Broadband availability

Americans have been adopting broadband, or high-speed Internet access, but one important question is whether they have been doing it fast enough. Broadband is an increasingly important part of the economy and daily life, but is unavailable or unaffordable to many Americans. Still, the Pew Internet & American Life Project’s annual and semi-annual surveys about broadband adoption show a consistent pattern of increase. In 2005, 30 percent of Americans subscribed to broadband in their homes, and those numbers had risen to 42 percent in 2006 and 47 percent in 2007. The exact degree of broadband penetration in the U.S. is unclear due to a lack of publicly available data, as is how much complete broadband penetration would cost if done by the public or private sectors.

Current broadband availability policy changes
On July 24, 2007, Sen. Dick Durbin (D-Ill.) began hosting an "open legislation" initiative on the OpenLeft.com and RedState websites. He engaged in several nights of live-blogging and will post draft legislation online for comments and feedback before filing a bill. (Congresspedia is building a knowledge base for the effort here.)
 * See OpenLeft's website for the Durbin posts and comments.

President George W. Bush had stated on April 26, 2004 that broadband deployment was a national priority, saying "I'm talking about broadband technology to every corner of our country by the year 2007 with competition shortly thereafter." FCC Chairman Kevin Martin, who was appointed FCC commissioner by President Bush in 2001 and became agency chairman in 2005, has repeatedly said that broadband is his number-one priority.

Arguments about broadband availability and expanding it

 * Free Press' collection of pieces Community Internet:
 * "High-speed Internet access is fast becoming a basic public necessity — just like water, gas or electricity. But far too many Americans find themselves on the wrong side of the digital divide, unable to get connected or afford expensive commercial service. Community Internet is an effective way to address America's broadband problem on the local level."

General availability of broadband in the U.S.
Research on broadband adoption shows that Americans are adopting broadband.

Current availability of broadband as of 2008
For the period Q1 to Q2 of 2008 Point Topic Ltd. estimates that the U.S. ranks 19th in broadband penetration by population, at 25.78%, and 18th for broadband penetration by household, at 66.6%. In an effort to better understand how the figures for broadband penetration are arrived at, and to demonstrate the elusiveness of hard facts in this area, I have performed my own research, and calculations, to try to emulate Point Topic’s findings.

For Q2 of 2008 Point Topic estimates the number of broadband subscribers at 78.7 million. To verify this figure I found that the Organization for Economic Co-operation and Development (OECD) figures for broadband penetration in the U.S. for Q2 of 2008 closely resemble Point Topic’s at 75 million subscribers. The U.S. Census Bureau estimates that the U.S.’s population stood at 305.5 million people, as of Jan 1, 2009. These two figures taken together put the percentage of the total U.S. population that subscribes to broadband at 25.76%, which is close to Point Topic’s figure of 25.78%. However, if we exclude the 25.8% of the population that is too young to legally enter into a contract (under 18) that brings the percentage of the population that subscribes to broadband in the U.S. to about 31.71% (a difference of 78.8 million people). Then if we divide 78.7 million broadband subscribers by the average household size of 2.56 [(owners + renters)/2] people we arrive at 30,742,187 households, and then by dividing the number of households by the estimated number of occupied units (111,609,629 in the 2005-07 dataset) I arrived at an estimated 27.54% of U.S. households subscribing to broadband. This figure of 27.54% households subscribing to broadband is nowhere close 66.6% estimated by Point Topic. Yet another source, the Pew Internet & American Life Project states that 55% of adult Americans have high speed Internet (broadband?) at home. Still another source, the Leichtman Research Group, states that as of Q2 – 2008 “57% of US households (at the time of the survey) subscribed to a broadband service”. As you can see the numbers vary because different researchers approach the subject from different angles and trying to match the figures is difficult if not impossible.

If we are lucky the big telecommunication companys will not quash the Center for Public Integrity's Freedom of Information Act lawsuit and the American public will finally have some concrete facts about the penetration/distribution of broadband in our country.

The Pew Internet & American Life Project’s annual and semi-annual surveys about broadband adoption show a consistent pattern of increase. The latest “Home Broadband Adoption” report of June 2007 shows that 47 percent of Americans receive broadband in their homes.

Pew’s 2005 report argued that broadband adoption at home in the U.S. was “growing but slowing.”

Pew’s 2005 report created the following model of broadband adoption:
 * 1) People do more things online the longer they’ve been online.
 * 2) Dial-up users are more likely to want broadband the longer they’ve been online.
 * 3) Not everyone wants broadband – and these are typically people with less online experience who are processing fewer bits.
 * 4) High-speed users switch to broadband in order to process more bits, less so because of price.

Under this model, the decision to get broadband depended upon the “intensity of internet use,” which in turn is a function of time online and connection speed. Considering this model, Horrigan concluded in 2005 that while “years of online experience” may have driven broadband adoption in 2002, early in the growth phase, that was no longer the case in 2005.

It was somewhat unexpected, therefore, that the Pew 2006 report found home broadband adoption growing 40 percent from March 2005 to March 2006 – twice the growth rate as the year prior. “A significant part of the increase is tied to internet newcomers who have bypassed dial-up connections and gone straight to high-speed connections. This is a striking change from the previous pattern of broadband adoption.”

Among the factors, many of them new for that year, that Horrigan identified:
 * Strong growth in broadband adoption by African Americans and by those with low levels of education.
 * Increasing DSL market share, driven by aggressive price-cutting by DSL providers.
 * 48 million Internet users posting online content, the majority being home broadband users.
 * Awareness about Voice over Internet Protocol shot up 86 percent between February 2004 and December 2005.

Federal Communications Commission data over the same period of time shows a similar trend. The number of “high speed lines” (200 kilobits per second in either direction) grew 32 percent, from 32.5 million on June 30, 2004, to 42.9 million on June 30, 2005. The number of such lines grew 52 percent, from 42.4 million to 64.6 million, by June 30, 2006. Of those 64.6 million lines (the most recent total from the FCC), 50.3 million served primarily residential end-users. And of those residential broadband connections, the FCC reported 55.2 percent of subscriptions were cable modem connections, 40.1 percent were asymmetric digital subscriber line (DSL) connections, 0.2 percent were symmetric DSL or traditional wireline connections, 0.9 percent were fiber connections, and 3.7 percent were other types of technologies, including satellite, terrestrial fixed or mobile wireless (licensed or unlicensed) and electric power lines.

The FCC says that broadband is available via DSL to 79 percent of local telephone company subscribers, and via cable modem to 93 percent of cable television subscribers. It is increasingly clear that there are two major groups of people who have not yet subscribed to broadband: dial-up users, and non-Internet users. Dial-up users may be “happy dial-up users” because they get what they want out of their slower Internet experience. Or, they may be frustrated dial-up users because of price or, more likely, availability constraints on broadband. Non-Internet users are those who have, for whatever reason, rejected the Internet experience. Occasionally, as was seen in the spike of broadband adoption from March 2005 to March 2006, they can be lured directly to broadband subscriber status. But many simply wish to avoid aspects of the Internet, such as pornography, and the threat of various forms of identity theft.

How the United States ranks in broadband availability
In global surveys of countries' per-capita broadband usage by the International Telecommunications Union, an arm of the United Nations, the U.S. fell from 12th in 2004 to 16th in 2005 before rising to 15th in 2006. The U.S. currently ranks number 12 among the smaller group of developed countries that constitute the Organization for Economic Cooperation and Development.

External resources:
 * Craig Aaron, "Baloney has a First Name: It's R-O-B-E-R-T" (blog post), SaveTheInternet.com blog, July 25, 2007.
 * Robert M. McDowell, "Broadband Baloney" (op-ed), Wall Street Journal, July 24, 2007.
 * "OECD Broadband Statistics to December 2006" (report), Organization for Economic Co-Operation and Development (OECD), December 2006.
 * Richard Wray, "Broadband spreads across globe," Guardian, June 13, 2007.
 * S. Derek Turner, "Shooting the messenger" (pdf), Free Press, July 2007.
 * Jeff Nolan, "Lies, Damn Lies, and Statistics" (blog post), Venture Chronicles, July 18, 2007.

Rural vs. urban broadband penetration
As of July 2008 according to the Pew Internet & American Life Project, there has been a growth rate of 23% from 2007 to 2008 of broadband users in rural America. Thirty-eight percent of rural dwellers admit to having a broadband connection at home.

This is different from urban dwellers where 57% admit to having a broadband connection. Expanding those boundaries to include suburban inhabitants there is closer to 60% broadband market penetration.

Competition in the broadband private sector
External resources:
 * "New Report Busts Telco Myths about U.S. Internet," SaveTheInternet.com Coalition', July 19, 2007.

Economic benefits
Research conducted on the Economic benefits of Broadband Availability in the U.S, American communities with broadband access did significantly better than those without broadband access.

The United States Department of Agriculture, Economic Research Service; The Economics of Food, Farming, Natural Resources, and Rural America in a recent publication, "Rural Broadband At A Glance, 2009 Edition" published in February 2009. The report states Broadband's Relationship to Rural Businesses, broadband internet enables businesses to increase efficiencies in existing commercial relationships and also increase competition between businesses.

Online business activity provides rural businesses with these benefits due to broadband internet access:

1. Direct sales from manufacturers to consumer available on a broader scale.

2. Business-to-business transactions over the Internet have increased. By 2003, online wholesale trade of farm products had already sold $3.7 billion or approximately 3% of all wholesale farm product sales, while online wholesale had reached $386 billion or 13% of all wholesale trade.

3. Rural retail business Internet users found that broadband access allowed them to increase operational effectiveness and exploit market niches.

The report states Broadband's Relationship With Rural People and Households allow rural residents to access goods and services. Rural residents have been influenced by Broadband internet with shop comparison and research in regards to automobile, and real estate purchases.

The report also lists Economic Benefits:

1. Teleworking and increased marketing opportunities generate jobs and economic development.

2. Reducing time off work due to decreased travel time to access specialist care.

3. Lowering the cost of travel to receive care.

4. Increasing revenue from pharmacy and lab work that can be conducted locally.

5. Reducing costs to health facilities by outsourcing specialized medical procedures.

Costs of extending broadband
External resources:

Broadband expansion costs depend upon the technology used for providing the broadband service. Expansion often involves construction costs associated with laying fiber to the building of wireless base stations. Considerations for cost of expansion of broadband infrastructure also include items such as geographical landscape, population density, permits, lease arrangements, environmental impact reporting, and maintenance. For instance, a major consideration for laying fiber will be whether the fiber will be placed within an urban or rural community. It has been estimated to cost anywhere from $16,000 a mile for rural expansion to $500,000 a mile for urban expansion. Obvious considerations also include whether trenching through rock or soil, or hanging fiber on poles. The Federal Highway Administration publishes a telecommunications information package that outlines cost considerations for laying or constructing telecommunication infrastructure.

Costs of extending broadband with fiber
In major cities the cost of laying fiber runs around $250,000 a mile, in suburban areas it is about $150,000 a mile (or more depending on the city), and in rural areas about $100,000 a mile. This cost estimate only reflects the burying of the fiber itself. Then there is the cost of environmental impact studies, project planning, zoning and right of way fees, and the disruption of the surrounding community. As of 2006 the cost of laying fiber in rural Wisconsin, where it is flat with little rock, ranged from $35,000 to $56,000 a mile. Because high cost of deployment and the low population density (few potential subscribers) of rural communities the telephone and cable companies have chosen not to run the middle mile fiber needed to supply the rural communities with broadband. Even though fiber is designed for a useful life of 25 years eventually it will degrade and have to be replaced at an even higher cost than it is now due to inflation and additional infrastructure that would be disrupted in the future. In urban, and many suburban areas conduits are buried and the fiber is run through them to avoid the high cost of burying more fiber when future expansion is needed or the fiber needs to be replaced. However, currently the most common method of laying fiber in longer cross-country installations, such as those to rural communities, is direct burial by plowing them in or laying them in a trench and burying it using steel armored outdoor fiber cables. Even though this method is quicker and less expensive than running conduits, which cost an additional $5,00 to $15,00 a mile, it provides less protection for the fiber cable and insures the eventual greater expense of having to bury another fiber cable when they reach the end of their useful lives (because of inflation and additional infrastructure disrupted). In addition, if, or when, the need arises for more bandwidth to the rural community the expense of burying more fiber cabling will cost more (inflation/infrastructure). This added future expense of laying new, or replacing old, fiber makes the case for the installation of conduits in all fiber installations. However, here is the hitch, whoever installs the conduits to pull the fiber through owns the conduit (urban, suburban, or rural). Any competitors wanting to bring service to a community have to go through the expense of installing their own conduits, and at the same time disrupting the surrounding infrastructure, yet again, incurring further costs to the market entrant and the surrounding community. These costs would be even more prohibitive to the market entrant because they would now have to compete against an incumbent broadband provider, and I believe we all know how that would go given the incumbent Bell companies’ track record. Do you think I am joking? It has gotten so bad that a telco has actually filed suit against a municipality in Monticello, Minnesota for deploying their own fiber network (that the telco refused to install) on the grounds that, get this, they were saving Monticello from themselves because, “such projects have failed in other communities and we're hoping to prevent the citizens of Monticello from becoming the shareholders of a $25 million tax burden. Just because an incumbent broadband provider has a naturally occurring monopoly does not mean they will structure their services, or prices, or even act, in the best interest of the communities they are serving. Now, at this point my question is how much has the stifling of competition and lack of quality broadband service cost the American public and businesses over the years? What are the true costs of extending, or the lack of extending, broadband?

Using wireless broadband to expand availability
A major option for expanding broadband services to underserved regions has been the use of wireless broadband based upon the IEEE 802.11y Wi-Fi standard. This standard operates over the 3.65 GHz band. A major advantage for the use of this standard is this region of the wireless spectrum is “lightly licensed.” This means that operators within this region of the spectrum pay only a fraction of what other operators may pay in other regions of the spectrum. This standard also meets the FCC requirement contention based protocol allowing multiple users to access the same spectrum. One challenge to the use of this spectrum is the limitations placed upon its use within 150-kilometers of a satellite communications site.

Another option for wireless deployment has been the advent of the use of WiMAX, which typically operates in the 2.5 GHz band. Equipment vendors have expanded the technology to include operations within the 3.6 GHz and 700 MHz bands. A major disadvantage to deployment of WiMAX is the expense of deployment of the technology in a licensed spectrum band.

Network neutrality
As defined by Google, A Guide to Net Neutrality for Google Users, Network neutrality is the principle that Internet users should be in control of what content they view and what applications they use on the Internet without restrictions or limitations mandated by the Internet Service Provider. The broadband carriers should not be permitted to use their market power to discriminate against competing applications or content. Today, the neutrality of the Internet is at stake as the broadband carriers want Congress's permission to determine what content gets to you first and fastest.

Research conducted from the Open Internet Coalition, Net neutrality was a founding principle of the Internet, and was the law of the land until 2005. The courts and the regulators changed the rules in 2005 when they eliminated the nondiscrimination requirements that had applied for decades to phone service and, up to that point, to most residential Internet access. Implementing net neutrality is a return to the basic principles that make the Internet work for consumers and innovators.

The Open Internet Coalition which consist of over 75+ supporters, promotes consumer choice and economic growth through an open internet where everyone can access what they want then they want it.

The National Association of Telecommunications Officers & Advisors (NATOA) has adopted and released formal Broadband Principles encouraging the immediate development of a National Broadband Strategy. One of the ten broadband principles is Network neutrality is vital to the future of the Internet.

External resources:
 * "By Ten to One, Public Urges FCC to Protect Net Neutrality," SaveTheInternet.com Coalition', June 18, 2007.

Expanding availability by blending the private sector and public sector
Even though I am not a supporter of the major telcos and cable companies’ way of doing business, suppressing competition and/or providing inferior service, and/or being deceptive , I do not feel unbundling is the answer to increasing broadband competition. Instead, I feel Rita Stull has come up with an excellent middle ground solution with her Joint Underground Location of Infrastructure for Electric and Telecommunications (JULIET) project. JULIET would be the equivalent of the interstate system but for power and communication cabling. JULIET (publicly owned conduits) would be installed in trenches during any right of way construction (e.g. roads, bridges, sewer, gas, steam, railroads, etc) and existing utilities, on poles, would be transferred to the conduits. There would be four immediate (incremental) returns on this investment. First the government could charge tenant fees (just like the taxes and fees used to pay for the upkeep of the interstate system), based on linear foot occupied, to recover the cost of installation, to pay for maintenance/operation/management, and to extend the conduit to new areas. Second, the need for telephone/power poles would be eliminated and the cost of their ongoing maintenance would be a savings because the underground conduits would last longer. Third, the need for FEMA funds to replace the poles after major storms would be eliminated (a considerable ongoing cost). Forth, having the conduits already in place would eliminate the need for further digging thus reducing street/highway maintenance costs because eliminating cuts in the roadway would extend their useful life. With the conduits already in place it would reduce the cost of fiber deployment by 60 – 70 % that would make it more economically feasible for new market entrants to compete with the incumbent telcos, cable, and wireless companies.

Due to the deception and misuse of public grants, subsidies, and tax breaks by the incumbent telcos I would propose that the government eliminate their grandfathered protected status and make them compete on even ground with other carriers.

There are a couple of aspects of Ms. Stull’s plan that I would like to clarify and/or change. Ms. Stull suggests moving the current utilities on poles to JULIET installations. She also points out that due to its enormous capacity it is important that America has FTTP(x) installed wherever possible. Which brings me to the observation that any space in the JULIET installations should be reserved for fiber only. No copper lines should be transferred from the poles to JULIET. If cable companies have fiber installed to the node as they say they do then this should not be an issue, they can compete over fiber just as well as the telcos. DOCSIS 3.0 is a only stopgap measure to extend the life of existing plant investments for cable companies just like DSL was for the telcos. Next Ms. Stull’s plan would be to install publicly owned FTTP in JULIET as it is installed. Then she states that the telcos could buy the publicly owned FTTP at wholesale rates. Then in the next statement she plans to lease the FTTP to phone, cable, and wireless companies. I see a potential problem here. What would prevent the incumbent telecoms, with their deep pockets, from buying up the majority of the bandwidth (remember the incumbent telcos are into wireless too, except Quest). The same situation applies to the leasing option. I think that JULIET should be designed with enough excess capacity to handle additional fiber well into the future and let the companies run their own fiber lines and be responsible for the upkeep of their cables and equipment. Then perhaps place a minimum QoS for the use of the JULIET conduits so the space is not wasted on an inferior system. Overall I think Ms. Stull’s plan is a good one. I will not address her licensing requirements, or the fees involved, because they are outside of the scope of this section.

Recent broadband legislation
The telecommunications policy landscape has recently been dramatically reconfigured by two major events: the collapse of the telecommunications overhaul legislation of 2006, and the Democratic takeover of Congress. The bill, the Communications Opportunity, Promotion, and Enhancement (COPE) Act of 2006, was far-reaching bill that affected many areas of telecom policy.  House Republican leaders were the driving force behind the bill, as were the Bell companies. AT&T, BellSouth (since merged with AT&T), Verizon and Qwest Communications International and their lobbying arm, the U.S. Telecom Association, had made passage of the bill a key legislative priority. It would have allowed the Bell companies to string cable television wires without having to get approval by local governments. However, the bill also had the support of many Democrats, as was illustrated by the 321-101 vote it received to pass the House.



The Senate's version of the COPE Act, S.2686, died in the Senate after an amendment to require "network neutrality" – a prohibition on Internet providers speeding up or slowing down Web content based on its source, ownership or destination – tied 11-11 in committee. The vote took place after a massive grassroots mobilization by the SavetheInternet.com Coalition in favor of preserving network neutrality. After the committee vote the bill received little action and legislators turned more specifically to the issue of broadband penetration.

Related SourceWatch resources

 * Communications, Science and Intellectual Property Policy (U.S.) portal.
 * Broadband data - the public availability of broadband data, especially that which is collected by the FCC.
 * Network neutrality legislation
 * Spectrum

External resources

 * The website of the SaveTheInternet.com Coalition.
 * SaveTheInternet.com's blog