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Report: U.S. Broadband Adoption Slowing

Price, lack of access remain barriers to new customers

By Martin H. Bosworth
ConsumerAffairs.Com

July 7, 2008 

That's according to the Pew Internet and American Life Project, which has just published its latest report on broadband Internet adoption across the United States.

According to lead researcher John Horrigan, overall broadband adoption increased by 17 percent from May 2007 to May 2008, but the levels of adoption between different income levels and ethnic groups were distinctly different. Among the Pew report's findings:

• Broadband adoption grew from 82 percent to 85 percent from 2007 to 2008 in households with annual incomes above $100,000, indicating a saturation point for upper-income Americans.

• African-American respondents with broadband connections increased from 40 to 43 percent from 2007 to 2008, which indicated little or no serious overall growth when factoring in the margin of error.

• Older Americans represented a strong area of growth for broadband Internet adoption, with a 26 percent increase from 2007 to 2008.

• Older Internet users also accounted for a large section of the respondents who use dial-up Internet and have not switched to broadband. 62 percent of the respondents who used dial-up Internet access said they would not switch to broadband connections. 35 percent of the respondents cited the higher prices of broadband access as a barrier, while 14 percent cited lack of available broadband Internet service in their area.

The report also confirmed that users who have "always-on" or multiple ways to access the Internet, such as laptops enabled with Wi-Fi access, will make more usage of the Internet's resources, whether they are early adopters or recent subscribers.

"Those with high demand for internet applications get fast connections and do more with them. It is also true that many who get broadband at home are drawn to online alternatives available with their 'always on' connection, sometimes as a substitute for offline resources," the report said.

Addressing the digital divide between those who have access to high-speed Internet and those who do not has become a matter of public debate, with technology advocates and consumer rights groups calling for a national broadband policy to promote wider adoption and availability of service across the country.

The United States has consistently ranked far behind other developed nations for overall national broadband adoption, which critics charge is due to a marketplace consisting mostly of incumbent telecom and cable companies who prefer to compete in wealthier areas while ignoring rural and lower-income regions.

The Federal Communication Commission (FCC), the government agency most directly responsible for promoting and monitoring broadband access policy, has routinely been criticized for using faulty data to measure actual levels of broadband adoption across the country, which has even led members of the commission to criticize the agency for hampering potential economic development through high-speed Internet access.

FCC chairman Kevin Martin, addressing a meeting of the Organization for Economic Cooperation and Development (OECD) on the Internet economy in South Korea, defended the Bush administration's policies on broadband adoption and access as successful.

"I have made and continue to make decisions at the FCC based on a fundamental belief that a robust, competitive marketplace, not regulation, is the best method of delivering the benefits of choice, innovation, and affordability for American consumers," Martin said.

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