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.