  An acceleration in the growth of communications bandwidth in use and a rapid
reduction in bandwidth prices have not accompanied the U.S. economy's strong
performance in the second half of the 1990s. Overall U.S. bandwidth in use has
grown robustly throughout the 1990s, but growth has not significantly
accelerated in the second half of 1990s. Average prices for U.S. bandwidth in
use have fallen little in nominal terms in the second half of the 1990s. Policy
makers and policy analysts should recognize that institutional change, rather
than more competitors of established types, appears to be key to dramatic
improvements in bandwidth growth and prices. Such a development could provide a
significant additional impetus to aggregate growth and productivity.
