The Industry

Cox to Use Coop Fiber Network

As recently as a few years ago, I was able to say that the large ISPs never used networks owned by somebody else. But that is no longer the case, and we’re starting to see partnerships with big ISPs spring up around the country.

The most recent announcement of a fiber partnership is between Cox and the Indian Electric Cooperative in Oklahoma. The cooperative is building a fiber network to connect its substations and other key electric system components to fiber. The cooperative will lease the remaining fiber capacity to Cox to provide last-mile broadband connections to cooperative members. The partnership will start in the small town of Fairfax, with the intention of going cooperative-wide, if possible.

The cooperative is borrowing the money to pay for the first 80 miles of fiber backbone. The coop has already applied for grants and expects to aggressively pursue more grant funding. Cox will pay for the infrastructure to connect customers as well as all of the electronics. There are also several tribes located in parts of the coop area, and the coop hopes that some of the tribes will pursue grants and follow the same partnership model.

The announced partnership model is that Cox will pay a fee to the cooperative for every customer connected to the network. In rural areas with no other broadband alternative, it’s hard to think that this won’t eventually mean 70%, 80%, or more of households getting broadband through the partnership.

This kind of partnership makes sense for both parties. The cooperative gets a modern smart grid network that is going to be essential in the long run for all electric grid. Smart grids protect against outages, allow for faster repairs when there are problems, and allow for the seamless integration of alternate energy sources – something that is a lot harder than might be imagined.

Cox gets access to customers but saves on building the expensive fiber distribution network that goes up each street. It becomes a lot more feasible for Cox to consider rural markets when it doesn’t have to cover all of the construction costs. Both parties benefit from grant funding, which can reduce the cost of fiber to make a feasible business case.

These kinds of partnerships with giant ISPs are still not common, but they are popping up more and more. CenturyLink (now Brightspeed) is sharing a municipal network built by the City of Springfield, Missouri. Windstream announced a deal similar to this one with an electric cooperative in Georgia. Consolidated Communications has partnered with some cities in New Hampshire. Mediacom is placing fiber in the conduit system built by the city of West Des Moines, Iowa. I’m aware of discussions of several other partnerships with big ISPs that are under consideration.

The biggest hangup for these kinds of partnerships is that the big companies are highly leery of using a fiber network where somebody else operates the electronics, controls the installation process, or maintains the network. It’s a lot harder to attract a big ISP partner if the network owner wants to keep control of the fiber deployment and maintenance.

There are a lot more partnerships being formed between municipalities, cooperatives, and smaller ISPs. I’m aware of dozens of such relationships and wouldn’t be surprised to find that there are hundreds of partnerships operating, with many more underway due to grant funding.

The Industry

Broadband for Low-Income Housing

In April of this year, Kathryn de Wit of the Pew Charitable Trusts released what I consider to be the definitive article defining the broadband gap in low-income housing. I’ve discussed her paper before, but as we finally approach the start of the BEAD grant process, I wanted to highlight the findings from her report. While BEAD grant funding is supposed to be available to bring broadband to unserved and underserved homes everywhere, I have to wonder how much funding will be provided in most states to tackle this issue – which is mostly found in cities.

I think its universally understood that homes need broadband to take part in modern life. Just in my own life, it seems that month after month and year after year, that more of the functions I do now involve broadband. Just one example, I recently had some doctor visits, and a lot of the process is now online to register prior to the visit and to get my results from lab tests. This was not part of the process for my doctor just a year ago – but seemingly everything we do is migrating online.

Pew interviews with low-income households showed that some of the most important benefits of broadband for low-income homes include reduced isolation and increased social connection, support for aging in place, access to education, health care and wellness, job training, financial services, and the opportunity to apply for and find jobs. Several major studies have documented the positive impact for students who have broadband and computers in the home.

The Pew paper describes the lack of broadband for low-income housing as being the result of several issues. First is that ISPs, in many cases, are not building fiber or other modern infrastructure to subsidized housing. When an ISP builds fiber near a low-income apartment building, it often bypass the building and don’t offer fiber. While ISPs won’t publicly say it, this is due to an expectation of low returns on the investment of building a fiber drop, wiring the units, and providing the electronics.

Another issue is a shift away from community technology centers – places where WiFi broadband and computers are made available to the public. This is a movement that was already underway before the pandemic and which became the norm during COVID shutdowns. This means there must be a bigger emphasis on getting broadband and computers into living units.

But the biggest issue continues to be affordability. Pew research from 2021 showed that 43% of households with incomes under $30,000 did not have a broadband connection – which compares to 8% for homes with incomes over $75,000 per year. 45% of people without home broadband said they can’t afford a monthly broadband subscription, and 37% said they can’t afford a computer. The household income issue is even more acute in public housing, where the average household income in a 2016 study was just over $14,000 per household.

A large survey conducted by the NTIA of homes without broadband showed that the average amount that those living in subsidized households said they could afford was just $10 per month, although over half of homes said they couldn’t afford any amount. A 2021 survey by Everyone On shows that 40% of households with incomes of $50,000 said they can’t afford broadband, while 22% said they could afford to pay as much as $25 per month.

As you might imagine, there are a lot of challenges in getting better broadband to public housing:

  • Broadband subscriptions are not included in the HUD utility allowance. This is a funding mechanism that covers electricity, gas, and water fees in public housing. It’s time to recognize that a broadband subscription is a household need and not a luxury.
  • While BEAD grants theoretically cover bringing broadband to apartment buildings that need it, it’s a challenge to prove the areas are underserved since urban maps often claim ubiquitous broadband coverage from cable companies. The BEAD process is also incredibly unfriendly for filing grants for small areas like a single building due to the complexity of the requirements.
  • ACP funding has allowed many low-income households to get broadband. But unless Congress acts soon, that fund will run dry by next spring. The ACP rules also require individuals to apply for the subsidy. In a low-income housing building, everybody qualifies for ACP by definition, yet there is no mechanism for enrolling a building in ACP. Most other benefits for low-income housing are funded by the building instead of by individual tenants.

I’ve predicted for the last several years that the next big push for broadband connectivity will be in cities. As states start allocating rural grants for BEAD, it will likely become obvious that little has been done to help most cities. I think this is going to be a harder issue to solve than the rural broadband gaps because the big cable companies are going to fight anybody that tries to bring broadband into what they consider as their turf – even where they aren’t serving. But if the goal is to get everybody onto broadband, this is an issue we need to tackle and solve.

The Industry

Reflecting on AT&T

I was talking to somebody about AT&T recently – we both worked at the company before the divestiture of the company into the Baby Bells in 1984. This set me to contemplate the odd path the company has taken since the days when it was perhaps the premier U.S. corporation.

AT&T was divested as a long-distance company in 1984 and thrown into a competitive environment where long distance rates and revenues plummeted. AT&T’s fortunes and status decreased to the point where SBC, Southwestern Bell, was able to acquire the company in 2005 while keeping the AT&T brand name.

The reunited Baby Bell companies and AT&T were far diminished from the days when AT&T was at the top of the world. SBC and the other Baby Bells started to cut back on the maintenance and upgrade of copper infrastructure soon after the divestiture. The companies felt emboldened to do this since divestiture also brought the beginning of telephone deregulation. The big telcos were no longer strictly required to meet quality and performance standards, and they responded by trimming technicians and capital repair and upgrade budgets.

During the 1990s, AT&T turned its attention to becoming the largest cellular carrier. The company spent most of its capital in the 1990s on cellular networks, which was timed perfectly with the explosion of the cellular business where practically everybody in the country came to have a cellphone. But even in the cellular world, AT&T didn’t put as much money into its cellular infrastructure and spectrum as its competitors. When AT&T won an exclusive contract to market the iPhone in 2007, it quickly became clear to customers that the AT&T (Cingular at the time) network was inadequate.

AT&T next made several devastatingly bad investments. It bought DirectTV, which then lost half of its customers in a few ensuing years. AT&T was also apparently trying to keep up with Comcast when it spent $100 million to buy Warner Media. A few years later, AT&T unspun this deal and recognized a $47 billion loss to shareholders.

In the last decade, AT&T has been forced to spend a lot of money to upgrade its 4G and 5G networks. While cellular performance has improved dramatically for consumers, 5G still looks like a business plan looking for a revenue stream. Over the last decade, cellular competition has resulted in lower cellular prices for consumers, and it can be argued net 5G revenues for the industry have been a big negative. And now, the biggest cable companies are siphoning off valuable cellular market share.

AT&T and the other big telcos might also be facing an expensive effort to remove lead cables from the environment. Smaller telcos mostly replaced lead cables a long time ago, but it seems the big telcos never quite got around to getting rid of the lead.

AT&T has finally gotten serious over the last few years about building last-mile fiber networks for the future. The company built 500,000 fiber passings in the second quarter of this year to bring it up to 20.2 million fiber passings – with a goal to reach 30 million by the end of 2025. AT&T added 272,000 fiber customers in the second quarter to bring the company to over 7.7 million fiber subscribers. The company is still losing non-fiber customers and dropped 25,000 net broadband customers in the second quarter.

AT&T is late to the game compared to its cellular competitors in selling FWA cellular broadband and just rolled out its Internet Air product in April of this year. AT&T CEO John Stankey characterizes the company’s FWA plans as being used to replace copper infrastructure and perhaps to bid on BEAD grants in remote areas. But for now, the company is far behind Verizon and T-Mobile in selling cellular home broadband. But AT&T recently announced it now signing a ‘few thousand’ FWA customers daily.

It not particularly easy to equate AT&T with some of the recent events in the company, because for all practical purposes, the company has been run by folks from SBC. But a lot of mistakes have been made in AT&T’s name, and it’s somewhat sad to see how far the company has fallen since the early 1980s. AT&T has made mistakes that would have sunk a lot of other businesses, but it is still diverse enoughto generate the cash to keep trying over and over again.

The Industry

The Causes of Network Outages

The Uptime Institute (UI) is an IT industry research firm that is best known for certifying that data centers meet industry standards. UI issues an annual report that analyzes the cause of data center outages. The causes for data center outages is relevant to the broadband industry, because the same kinds of issues shut down switching hubs and Network Operations Centers.

The following table shows the underlying cause of the network outages in 2022 that were severe enough to be publicly reported.

Cabling 9%
Capacity Issues 6%
Cooling 6%
Fiber Cut 17%
Fire 7%
IT Software Issues 18%
Network Connectivity 12%
Power 9%
Cyberattack 11%
Third Party 7%

UI cautions that it is somewhat skeptical of the stated reasons for outages since data center owners are notorious for lack of transparency. The report says that a large portion of outages are caused by human error and management failures. An increasing number of major outages are caused by cloud, collocation, ISP, or hosting companies.

Of growing concern is cyberattacks and ransomware, which accounted for 11% of major outages. These outages are often lengthy and can lead to contamination and loss of integrity of stored data. UI says that one of the reasons for increased security breaches is an increasing reliance on industry-standard operating systems and remote monitoring, which both create homogeneous systems that are easier for hackers to understand and breach.

6% of known outages in 2022 were ranked by UI as severe, meaning there was a major and damaging disruption of services, including large financial losses, compliance breaches, customer losses, and safety issues. Another 8% were considered to be serious, meaning the outage was still damaging.

The number of overall major outages is about the same as 2019 when the annual reports were first generated – in spite of the huge amounts of resources being spent to improve technology, software, and physical redundancy.

One interesting warning from the report is that UI cautions businesses not to rely on Service Level Agreements (SLAs) that promise 99.9%+ reliability. Many data center providers fall short of that level of performance, which is prossibly the reason for the lack of transparency.

Following are the major outages in 2022 by sector. Of particular concern to readers of this blog is telecommunications, which has seen a huge increase in the percentage of total outages since 2019.

Cloud / Internet Giant 19%
Digital Services 30%
Financial Services 7%
Government 7%
Telecommunications 32%
Transportation 5%
The Industry

Cable Customer Losses in 2Q 2023

Leichtman Research Group recently released the cable customer counts for the largest providers of traditional cable service in the second quarter of 2023. LRG compiles most of these numbers from the statistics provided to stockholders, except for Cox and Mediacom – they now combine an estimate for both companies. Leichtman says this group of companies represents 96% of all traditional U.S. cable customers.

The traditional cable providers continue to lose customers at a torrid pace, losing over 1.6 million customers in the second quarter, slightly fewer losses than the second quarter of 2022. Overall, the traditional cable providers lost over 17,700 customers every day during the quarter. The overall penetration of traditional cable TV is now around 46% of all households, down from 73% at the end of 2017.

2Q 2022 Change Change
Comcast 14,985,000 (543,000) -3.5%
Charter 14,706,000 (200,000) -1.3%
DirecTV 12,350,000 (400,000) -3.1%
Dish Network 6,901,000 (197,000) -2.8%
Cox & Mediacom 3,340,000 (100,000) -2.9%
Verizon 3,155,000 (70,000) -2.2%
Altice 2,405,900 (69,900) -2.8%
Breezeline 296,952 (3,732) -1.2%
Frontier 267,000 (21,000) -7.3%
Cable ONE 158,100 (8,900) -5.3%
   Total 58,564,952 (1,613,532) -2.7%
YouTube 5,900,000 200,000 3.5%
Hulu Live 4,300,000 (100,000) -2.3%
Sling TV 2,003,000 (97,000) -4.6%
FuboTV 1,167,000 (118,000) -9.2%
Total Cable Company 35,733,852 (916,632) -2.5%
Total Telco / Satellite 22,673,000 (688,000) -2.9%
Total vMvPD 13,370,000 (115,000) -0.9%

It doesn’t look like people are replacing traditional cable with an online alternative like YouTube and Hulu Live – which collectively lost 115,000 customers in the quarter.

Charter is still losing customers at a slower rate than other traditional cable companies. At current trends, Charter ought to have the most cable customers soon – something that could not have been imagined only three or four years ago.

The biggest news is that Comcast is one of the biggest percentage losers, and the biggest overall loser, down 543,000 cable customers in the quarter. The biggest percentage losers continue to be Frontier and Cable ONE.

The Industry

If BEAD Isn’t Enough

There are several States already estimating that the BEAD grant funding is not going to be enough money to reach all of the unserved and underserved areas. California, New Mexico, and Minnesota have estimated that BEAD will fall short. By the time the dust settles there will likely be more states.

I’m not surprised by this. Just since the BEAD grant program was enacted by the Infrastructure Investment and Job Act in November 2021, there have been some significant cost increases for building broadband networks. Network design engineers are telling me that costs have gone up in most places by 20% to 25% over the last two years. Part of this comes from inflation, which has driven up the cost of materials and labor. But a lot of the increase comes from perceived labor shortages in the industry, which has prompted construction contractors to raise prices faster than inflation.

The BEAD grant process also adds significant costs in some markets. I’ve done the analysis in some states where having to pay prevailing wages will increase the cost of a network by 10% to 15%. BEAD has other requirements that add significant cost. For many smaller ISPs the cost of obtaining a letter of credit is going to be expensive. There are environmental studies required for grant projects that add costs.

The various cost increases mean that BEAD funding won’t cover nearly as many locations as might have been supposed by whoever determined that $42.5 billion was enough money. As unbelievable as it sounds, we might have needed a BEAD pool of $60 billion or more to provide the same coverage as $42.5 billion in 2021 construction costs.

I think the problem is a lot larger than folks suppose because all of these estimates begin with the assumption that the FCC broadband maps are accurate. I think grant offices are going to be jammed with grant applications where ISPs and communities demonstrate the maps are wrong and the supposed FCC coverage doesn’t exist. I’m also coming to realize that there are a lot more underserved places in urban areas than are shown on the FCC maps.

There are also going to be grant projects that fail. The NTIA rules have gone far overboard to try to prevent failure, but we only have to look at the two-year-old RDOF program to see ISPs saying they can’t afford to build the projects with the funding they received. Some BEAD projects are going to take four years to build, and that’s four years of inflation eating away at the value of the grant.

Where might the money come from to cover these shortages? There are several possibilities:

  • There might be other grant programs that can plug some of the holes. For example, the Agriculture bill pending in the House and Senate has more funding for the USDA ReConnect grants. Hopefully, the USDA will change the rules a bit because ReConnect grants are not currently friendly to grant areas consisting of disjointed pockets of serving areas. Unfortunately, in much of the country, that’s what the remaining unserved areas look like on a map – scattered unserved pockets between areas built with other grants.
  • It’s always possible for the FCC to have another round of RDOF. I have to wonder if it learned any lessons from the first round of RDOF? Is there any hope that the FCC would give money to states rather than hold another reverse auction? Also, RDOF and other federal programs are also going to struggle if they insist on only funding areas identified on the FCC maps rather than areas that really need broadband.
  • Congress could always step up – but that seems like a remote possibility in the current dysfunctional Congress. Hopefully, if Congress provides the funding, it will give the money to the States again.
  • State legislators could come up with the funding. However, the vast majority of State funding in the last few years came from CARES and ARPA funding. The level of state broadband funding before those programs was relatively small. I remember joking with folks in Minnesota that the State’s broadband grant program at $20 million per year was a hundred-year plan to bring broadband everywhere.
The Industry

Broadband Customers 2Q 2023

Leichtman Research Group recently released broadband customer statistics for the end of the second quarter of 2023 for the largest cable and telephone companies. Leichtman compiles most of these numbers from the statistics provided to stockholders other than for Cox and Mediacom, which are estimated, and now reported together. Leichtman says this group of companies represents 96% of all US landline broadband customers.

The first quarter of the year shows a continuation of the trend where all of the growth in broadband is coming from T-Mobile and Verizon FWA fixed cellular wireless. Those two companies added 903,000 customers, while the rest of the ISPs collectively lost over 52,000 customers.

2Q 2023 1Q 2023 1Q Change % Change
Comcast 32,305,000 32,324,000 (19,000) -0.1%
Charter 30,586,000 30,509,000 77,000 0.3%
AT&T 15,304,000 15,345,000 (41,000) -0.3%
Verizon 7,562,000 7,528,000 34,000 0.5%
Cox & Mediacom 7,035,000 7,035,000 0 0.0%
Altice 4,576,100 4,612,700 (36,600) -0.8%
T-Mobile FWA 3,678,000 3,169,000 509,000 16.1%
Lumen 2,909,000 2,981,000 (72,000) -2.4%
Frontier 2,865,000 2,863,000 2,000 0.1%
Verizon FWA 2,260,000 1,866,000 394,000 21.1%
Windstream 1,175,000 1,175,000 0 0.0%
Cable ONE 1,057,900 1,063,000 (5,100) -0.5%
Breezeline 680,785 687,519 (6,734) -1.0%
TDS 523,600 515,400 8,200 1.6%
Consolidated 376,829 369,862 6,967 1.9%
Total 112,894,214 112,043,481 850,733 0.8%
Cable 76,240,785 76,231,219 9,566 0.0%
Telco 30,715,429 30,777,262 (61,833) -0.2%
FWA 5,938,000 5,035,000 903,000 17.9%

The telcos collectively lost almost 62,000 customers in the quarter despite gains from Verizon FiOS, TDS, and Consolidated of 49,000 customers for the quarter. The biggest loser was Lumen, losing 72,000 broadband customers.

The only cable company with positive growth was Charter – its strategy of expanding its footprint into rural areas is clearly paying off.

It’s hard to see from these numbers where the huge growth of FWA wireless broadband is coming from. Much of the FWA growth is coming in rural markets where the competition is fixed wireless and satellite service. But FWA pricing seems to be aimed squarely at competing with DSL and probably counts for the overall losses for AT&T and Lumen. Both companies are adding fiber customers and are losing DSL customers more quickly than indicated by the overall numbers. I’m sure AT&T hates the loss of DSL revenue, but competition from FWA makes it that much easier for the company to eventually walk away from rural copper.


Technology The Industry

DOCSIS 4.0 vs. Fiber

Comcast and Charter previously announced that they intend to upgrade cable networks to DOCSIS 4.0 to be able to better compete against fiber networks. The goal is to be able to offer faster download speeds and drastically improve upload speeds to level the playing field with fiber in terms of advertised speeds. It’s anybody’s guess if these upgrades will make cable broadband equivalent to fiber in consumers’ eyes.

From a marketing perspective, there are plenty of people who see no difference between symmetrical gigabit broadband offered by a cable company or a fiber overbuilder. However, a lot of the public has already become convinced that fiber is superior. AT&T and a few other big telcos say they quickly get a 30% market share when they bring fiber to a neighborhood, and telcos claim aspirations of reaching a 50% market share within 3-4 years.

At least a few big cable companies believe fiber is better. Cox is in the process of overbuilding fiber in some of its largest markets. Altice has built fiber in about a third of its markets. What’s not talked about much is that cable companies have the same ability to overlash fiber on existing coaxial cables in the same way that telcos can overlash onto copper cables. It costs Cox a lot less to bring fiber to a neighborhood than a fiber overbuilder that can’t overlash onto existing wires.

From a technical perspective, engineers and broadband purists will tell you that fiber delivers a better broadband signal. A few years back, I witnessed a side-by-side comparison of fiber and coaxial broadband delivered by ISPs. Although the subscribed download speeds being delivered were the same, the fiber connection felt cleaner and faster to the eye. There are several technical reasons for the difference.

  • The fiber signal has far less latency. Latency is a delay in getting bits delivered on a broadband signal. Higher latency means that a smaller percentage of bits get delivered on the first attempt. The impact of latency is most noticeable when viewing live sporting events where the signal is sent to be viewed without having received all of the transmitted bits – and this is seen to the eye as pixelation or less clarity of picture.
  • Fiber also has much less jitter. This is the variability of the signal from second to second. A fiber system generally delivers broadband signals on time, while the nuances of a copper network cause minor delay and glitches. As one example, a coaxial copper network acts like a giant radio antenna and as such, picks up stray signals that enter the network and can disrupt the broadband signal. Disruptions inside a fiber network are comparatively minor and usually come from small flaws in the fiber caused during installation or later damage.

The real question that will have to be answered in the marketplace is if cable companies can reverse years of public perception that fiber is better. They have their work cut out for them. Fiber overbuilders today tell me that they rarely lose a customer who returns to the cable company competitor. Even if the cable networks get much better, people are going to remember when they used to struggle on cable holding a zoom call.

Before the cable companies can make the upgrade to DOCSIS 4.0, which is still a few years away, the big cable companies are planning to upgrade upload speeds in some markets using a technology referred to as a mid-split. This will allocate more broadband to the upload path. It will be interesting to see if that is enough of an upgrade to stop people from leaving for fiber. I think cable companies are scared of seeing a mass migration to fiber in some neighborhoods because they understand how hard it will be to win people back. Faster upload speeds may fix the primary issue that people don’t like about cable broadband, but will it be enough to compete with fiber? It’s going to be an interesting marketing battle.

The Industry

Manufacturing Returning to the U.S.

The other day I watched an online announcement by Nokia of a partnership with Sanmina in Pleasant Prairie, Wisconsin to rehab and expand an existing factory. The factory will create over two hundred new jobs and will manufacture fiber electronics like OLTs and ONTs that are used for fiber-to-the-premise. Vice President Kamala Harris was on hand for the announcement since the impetus to build a factory in the country was partially driven by Buy America provisions in the upcoming BEAD grants.

Nokia is not the only fiber-related manufacturer to expand production in the U.S. Corning announced the construction of a new fiber optic cable plant near Hickory, North Carolina. CommScope is building a new factory in Catawba, North Carolina.  Prysmian announced the conversion of a factory in Jackson, Tennessee from building copper cables to fiber cables.

A recent press release from the U.S. Department of the Treasury documents the big burst of investments in new factories. This is being funded, at least in part by infrastructure spending that came from the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA), and the CHIPS Act.

The following chart comes from that Treasury press release and shows how 2023 spending for manufacturing facilities has doubled the average spending for 2005 – 2022. Most of the new spending is on computers, electrical, and electronic factories. The Treasury press release notes that 18 new chipmaking factories were started in the country in 2021 and 2022. But since the announcement of the CHIPs Act there are over 50 new chipmaking facilities underway.

This can only be good news for the broadband industry. First, it increases the chance to buy American electronics as part of fulfilling grants. But the real benefit is over the longer run. This means that a lot of U.S. electronics manufacturing will be able to rely on U.S. factories manned by U.S. employees.

I’m sure many of you join me in being dismayed for decades as U.S. manufacturing jobs were shifted overseas. We’ve seen a steady erosion of good-paying factory jobs and a decrease in households in the middle class.

Many of these new and repurposed factories don’t require as many new workers as older factories due to automation. But every new U.S. manufacturing job created is a win for the economy. This is a needed shot in the arm for the economy. We can’t run an economy where everybody is doing service jobs – although it looked at one time like that is where we were headed.

The Industry

Who Still Has Landlines?

I’m a regular reader of the Washington Post, having started to read it as a teenager. The newspaper has a great series of articles called the Department of Data, written by Andrew Van Dam. His articles look at questions asked by readers for which there are statistics available to answer the question. He recently answered the question of who still has landline telephones. The article is behind a paywall, but here is a link.

Van Dam found the answer in the National Health Interview Survey that is conducted by the National Center for Health Statistics. It may seem odd for this government survey to contain a few questions about telephones, but over the years, the survey has shown a correlation between having a landline and overall health. According to the survey, people who cut the cord and only use cell phones are more likely to engage in risky behavior. They are more likely to binge drink, more likely to smoke, and more likely to go without health insurance. The folks who give the survey don’t know why that is – it’s just a statistical trend that has held true for many years.

Here are some of the statistics about landline telephone service and cell phone usage from the latest NCHS:

  • 27% of homes still have a landline / 73% of homes only use cell phones.
  • 2% of homes have a landline and no cell phone.
  • Only 1% of homes have no landline or cell phone.
  • 34% of homeowners still have a landline. Only 15% of renters have a landline.
  • Landline usage is correlated with age. 88% of adults between 25-29 only use a cell phone. Only 47% of those over 65 only use a cell phone.
  • Interestingly, there is not much difference in cell phone usage based on level of education.
  • There is some correlation between household income and cell phone usage. 78% of homes that are below the poverty line only use cell phones while 72% of those making twice the rate of poverty or higher use only cell phones.
  • There is virtually no difference in the percentage of homes that use only cellphones between urban and rural areas.
  • There is a big geographic difference in households that only have cell phones. Nearly 80% of homes only use cell phones in Idaho, Oklahoma, Mississippi, Wyoming, and New Mexico. The states with the lowest percentage of homes that only use cell phones are New York, Maryland, Massachusetts, and New Jersey. The whole northeast has fewer homes that rely on only cell phones than the rest of the country.
  • There is no correlation between still having a landline and having a computer or tablet in the home.

Van Dam speculates that the northeast has the highest percentage of landlines because Verizon built FiOS fiber networks back before the giant drop in landline subscriptions. He thinks it’s likely that people who have used Verizon FiOS for a long time have never bothered to drop the landline service.

I always find it interesting when ISPs choose to offer broadband and no telephone service. It’s really easy these days to layer on VoIP service, and it’s an easy margin with little headaches. I think many ISPs will be surprised to find that over one-fourth of homes still are willing to pay for a landline.

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