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January 22, 2009

Both Demand and Supply Issues for Broadband

By Gary Kim, Contributing Editor

With the likelihood growing that at least some amount of additional support will be going into existing efforts by the U.S. government to support rural broadband, it might be worth noting that "demand" is as much, if not more, an issue than "supply." In its most recent surveys on the subject of consumer broadband adoption, researchers at the Pew (News - Alert) Internet & American Life Project found that of the nine percent of U.S. adults who use dial-up access, about 14 percent indicated they would buy it if it were available "where I live."
Presumably these respondents are not fully aware of all available broadband options, as satellite broadband is available nearly everywhere in rural America, while something on the order of 93 percent of rural cable operators say they offer cable modem service.
Still, 35 percent of dial-up users say price is an issue, indicating they might be aware of broadband availability in their areas.
Of the quarter of respondents who said they do not use the Internet or email, about 33 percent said they simply were not interested in doing so. About 13 percent reported they could not get access to the Internet or email. That could indicate any number of perceived barriers other than PC ownership.
About four percent of respondents indicated they do not own a PC. But nine percent thought using the Internet and email was "difficult." About seven percent said they were "too busy" to use the Internet.
Overall, about 51 percent of respondents who use dial-up, or who say they are not interested in the Internet, cite "relevance" as the reason they do not have broadband at home. And perhaps 66 percent of non-adopters have reasons other than availability for choosing not to buy broadband services.
Still, Pew researchers also note that 24 percent of rural dial-up users say they cannot get broadband where they live.
If the stimulus allows faster speeds, as well as new coverage, perhaps a third of current broadband users might be candidates to buy a faster service. Pew researchers say 29 percent of broadband users say they already pay for home broadband speeds that are higher than the "standard" packages advertised by their carriers. In other words, they buy higher-speed tiers.
The remaining 71 percent buy the standard packages or don’t know whether they pay a premium.
Assuming new higher-speed broadband services are added, Pew researchers estimate that at least one-third of home high-speed users are good prospects. The point is that there are both demand and supply issues here.
Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users. Today’s featured white paper is Fixed Service Strategies for Mobile Network Operators, brought to you by Comverse.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Michelle Robart

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