broadband adoption rates – POTs and PANs

Regional Differences in Broadband Adoption

The latest Akamai report State of the Internet Q1 2017 contains a lot of interesting facts about broadband adoption and usage in the US and around the world. One of the things that they track is the percentage of broadband users at various data speeds. I think their tracking is the most accurate in the industry because they measure the actual speeds of connectivity, not the subscribed rate that users think they are getting. Most of the largest Internet hubs use Akamai and so they get to see huge volumes of web connections.

Probably the most interesting statistic in the report from a US perspective is that the average broadband connection speed for the whole US has grown to 18.7 Mbps. This is up 8.8% over the last quarter of 2016 and is up 22% from a year ago. This increase was enough to move the US up to tenth place in the world in terms of average connectivity speed. The worldwide connectivity speed is 7.2 Mbps, but that comes with the caveat that it doesn’t include some parts of the world and also doesn’t include the billions who don’t yet have any broadband available.

What I find most interesting in the connectivity data is how disparate broadband is in different parts of the US. For the first time there are places in the US with average connectivity speeds greater than the FCC definition of broadband – the District of Columbia at 28.1 Mbps and Delaware at 25.2 Mbps. Contrast this with Idaho with an average connectivity speed of 12 Mbps, which is less than half of the speeds for the fastest states. Perhaps the most useful statistics in the report is the percentage of connections in each state that meet various speed thresholds:

4 Mbps Adoption. Akamai says that Delaware leads in this category with 98% of connections exceeding a speed of 4 Mbps, with Rhode Island close behind at 97%. Contrast this to the bottom of the list where West Virginia has only 77% of connections exceeding 4 Mbps and Arkansas the next lowest at 81%.

10 Mbps Adoption Rate. Delaware also leads this category with 86% of the broadband connections from the state exceeding 10 Mbps, again just ahead of Rhode Island with 85%. But at the bottom of this list are Idaho at 45%, and Arkansas and New Mexico at 47%.

15 Mbps Adoption Rate. Rhode Island leads this category with 66% of broadband connections exceeding 15 Mbps. At the bottom of this list was Idaho with only 23% of connections exceeding 15 Mbps.

25 Mbps Adoption Rate. The District of Columbia tops this list with 38% of connections exceeding 25 Mbps, with Delaware second at 33%. At the bottom of the list is Idaho where only 7.5% of connections exceeded 25 Mbps, with New Mexico the next lowest at 7.9%.

Since these are the actual speeds of Internet connections one can conjecture there are a number of reasons that contribute to the differences across various states, such as:

Availability of fast broadband. The states with the fastest broadband rates happen to be those where a significant percentage of the population has both fiber (Verizon FiOS) and cable modem broadband available. By contrast the states near the bottom of the list tend to have far fewer communities with fiber, and even many communities without cable systems.
Affordability. Numerous surveys have shown that affordability is still a major factor for homes being able to afford the broadband connection they want.
Choice. Even in places where there is fast broadband available, many households choose slower broadband speeds due to lack of perceived need.
Geography. Terrain plays a role as well. In working with rural communities across the country I see that in the Plains states with wide-open expanses of land that there has been a proliferation of rural homes served by point-to-multipoint wireless networks that are delivering speeds of 10 – 50 Mbps. But this technology is of far less value in places like West Virginia with hilly and wooded terrain.

One thing this report shows is that the disparity between the top and the bottom states on these various lists is widening. In places where fast broadband is available, the statistics show that a lot of people are upgrading to faster speeds. But in states near the bottom of the list where the broadband networks are the least robust the same upward migrations to faster speeds is not possible due to the lack of options. One would think that most of the country would look like Delaware in terms of broadband adoption rates if broadband was available to everybody. But the difference in technologies and infrastructure limits households from buying the broadband speeds they want.

The other thing to remember about these statistics is that they are only measuring the speeds for actual broadband connections, and so obviously exclude the millions of households in the country that still don’t have a reasonable broadband alternative. If those households were weighted into these statistics then states with large rural areas with no broadband would sink down the list.

Seniors and Broadband

A recent poll from the Pew Research Center shows that for the first time that more than half of Americans over 65 have a landline broadband connection in their homes. This is a milestone for the industry and is significantly higher than the last time Pew asked the same questions in 2013.

Since the inception of the web seniors have always had a significantly lower broadband adoption rate than other age groups, but this survey shows that seniors are now starting to close the gap. Part of this shift is probably due to the fact that baby boomers are now joining the senior category and bringing their much higher adoption rate for technology with them. But one also has to think that the benefits of broadband are luring more seniors into buying broadband.

The survey also showed the following:

67% of seniors say that they use the Internet.
42% of seniors now own a smartphone, which is triple the percentage from 2013.
Of those that use the Internet, 17% go on-line once a day, 51% use the Internet several times per day and 8% say they are on the Internet almost constantly.
A much smaller percentage of seniors use social media, but the ones that do use it often. For example, 70% of seniors on Facebook use the service daily.
25% of seniors that go on-line play on-line video games.
58% of seniors think that technology has a positive effect on society. Only 4% think technology is mostly negative.

The survey also looked deeper into the reasons why seniors say they don’t use broadband and found the following:

Only 26% of seniors say that they are very confident when using electronic devices. The percentages are far higher for younger age groups.
73% of seniors say they need help using a new electronic device.
Disabled seniors seem to use broadband at a much lower rate than those with no disabilities.

ISPs have obviously always had challenges in selling to seniors. But I clients that have done very well selling to seniors and following are a few things I have seen work.

I have one client that has been holding weekly computer training classes for the public for nearly 15 years. Their free classes are filled every week mostly by seniors. They teach what people really want to learn – how to use Facebook, how to deal with emails and spam, how to save and send pictures, etc. They have a much higher broadband penetration rate with seniors than is shown by this survey and they credit their training classes for making seniors comfortable using broadband.

I have another client that sends an employee to sit with every new broadband customers to help them set up everything they want to use. They say they will often spend up to four hours with a new senior customer and will set up their Facebook and email accounts, show them how to use bookmarks, show them how to search for information, etc. And this ISP will take calls from these new customers to answer all of their questions and will make return home visits if needed. They say that word of mouth has emboldened a lot of seniors to buy broadband and because of their continued support they can’t recall any senior who dropped broadband. They think this up-front assistance is time and money well spent because they say that their seniors become the most loyal customers who also have the best track record of paying the monthly broadband bills on time.

I have another client that also holds training classes, but rather than have potential customers come to their office, they have placed computers in several places in the community where seniors gather daily – places like a senior community center, an indoor community swimming pool and gym, and in a popular restaurant that allowed them to put a few computers in a back room. This telco sends somebody to these locations a few times a week to answer questions and to show people how to use the Internet. They say this program has led to significant sales of broadband to seniors.

But I also have a lot of clients that have not done anything specific to help seniors and then see poor broadband adoption rates. My advice to them has always been to look at the efforts to sell to seniors as just another part of the sales process. As this survey shows, it is fear of technology that is still the primary reason why many seniors don’t buy broadband. Any ISP that makes a genuine effort to allay these fears will reap the benefits of increased broadband sales and an appreciative new customer base.

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