The Three Broadband Gaps

One of the three traditional legs of the digital divide is broadband availability. I think there are three distinct broadband gaps that together define the broadband availability gap – the rural broadband gap, the urban affordability gap, and what I call the competition gap.

Everybody knows about the rural broadband gap. I don’t need to say a lot about this because the whole industry is currently fixated on solving the lack of rural broadband through the various major grant programs.

There is also an urban affordability gap where large numbers of homes and entire neighborhoods in cities don’t have a good broadband option that people can afford. While there has been increasing attention to this problem, we are a long way from addressing the issue. There has been a lot of recent attention about the possible demise of the Affordable Connectivity Program (ACP), which gives discounts that are supposed to help solve this gap. But even if the ACP continues, it’s just a band-aid that cannot solve the urban affordability gap – prices from cable companies and other ISPs have grown out of reach of too many households, even with a subsidy.

Nobody is talking about what I call the competition gap. Most places in the U.S. have only one ISP that can deliver fast broadband of speeds greater than 100/20 Mbps. Why does this matter? It is becoming clear that the majority of people and businesses nationwide want relatively fast broadband. OpenVault reported that in June 2023, only 11% of broadband users in the country are subscribing to broadband products with speeds under 100 Mbps. Only 27% are subscribing to broadband products with speeds under 200 Mbps. Almost 32% of homes nationwide are now subscribed to gigabit broadband. This represents a huge shift, and as recently as June 2021, 20% of broadband users were buying speeds under 100 Mbps, and 68% of homes were buying speeds under 200 Mbps. In June 2021, less than 11% of homes were buying gigabit broadband.

It’s clear that residential customers are willing to buy products with faster speeds. There will be a few ISPs who respond to this blog with the observation that the quality of broadband connection matters more than speed – but that is clearly not what the public thinks. An ever-increasing number of residential customers are willing to pay a premium price to get faster broadband.

The only widespread gigabit broadband technologies available are hybrid fiber-coaxial networks operated by cable companies or fiber. There are a few other fast broadband technologies like the fiber-to-the-curb technology that Verizon operates as 5G Home Plus. There are other technologies that are faster than 100/20 Mbps but which don’t deliver the gigabit speeds that people want. The relatively new FWA cellular broadband is capable today of delivering speeds of between 100 and 300 Mbps within a mile or so from a cellular tower. Some WISPs are upgrading to newer radios that can deliver speeds far in excess of 100/20 Mbps, although most WISP networks still use older technology.

The bottom line is that in most of the country, the only place with real broadband competition is where an ISP with fast technology overbuilt a cable company. There is a lot of fiber construction underway, and the number of neighborhoods with two choices of fast broadband is growing. But it’s still not unusual to find entire counties where nobody has a choice of two fast ISPs. The majority of people in the country still have little or no real competition.

Many ISPs will dispute the lack of choice and say that most folks have multiple choices of ISPs. This is backed up by the FCC broadband maps. If you look at most homes and businesses in the FCC maps, there are multiple ISPs claiming to be able to serve almost every address. I’m sure that the FCC will issue a new broadband report to Congress one of these days, bragging about how great the broadband choice is across the country. The FCC maps show that I have a choice of ten ISPs at my home. But the options available to me are mostly not viable. Most of my choices are DSL, satellite broadband, and cellular broadband – and from that list, only Viasat claims 100 Mbps download speed.

There are real consequences of having only one fast ISP in a city or a neighborhood. When there is only one fast ISP, that company holds a virtual monopoly. There are clearly documented consequences of being served by ISPs that have a virtual monopoly. We know that monopoly providers tend to have higher prices, less than stellar customer service, and technology that is not as up-to-date as competitive neighborhoods.

I know that the competition gap is real since my consulting firm conducts a lot of broadband surveys. In every survey we’ve done for many years, at least half of respondents say they want increased competition – which for most people means a choice of a second fast ISP. Far too many households and businesses lament that they only have one practical choice of broadband.

I hear from communities every day that are served by a cable company but want faster broadband. Regardless of what the FCC says or ISPs claim, folks are unhappy to live in communities with no broadband choice. The competition gap is real and is going to become more apparent over time as county seats see the rural areas around them getting fiber while they are stuck with an older coaxial network.

7 thoughts on “The Three Broadband Gaps

  1. A significant limitation of the current US model is that it relies exclusively on infrastructure competition, something which is slow, capex-intensive and inefficient. What is lacking is a requirement for those infrastructure operators with local monopolies, perhaps at city of even state level, to be required to offer wholesale options. This would ensure that there can at least be competition between ISPs at retail level, even if they are utilising the same local network infrastructure for connection to premises.

  2. This is completely on point. When we moved to a rural suburb of Huntsville, AL in 2011 there was one provider: Mediacom. Over the next few years we got to know several of their field techs because they were at our house at least once every month or two. I lost track of the number of times they replaced the line from the pole to the house, the splitters, the cable from the NID to the modem, or the modem itself. Every time the power glitched or went out, we had to unplug the modem and the TIVO devices and then start plugging things in one at a time starting with the modem because nothing would sync up on its own. We tried switching to U-Verse at one point when ATT told us they could serve our home. Turns out they couldn’t… even though they tried three times. We were more than 5,000 feet from the pedestal in which the DSLAM was installed. A no go. Google Fiber and other companies were all over Huntsville, but not out where we lived. Finally, ATT built fiber in our neighborhood. We still have an occasional issue, but by and large I’ve been surprised at how well ATT Fiber has worked. It’s still not cheap – our promo pricing expired after a year and we’re up to about $90 a month for Gig service (non-symmetrical). Throw on another $130 a month for DirecTV Stream and we’re still paying $220 a month… that used to be a car payment. ATT did recently upgrade us to a WiFi 6 modem so we could get better speeds in the house (even though I had to call and ask them for it). And they replaced the modem for free (even though we still pay that $10 or whatever it is a month for the modem charge).

    All this is to say, ATT fiber broke the Mediacom monopoly in our neighborhood and A LOT of our neighbors switched. We’d suffered for years with poor cable service. ATT isn’t perfect, but they are a HECK of a lot better than what we had.

  3. Ha, I feel targeted by that one sentence 🙂 Which is good. But I would just like to insert that the public is largely not aware of what they want, they are aware of what they have been heavily marketed to. I have not found one single person in years of doing this that when explained the difference between Cable 600Mbps and Wisp 25Mbps doesn’t fully understand and willingly takes the Wisp service. The problem is consumer education. I absolutely agree that 100Mbps should be a minimum target, and acknowledge that is a hard target to hit as a Wisp. You better really care about your network, because a Wisp has a lot more moving parts. But it can be done on a much more shorter timeline than fiber. I read a survey the other day, can’t remember where, but ISP clients we’re more likely than previous to choose a local smaller provider because of better support. A Wisp that cares, delivers 50-100Mbps packages, and owns the home WiFi system is going to have a lot going for it. Throw in the ability to do dedicated bandwidth to local businesses and your good. A solid 100 Mbps will get you through the next 5 years. Plenty of time to get ready for >100Mbps services, and sure, go ahead and offer 250-500 plans now already for those few folks that demand the highest speed regardless of any sane reason why they need it. I find that those few subs like that are good for an ISP. They help you find issues before mass marketing those plans to everyone.

    Ask any person, as many as you like, why they need 1Gbps. I promise you, you will not find more than 1% who have any clue why. And then ask them what they get at peak time in the evening on their 1Gbps connection. It just frustrates me to hear this “oh the consumers are proving they want and are willing to pay for faster service.” No. They. Don’t. They are uneducated and are reaching for anything because they have crappy service now. They have been programmed for years with ad after ad shoved down their throat about needing faster speeds. If we had marketed latency as hard as we have speed, we would not be having this conversation, I would bet a weeks pay on it. Marketing absolutely works. And this blog is just perpetuating that. I would dearly love to see metrics from cable companies on how much bandwidth their clients use. Max and average numbers for peak times. I see download amounts listed sometimes but have never seen peak numbers. What is the peak Mbps of a normal house on a service >500 Mbps. The bulk download numbers that get posted do tell a lot of the story. Our subs on 25 and 50 Mbps track only a slight bit behind the national average of monthly download amounts. Most likely because the urban areas have a slightly higher propensity to spend more time inside on the internet than rural clients, not because they are requiring more peak speeds.

    TL;DR, you cannot take mass marketing over years and years and use the direct results of that as proof that the people want what has been marketed to them. That is bogus research. People will follow where they are led.

  4. I forgot to mention, I agree with the assessment of 3 gaps. I think the government funded last mile should be focused on the urban areas lacking good service. It’s the hardest to penetrate with wireless. Density demands massive capacity, and the urban buildings + trees/vegetation make it very difficult to service without using some sort of wired technology. Take all the bead money and put it into those areas. And if an area only has one wired provider, get a second one in there. As a country we’re going to blow a tremendous amount of money getting fiber to my home. And I have 100Mbps from our Wisp now and at any time if I felt like it I could bring that up to 500 or more.

    2 wired providers for urban areas and better middle mile for rural would be the best solution for our money. We can worry about last mile rural fiber in the next go around

  5. Oh, and one other thing. For the love of money, get the cellular carriers to make their crap work. I have a dual sim TMO and Verizon phone and there are huge areas of our county where I can’t do more than make a very sketchy phone call or sometimes text message only. I’m talking about right beside the busiest interstate in northern California, and I have to stand in one spot and poke my tongue just right into the wind to hopefully get service on one of my 2 SIM’s just to make a call. The bill comes every month for the service though… It is beyond frustrating. It worked much better before the 4G then 5G upgrades. It’s literally worthless now

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