Friday, September 3, 2010

Broadband Penetration in the U.S.: Saturated, Recession-Affected, or Pricing Out Many?

In addition to providing a better sense of what specific broadband service options consumers have in more narrowly drawn geographic areas, the FCC’s most recent statistics on broadband show a significant decline in new subscriptions. See INTERNET ACCESS SERVICES: STATUS AS OF JUNE 30, 2009 (September 2010); available at: June 2009 FCC BB Stats.

The Commission also reports that as of June 2009 there were 61 reportable residential fixed-location connections per 100 households, with 56 connections per 100 households operating at advertised whose speeds in excess of 768 kbps downstream and only 27 connections per 100 households operating at advertised speeds near the broadband availability target--actual download speeds of at least 4 Mbps and actual upload speeds of at least 1 Mbps--recommended in the National Broadband Plan.

Does a downturn in new broadband statistics point to market saturation? It sure seems as though major broadband carriers are content with their subscription numbers. For example, Comcast recently raised by $2 both its service tiers. In light of the comparatively high rates charged in the United States, $30-60 a month, a significant portion of Americans do not appear willing to pay. Alternatively, current economic conditions might have forced prospective users to hold back.

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