FCC and Pew Research Weigh in on High-Speed Internet Services
In July the FCC released its bi-annual High-Speed Services for Internet Access report which summarizes market activity through June 30, 2008, while in June the Pew Research Center released its yearly Home Broadband Adoption report which includes data through April 2009. The FCC report detailed high-speed Internet access services by technology type and provider at both the national and state level. The Pew Research Center report is a compilation of its Internet Project surveys which statistically sampled broadband access technologies used by households. Both reports come to the same expected conclusion, Americans are increasingly valuing faster Internet speeds.
The FCC classified high-speed Internet lines as lines with speeds of greater than 200 kbps of service in either direction (upload or download). Most of us would call that a really slow Internet connection and the FCC is currently in the process of redefining connection speeds as part of the Broadband Stimulus Plan. It is a safe bet that future versions of the FCC report will reference faster connection speeds.
For now though, according to the FCC, the growth of high-speed Internet service slowed during the first six months of 2008 and a larger percentage of the growth came in the higher speed tiers. Roughly 70% of the high-speed lines added came in a subset the FCC calls the advanced services lines—lines with more than 200 kbps in both directions. Within the advanced services lines subset, 46% of the growth came in connections with speeds of 2.5 mbps or greater in one direction—up from 35% at December 31, 2007.
The Mobile Wireless segment continued to be the fastest growing provider of overall high-speed Internet connections in the FCC report. This can be a bit misleading however. The majority of the mobile wireless high-speed connections in the FCC report exceeded 200 kbps in only one direction while the majority of DSL and Cable Modem lines offered speeds greater than 200 kbps in both directions with speeds up to 2.5 mbps and 10 mbps in one direction. If the FCC increased its high-speed threshold slightly, a large share of the mobile wireless connections would fall off the report.
The Pew survey, which surveyed household Americans above the age of 18, revealed growth of home broadband adoption regained steam in the first four months of 2009 after stagnating throughout 2008 as more Americans were willing to pay a premium for higher speed services. As a result, the average monthly cost for household broadband service increased from $34.50 as of May 2008 to $39.00 as of April 2009. Notably, the greatest broadband growth came from population subgroups with historically below average usage rates, including senior citizens, low-income Americans, high-school only graduates, Americans ages 50 to 64, and rural Americans.
Another interesting finding in the Pew survey was more than twice as many respondents cut back or cancelled cell phone service plans or cable TV service to save money during the recession than those that trimmed back on Internet service.
Both reports highlighted an increase in consumer choices for high-speed services. The number of zip-codes in the FCC report with more than one provider of high-speed services increased while a higher percentage of respondents in the Pew survey reported more than one high-speed service provider in their home area.
What about the non high-speed Internet users at home? In the Pew survey, 7% of Americans identified as dial-up Internet users, of those 32% said the price of high-speed Internet would have to fall for them to switch while 20% said nothing would get them to change. Of the 21% of American adults that are non-Internet users, 36% percent said they were either not interested in getting online, didn’t need the Internet, were too busy or think the Internet is a waste of time while 10% said it was too expensive.