evaluation of the 2013 telecommunication reform in Mexico

In 2013 the Mexican Telecommunications and Broadcasting Reform was launched with the goal of promoting competition and access in the telecommunications sector. The aim of this paper is to evaluate whether the 2013 reform had an impact on household fixed internet adoption and to what extent Mexican households, classified into ten wealth groups, had adopted internet. For the assessment, after a revision of supply and demand Reform's measures to reduce the digital divide, data from the 2010 Census and 2015 Intercensal Survey were used to create adoption indexes using Poisson estimations. The results were analyzed by ten wealth groups, constructed on principal components based on household characteristics (type of dwelling, electricity availability, availability of drinking water, sewer system, internet and ICT devices: computer, telephone, cell phone and internet). Additionally, the impact of both indexes was validated by a difference in differences method. The results suggest a 66% overall increase in internet adoption between 2010 and 2015. The decile analysis showed considerable internet adoption in the low and middle wealth groups (deciles 2-8), while in the highest wealth groups (deciles 9-10) the impact of internet adoption has been relatively moderate. It is worth noting that internet adoption is unequally distributed, as less than 1% of households in deciles 1 to 6 had adopted internet in 2015, while nearly all of the wealthiest ten percent of households have internet access. Nevertheless the increment in internet adoption was not only the result of the reform but the combination of the broadband penetration trend and the reform together.