The Latest Stats on Broadband Usage

OpenVault released its Broadband Insights Report for 2Q22, which contains statistics about nationwide broadband usage at the end of the quarter. As usual, the OpenVault report is an invaluable peek into the national state of broadband.

The report shows that the average home used 491 gigabytes of data at the end of the second quarter. This is up by 13% of the 433 gigabytes used at the end of the second quarter of 2021. The second quarter usage, which represents June 30, is typically the lowest usage levels of the year due to schools being out of session and folks on vacation.

Upload bandwidth usage continues to grow and averaged 31.2 gigabytes per household, up from 28 gigabytes in 2021 and 13.6 gigabytes in 2018. Average upload speeds increased from 17 Mbps in 2021 to 23 Mbps in 2022.

The percentage of households that use more than 1-terabyte (1,000 gigabytes) of data each month continues to grow rapidly. OpenVault calls these power users. These are homes that will trigger data caps if they have an ISP that enforces them. At the end of the second quarter of 2022, 13.7% of homes are using more than a terabyte compared to 10.8% in 2021, an increase of over 26%. The percentage of homes using more than 2-terabytes increased from 1.5% in 2021 to 2.2% in 2022, an increase of 47%.

There has been a huge migration of folks subscribing to faster tiers of broadband. The most extraordinary statistic is that 14.2% of American homes now subscribe to gigabit service, up from 4.6% just two years ago.

Much of this shift, shown in the table below, is coming from cable companies that unilaterally increased speeds for customers, but many millions of customers have also upgraded to more expensive broadband tiers to get faster broadband. The following chart shows a remarkable trend since June 2020:

Subscriptions June 2020 June 2021 June 2022
Under 50 Mbps 18.4% 10.5% 5.7%
50 – 99 Mbps 20.4% 9.6% 8.5%
100 – 199 Mbps 37.8% 47.5% 10.1%
200 – 499 Mbps 13.5% 17.2% 55.4%
500 – 999 Mbps 5.0% 4.7% 6.0%
1 Gbps 4.9% 10.5% 14.2%

This chart, better than anything else I’ve seen, lays to rest the idea that the national definition of broadband ought to be 100 Mbps download. As of June of this year, 76% of U.S. households are subscribing to broadband plans of 200 Mbps or faster. The most popular tier is 200-400 Mbps, which makes sense since the big cable companies have migrated most broadband customers to speeds of 200 Mbps or 300 Mbps.

Interestingly, OpenVault says that ACP customers are using more broadband, at 654 gigabytes, than the average home. There are also 52% more power users among ACP subscribers using more than a terabyte of data than the overall population. OpenVault doesn’t speculate why this is so, but I would guess that part of the difference might be that homes getting broadband for the first time have a lot of streaming video from recent years to catch up on. I remember how much video my household watched when we first got Netflix – but over time, we went back to other activities.

Q1 Broadband Usage Still Robust

The OpenVault Insights Report for the first quarter of 2022 shows that broadband usage remains high. The company gathers broadband usage data through ISPs from millions of individual broadband users to compile these reports, making the results a lot more reliable than a typical small sample.

Average household broadband usage in March 2022 was measured at 514 gigabytes, staying over half a terabyte of data used for the average household. That’s a measure of the total combined upload and download usage for the average customer during a month. This is a drop from 536 gigabytes in the fourth quarter of 2021, but the first quarter has always shown seasonally lower usage than at the end of the previous year. Usage for the first quarter is up 11% from the 462 gigabytes in the first quarter of 2021. That’s a lower growth rate than the 20% growth rate we’ve come to expect – however, 2021 was not a normal year due to the extraordinary growth from the pandemic.

The OpenVault statistics continue to show a huge number of users that are consuming more than 1 terabyte of data per month. At the end of the first quarter, 14.6% of homes used more than 1 terabyte of data, including 2.4% who used over 2 terabytes. That’s a significant increase since the first quarter of 2021 when 10% of homes used more than 1 terabyte of data – a year-over-year growth rate of 46%.

One of the most interesting statistics reported by OpenVault is the migration of customers over time to faster broadband tiers. The following table shows the percentage of nationwide households subscribed to various broadband speed plans in 2020 and 2021.

June 2020 June 2021 Dec 2021 Mar 2022
Under 50 Mbps 18.4% 10.5% 9.4% 7.6%
50 – 99 Mbps 20.4% 9.6% 7.6% 6.3%
100 – 199 Mbps 37.8% 47.5% 36.9% 17.0%
200 – 499 Mbps 13.5% 17.2% 28.5% 49.7%
500 – 999 Mbps 5.0% 4.7% 5.5% 6.1%
1 Gbps 4.9% 10.5% 12.2% 13.4%

It’s important to note that the above chart shows the subscribed speed and not the actual speeds, which are often lower. The migration to faster speeds is being driven by two factors. One is the big cable companies unilaterally upgrading basic speeds to 200 Mbps. But many of the speed upgrades are customer driven, as can be seen by the big growth in customers subscribed to speeds faster than 500 Mbps.

The report also highlights something that network engineers have always understood, which is that big events cause big spikes in usage. I’ve understood this since the days since telephone company network engineers braced themselves for Mother’s Day. OpenVault looked at the usage in Kansas City during the NCAA March Madness basketball game between Kansas and Duke. The regional usage spiked 24% during the game compared to the previous three Mondays.

The report, as always, has a few other interesting tidbits:

  • Average North American usage is more than double the average broadband usage in Europe.
  • In 2017, less than 10% of homes used more than 500 gigabytes of data per month. That’s now up to 25% of homes.
  • Average household upload usage has grown from 25 gigabytes at the end of 2020 to 32.5 gigabits at the end of the first quarter of 2022. That’s a 30% increase in 15 months. Interestingly, subscribers with unlimited data plans use three times more upload bandwidth than other subscribers.
  • OpenVault reports average nationwide U.S. download speeds of 312 Mbps, and average upload speeds of 22.5 Mbps. However, they don’t define how that is calculated, so it’s hard to put that into context.

OpenVault’s conclusion from the latest data is that ISPs should expect the continued growth of customers who use more than a terabyte of data per month. They also note that there is a marketing opportunity for ISPs since customers seem willing to pay to upgrade to faster speeds.

Household Broadband Usage Up Again

OpenVault just published its Broadband Insights Report for the end of the fourth quarter of 2021. As usual, the results are astounding and demonstrate the continued strong growth of household broadband usage.

I think one of the most useful statistics from OpenVault is the average household usage of broadband. Below is the trend in average U.S. household broadband usage since 2018. These numbers include combined download and upload usage.

1st Quarter 2018          215 Gigabytes

1st Quarter 2019          274 Gigabytes

1st Quarter 2020          403 Gigabytes

1st Quarter 2021          462 Gigabytes

4th Quarter 2021         536 Gigabytes

There were not many people in the industry in 2018 who would have believed that the average home usage in 2021 would be using over a half terabyte of data each month.

Another startling number is the percentage of U.S. households that now use over a terabyte of data each month – something that OpenVault calls power users. The following statistics also reach back to 2018. OpenVault says that 2.7% of all U.S. households now use over two terabytes of data per month. These statistics must be sweet music to those ISPs with data caps that penalize home for using the broadband they’ve purchased.

4th Quarter 2018            4.0%

4th Quarter 2019            7.3%

4th Quarter 2020          14.1%

4th Quarter 2021         16.1%

I think that the most interesting statistic is the rapid migration of customers to faster broadband tiers. The following table shows the percentage of nationwide households subscribed to various broadband speed plans just since June 2020.

June 2020 June 2021 Sept 2021 Dec 2021
Under 50 Mbps 18.4% 10.5% 9.8% 9.4%
50 – 99 Mbps 20.4% 9.6% 8.0% 7.6%
100 – 199 Mbps 37.8% 47.5% 38.4% 36.9%
200 – 499 Mbps 13.5% 17.2% 27.4% 28.5%
500 – 999 Mbps 5.0% 4.7% 5.1% 5.5%
1 Gbps 4.9% 10.5% 11.4% 12.2%

In just the last year, the number of households subscribed to gigabit broadband is up 250%, while the number subscribed to slower speeds has dropped precipitously. Many millions of homes over the last year upgraded to faster broadband plans.

But a big part of this shift comes from a change in the definition of existing broadband plans. For example, several of the big cable companies have started to describe the basic broadband package as delivering speeds up to 200 Mbps. From what we can see, in many cities changing the description of the product to 200 Mbps did not mean a change in the speeds that customers are receiving – this seems in many cases to be a marketing shift to make cable broadband look faster.

The latest report also includes a few other interesting statistics:

  • Average upload broadband usage is now up to 32 gigabytes per month. OpenVault hasn’t been tracking this for very long, and this has grown from 25 gigabytes of data per month in the third quarter of 2020 – a 28% increase.
  • The average U.S. home now has 25 connected devices.

Build It, and They Will Fill It.

I assume that most people know the famous line from Field of Dreams where the disembodied voice promises, “Build it, and he will come.” For twenty years, I’ve been advising broadband clients against taking that advice. It doesn’t make any sense to invest a lot of money into building a broadband network without first having done enough market research to know that people will buy your services.

Today I want to talk about a similar-sounding idea – build it, and they will fill it. This is a shorthand way to describe the unbelievable growth in broadband demand. I’m now warning clients to build new networks that are robust enough to handle the future demand that will inevitably be coming from customers.

We have a lot of evidence of the fast growth of broadband usage. Center stage is statistics from OpenVault that has reported on the average nationwide broadband usage by homes as follows:

1st Quarter 2018          215 Gigabytes

1st Quarter 2019          274 Gigabytes

1st Quarter 2020          403 Gigabytes

1st Quarter 2021          462 Gigabytes

It’s easy to think that the usage spike created by the pandemic is an anomaly, but recent broadband growth has been only slightly higher than the long-term growth trend. The amount of bandwidth used by the average home has been doubling about every three years for several decades.

Another statistic from OpenVault tells a similar story. OpenVault has labeled households that use more than a terabyte of data per month as power users. The percentage of power users has grown from 4% of all homes at the end of 2018 to almost 11% by the middle of 2021.

There are two reasons that average household broadband usage has been growing. Over time, homes are finding new ways to use broadband while also using more broadband for the things we’ve always done.

I think most of us see how familiar tasks are using more broadband. A few years ago, I used Microsoft Word and Excel locally on my computer and the only time I used bandwidth was when I sent a document to somebody else. Today, my files are automatically stored in the cloud as I type, and I also keep another backup copy of everything in a different cloud. I also participate in collaboration software that stores some of the same documents again. For somebody that creates as many spreadsheets and word documents as me, this is a major increase in home broadband usage.

But it’s the new uses of broadband that really add up. New uses of broadband are coming along every day. Just a few years ago, I talked almost exclusively on my cellphone. Today I probably average three hours per day on video calls. As a sports fan, it’s not unusual for me to be streaming two or three 4K games at the same time. I’m not a gamer, but the major game platforms were all in the process of migrating to the cloud just as the pandemic hit. Our Subaru dumps a big file into the cloud every time we pull into our driveway. YouTube has started accepting 8K video that requires a 50 Mbps download stream. There are already early experimental HD virtual reality streams online.

I’m regularly asked why fiber is superior to technologies like wireless or satellite networks – and the answer is easy. Anybody who builds a new broadband network must be prepared for that network to carry ten times more broadband traffic in a decade and one hundred times more traffic in twenty years. Fixed wireless networks are not going to be able to do that. Satellite networks won’t even come close. Until the cable companies make major upgrades, they are already fallen badly behind the demand curve for upload bandwidth.

If you build a fiber network, your customers will fill it. When it gets too busy you can upgrade electronics and start the growth cycle all over again.

Reaching Critical Mass for Gigabit Connections

The statistics concerning the number of gigabit fiber customers is eye-opening. Openvault tracks the percentage of customers provisioned at various broadband speeds. At the end of 2019, the company reported that 2.81% of all households in the US were subscribed to gigabit service. By the end of the first quarter of 2020, just after the onset of the pandemic, the percentage of gigabit subscriptions had climbed to 3.75% of total broadband subscribers. By the end of the second quarter, this exploded to 4.9% of the total market.

It’s clear that households are finally migrating to gigabit broadband. The gigabit product has been around for a while. The earliest places I remember selling it to homes were municipal systems like Lafayette, Louisiana, and Chattanooga, Tennessee. Some small fiber overbuilders and small telcos also sold early gigabit products. But the product didn’t really take off until Google fiber announced it was going to overbuild Kansas City in 2011 and offered $70 gigabit. That put the gigabit product into the daily conversation in the industry.

Since then there are a lot of ISPs offering the gigabit product. Big telcos like AT&T and CenturyLink push the product where they have fiber. Most of the big cable companies now offer gigabit download products, although it’s only priced to sell in markets where there is a fiber competitor. Google Fiber expanded to a bunch of additional markets and a few dozen overbuilders like Ting are selling gigabit broadband. There are now over 150 municipal fiber broadband utilities that sell gigabit broadband. And smaller telcos and cooperatives have expanded gigabit broadband into smaller towns and rural areas all around the country.

The title of the blog uses the phrase ‘critical mass’. By that, I mean there are probably now enough gigabit homes to finally have a discussion about gigabit applications on the Internet. Back after Google Fiber stirred up the industry, there was a lot of talk about finding a gigabit application that needed that much bandwidth. But nobody’s ever found one for homes for the simple reason that there was never a big enough quantity of gigabit customers to justify the cost of developing and distributing large bandwidth applications.

Maybe we are finally getting to the point when it’s reasonable to talk about developing giant bandwidth applications. The most obvious candidate product for using giant bandwidth is telepresence – and that’s been at the top of the list of candidates for a long time as shown by this article from Pew Research in 2014 asking how we might use a gigabit in the home – almost every answer from industry experts then talked about some form of telepresence.

Telepresence is the technology to bring in realistic images into the home in real-time. This would mean having images of people, objects, or places in your home that seem real. It could mean having a work meeting, seeing a doctor, talking to distant family members, or playing cards with friends as recently suggested by Mark Zuckerberg. Telepresence also means interactive gaming with holographic opponents. Telepresence might mean immersion in a tour of distant lands as if you are there.

Early telepresence technology is still going to be a long way away from a StarTrek holodeck, but it will be the first step in that direction. The technology will be transformational. We’ve quickly gotten used to meetings by Zoom, but telepresence is going to more like sitting across the table from somebody while you talk to them. I can think of a dozen sci-movies that include scenes of telepresence board meetings – and that will soon be possible with enough broadband.

I’m looking forward to Openvault’s third-quarter report to see the additional growth in gigabit subscribers. We might already by reaching a critical mass to now have a market for gigabit applications. A 5% market penetration of gigabit users means that we’re approaching 7 million gigabit households. I have to think that a decent percentage of the people who will pony up for gigabit broadband will be willing to tackle cutting edge applications.

This isn’t something that will happen overnight. Somebody has to develop portals and processors to handle telepresence streams in real-time – it’s a big computing challenge to make affordable in a home environment. But as the number of gigabit subscribers keeps growing, the opportunity is there for somebody to finally monetize and capitalize on the capability of a gigabit connection. As somebody who now spends several hours of each day in online video chats, I’m ready to move on to telepresence, even if that means I have to wear something other than sweatpants to have a business meeting!

Data Usage Remains Robust in 2Q20

OpenVault recently published its Broadband Insights Report for the second quarter of 2020. Since OpenVault’s software is used to track usage in major Internet POPs, the company has a unique perspective on broadband usage in the country.

The report says that the peak of data usage this year was in March when people first reacted to the pandemic. Data usage is down slightly compared with the first quarter, but still much higher than data usage a year ago, In the second quarter the average home used 380 gigabytes of data per month. This is down 6% compared to the average usage in March 2020 of 403 gigabytes. But the second quarter data usage is up 36% over the average usage of 280 gigabytes per household used in the second quarter of 2019. Before the pandemic, household broadband usage was growing at a rate just above 20% annually, so the 36% growth in a year demonstrates the huge impact on the pandemic on broadband.

Median data usage has increased even faster than average usage. The median usage measures the middle point where half of homes use less and have of homes use more broadband. The median usage in the second quarter of 2019 was 144 gigabytes and has grown 54% in a year to 223 gigabytes. This indicates that even households that previously would have been light data users are now using a lot more data during the pandemic. This likely can comes from both increase cord-cutting as well as from students and adults working from home.

OpenVault reports that usage for homes with unlimited broadband plans (no data caps) grew even faster and increased by 42% over 2019. The company surmises that the big increase is at least partially because the big ISPs are not enforcing data caps during the pandemic. However, part of this increase is also likely due to an increase of what OpenVault calls power users. These are homes that use more than 1 terabyte of data per month.

In the second quarter 8.7% of homes used at least 1 terabyte of data per month, more than double the 4.1% of terabyte homes a year earlier. This now includes 1% of all homes that are using more than 2 terabytes of data, triple since a year earlier in 2019.

One reason for the higher data usage might be explained by households subscribing to faster data plans. At the end of the second quarter, 4.9% of homes are now subscribed to gigabit data speeds, more than double the 2.1% of gigabit subscribed in the second quarter of 2019. Over 61% of homes in the country are now subscribed to broadband speeds greater than 100 Mbps. That includes 37.8% subscribed to plans between 100 Mbps and 200 Mbps, 13.5% subscribed to plans between 200 Mbps and 400 Mbps, 5% subscribed to speeds between 400 Mbps and 900 Mbps, and 4.9% subscribed to gigabit speeds. Less than 20% of homes nationwide are subscribed to plans slower than 40 Mbps.

There is one segment of broadband usage that continued to increase in the second quarter of 2020. Upload usage from homes is up 56% over a year earlier. Upload demand is directly related to the need to connect for homes to connect to school and work servers and to take part in Zoom and other video conferencing services. It’s likely before the pandemic that many homes had never much needed the upload link from home.

What is most intriguing about the continued increase in upload demand is that upload usage continued to grow even after school semesters were ending for the year. During the second quarter tens of millions of upload links to school servers would have gone quiet as school semesters ended, and yet upload demand continued to grow. It’s going to be interesting to see what the fall school semester does to broadband usage.

Why Does the FCC Support Data Caps?

Most people may not have noticed that the upcoming RDOF grants allow, and even encourage ISPs to enforce data caps on customers. I have a hard time thinking of even one reason why the FCC would suggest that ISPs use data caps.

The RDOF grants have four performance tiers for ISPs, with the auction rules weighted to give preference to faster data speeds. Each of these performance tiers comes with a suggested monthly usage allotment – which means a data cap. ISPs that will deliver speeds of either 25/3 Mbps or 50/5 Mbps can introduce a data cap of 250 gigabytes or the U.S. average, whichever is higher. ISPs offering speeds of 100/20 Mbps or 1 Gbps/500 Mbps can set a data cap at 2 terabytes.

The natural question is to ask why the FCC is setting any data cap at all? Remember, this is an FCC that no longer regulates broadband, and yet they are suggesting rules that encourage ISPs that win the grant funding to introduce data caps. Past experience says that if the rules allow for data caps, the ISPs that win the money are likely to implement them.

I find the data caps for the 25/3 Mbps and 50/5 Mbps to be intriguing since ISPs can’t set the data caps at less than the US average. Who is going to measure that? The FCC doesn’t gather the kind of data needed to measure data caps around the country. Further, there are companies like CenturyLink that have data caps but that often don’t enforce them. I haven’t the foggiest idea how anybody would measure the national average data cap.

It’s important to put these data caps into perspective. The data caps on the slower products are incredibly stingy at 250 gigabytes per month.  OpenVault reported earlier this year that the average US home used 344 gigabytes of data per month in December 2019, up from 274 gigabytes a year earlier. Due to the impact of COVID-19, that number exploded to 402.5 gigabytes by the end of March. Homes being limited to using 250 gigabytes of data are being told not to use their broadband like everybody else. It’s nearly impossible for a home that has people working from home or students doing schoolwork at home to limit themselves to only 250 gigabytes of data per month.

Even the 2 terabyte data caps for faster broadband will become problematic is a few years. OpenVault says that over 10% of homes were already using more than 1 terabyte of data as of the end of the first quarter of 2020 and 1.2% were using over 2 terabytes. By the time these networks are built with RDOF money it wouldn’t be surprising for 10% of homes to be using more than the 2-terabyte cap.

With these grant rules the FCC is actively supporting ISP to introducing data caps that are smaller than the national average broadband usage at the end of 2018 and that will easily be less than half of the national average usage by the time the networks funded by the RDOF grants are constructed.

It seems like the FCC never learns any lessons. Every grant program they have administered has some major flaws. The FCC is handing out billions of dollars to provide broadband to home that don’t have it today. This program is a major boon for the rural communities that get broadband because of the grants. But with these rules, the RDOF money will be used to bring broadband to homes for the first time and immediately cripple homes from using that broadband due to data caps. For the federal government to support a 250-gigabyte data cap is an incredibly bad policy. They are saying to folks – here, we funded broadband, but don’t use it. I can’t conceive of any reason why data caps are even mentioned in the grant rules unless this is another case of bowing to the lobbyists from the big ISPs or the satellite broadband providers.

Looking at the bigger picture, it’s somewhat surprising that the FCC would take any position on things like data caps since they have given away their authority to regulate broadband. What these grant rules tells us is that this FCC would heartily support data caps if they still had that authority. This provision in this grant program provides tacit support to Comcast and AT&T to bill customers huge amounts of extra money for exceeding arbitrary and stingy data caps.

Home Broadband Usage Explodes

ISPs have all been reporting increased bandwidth usage due to employees and students being asked to work from home during the COVID-19 pandemic. Perhaps the best proof we’ve seen yet of the huge increase in home broadband usage comes from OpenVault, which has been tracking home broadband usage for several years.

The company reported that as of the end of March that the average US home used 402.5 gigabytes of usage, up 17% from the 344.0 gigabytes reported just 3 months earlier at the end of 2019, and up 47% from the 273.5 gigabytes measured a year earlier. OpenVault says that most of the growth was realized in the last two weeks of March as employees and students started working from home in earnest.

The OpenVault numbers represent total bandwidth used by a home, meaning the numbers are a combination of download and upload usage. OpenVault validated the widely reported phenomenon that the demand for upload bandwidth is increasing far more than the need for downloading.

Another interesting way to look at broadband usage is by considering the median usage – which is the speed at which half of homes use more and half less broadband. The median broadband usage is the US has always been lower than average usage because of the large number of rural homes that are stuck using slow broadband connections. A home with a 1 Mbps download speed cannot easily use the same amount of bandwidth as a home with a 100 Mbps connection. Median usage for the first quarter was at 233.6 gigabytes, up 60% from 146.0 gigabytes from a year earlier, and up 22% from the 190.7 gigabytes used at the end of 2019. The big news in the growth of median speeds is that even homes with slower broadband connections are burning through more broadband.

One of the most startling numbers to come from OpenVault is what they call power users – homes that are using more than 1 terabyte of data per month. At the end of March, 10% of all US homes were using a terabyte of data, an increase of 138% over the 4.2% of homes that used a terabyte of data just three months earlier at the end of 2019. Even more interesting, 1.2% of homes used 2 terabytes of data at the end up march, up 215% from the end of December. The big ISPs like Comcast are supposedly not billing for data caps during the pandemic – but they must be licking their chops at the flood of new revenues this is going to create if broadband usage doesn’t return to pre-COVID levels.

We saw the demand for faster broadband products also leap upward. At the end of March the percentage of homes subscribing to gigabit data products jumped to 3.75% of homes, up from 2.8% at the end of 2019 and up from 1.9% a year earlier. Amazingly, more than 1% of all homes in the US upgraded to a gigabit data plan in just the last three months – that’s something that’s been predicted for years. Those homes are not likely going to downgrade to slower speeds – so gigabit broadband is now becoming a significant segment of the market. OpenVault says that 12% of US homes now subscribe to speeds of 200 Mbps or faster.

The OpenVault data also validates what’s been reported widely by ISPs – that the patten of broadband usage is changing by time of day. In the recent past the peak period for broadband usage – the busy hour – was always in the evenings. In the first quarter the amount of usage in the evenings was flat and all of the increased usage came during the daytime as employees and students used broadband and video conferences to function.

OpenVault says that usage peaked in the third week of March. It will be interesting going forward to see the how home usage changes. OpenVault doesn’t have any better crystal ball than the rest of us, but they are predicting that broadband usage will never return to the historic patters. They predict that a lot of people will continue to work from home, meaning increased broadband demand during the day. They believe there will be continued pressure on the upload data paths. People who have learned to videoconference during the recent months are likely to continue that practice in the future. Companies and employees that realize they can be productive at home are likely to work more from home, even if only on a part-time basis.

The Rural Broadband Gap is Widening

A lot of attention is being paid to the broadband gap between urban and rural America. There are a lot of different estimates of the number of rural homes and businesses that don’t have broadband. At the low end of the scale are the FCC estimates that come from the overstated FCC broadband maps that are derived from overstated 477 data from ISPs. States and counties have made estimates of broadband coverage which invariably show more places without broadband than the FCC data. What everybody agrees on is that there are still a lot of rural places with poor broadband, be that number 18 million or 30 million people or 50 million – there is a definite urban versus rural broadband gap.

The FCC has been publicly touting that they are solving the gap by funding programs that bring broadband to places that don’t have it. The upcoming $20 billion RDOF grants will make a dent in the places without broadband, although the 6-year required construction buildout that doesn’t start until next year will feel glacial to places that desperately need broadband today. We’ll have to wait for the reverse auction to see how many millions of homes eventually get broadband from this program – at best it’s likely to only help a fraction of those with no broadband. Unless Congress acts, there isn’t going to be a solution for the many millions that are not going to be covered by FCC programs.

There is another broadband gap that is not getting the press coverage. The average speed of broadband is growing rapidly. FCC Chairman Ajit Pai took credit for this growth in a recent tweet and claimed faster speeds are due to the end of net neutrality and to ending broadband regulation: “Two years ago today, some Washington politicians promised you that the Internet would slow down. What’s happened since? Average U.S. fixed broadband speeds are UP over 76% according to Ookla. It [repealing net neutrality] wasn’t the end of the Internet as we know it—not even close.”

I’m not sure what Ookla numbers he’s referring to. In the Ookla Speedtest Global Index, the company says that the average fixed broadband speed in the US climbed from 111.69 Mbps to 134.77 Mbps during 2019 – an impressive 21% increase. This matches with recently announced statistics from OpenVault that says that average speeds in the US increased from 103 Mbps to 128 Mbps for the year ending in the third quarter of 2019 – a growth rate of 24%.

I’m not that sure any of the speed increase is due to FCC actions. Faster speeds come from several sources. Most of the increase comes from the big cable companies unilaterally increasing broadband speed in urban markets to as much as 200 Mbps. Since the big cable companies serve two-third of the broadband market, any changes they make in speeds immediately affects the average. The urban speeds are further increased by the continued migration of urban customers from DSL to cable modem. There is also an increase in customers buying gigabit broadband, which according to OpenVault is now 2.8% of all broadband customers – nearly doubling in 2019. Finally, there is a small increase due to some rural markets getting broadband upgrades – but the rural customers added to the market are too small to make much of an impact on the national average. I guess I’d like Chairman Pai to be more specific, because I don’t see an FCC fingerprint on these industry trends.

It’s great that broadband speeds are improving. Anybody who has been paying attention saw this coming, since average speeds having been growing at a rate of over 20% annually for several decades. What Chairman Pai and most others have missed is that these speed increases come almost entirely from urban customers. The speed gap between urban and rural America is widening rapidly as urban speeds climb.

This urban / rural speed gap is important to recognize because urban customers are finding ways to use the faster broadband. Consider the many uses of broadband in urban areas that are out of reach for a rural household. We routinely back-up data files into cloud storage. Our computers, cellphones, cars, TVs and numerous devices routinely and automatically download updates and upload data into the cloud. We use cloud-based security cameras that we can access when away from home. When we walk into our homes our cellphones automatically start using our home broadband. We are free to work from home, even if it’s only to log into a corporate WAN in the evening. Our kids routinely do online homework and practically all of the communications between schools, students, and parents is online. We now use a huge amount of machine-to-machine data that has nothing to do with video and entertainment.

People living without good broadband can’t do any of these things. In just the last week CCG interviewed several rural residents that tell a different story than that list above. Parents drive an hour so kids can use library broadband for schoolwork. Rural businesses can’t maintain a quality signal on satellite broadband to be able to take credit card payments. Residents frantically try to shut off automatically updating software to avoid going over their data caps. I could fill a week of blogs with the horror stories about rural broadband.

If we look back even just seven or eight years ago, the urban versus rural speed gap didn’t feel so wide. When the average urban home got speeds of 25 Mbps there wasn’t such a giant gap with rural residents because urban residents didn’t use broadband as extensively as they do today. But urban speeds are getting faster and faster while the broadband for too many rural homes has stayed stagnant – where it even exists. To quote a rural resident that we spoke to last week, rural people with poor broadband now feel like they aren’t part of the 21st century.

How FCC Policies Hurt Communities

I was recently looking at one of the counties where the winner of the CAF II reverse auction was Viasat, a satellite broadband provider. There are many other rural counties with an identical outcome. As I thought about these counties, I came to realize that a series of FCC policies and decisions have hurt these counties in their search for better broadband. There is no single FCC action that hurt them, but a cascading series of individual decisions have made it harder for them to find a broadband solution.

The first FCC decision that created the current situation is when the current FCC declined to consider an increase in the definition of broadband from 25/3 Mbps. That definition was set in 2015 and there is ample record on file in FCC proceedings that 25/3 is already an obsolete definition of broadband.

The most recent evidence comes from OpenVault. The company just released its Broadband Industry Report for 4Q 2019 that shows the average subscribed speed in the US grew from 103 Mbps in 2018 to 128 Mbps in 2019. That result is largely being driven by the cable companies and the fiber providers that serve more than 2/3 of all of the broadband customers in the country. The FCC is stubbornly sticking to the 25/3 Mbps definition of broadband even as a large majority of households in the country are being given speeds greater than 100 Mbps.

The decision to stick to the outdated 25/3 Mbps then created a second problem for rural America when the outdated FCC speed definition is used to award federal grants. The FCC decided in the CAF II reverse auction grants that any technology that met the 25/3 Mbps speed was acceptable. The FCC boxed themselves in since they couldn’t set a higher speed threshold for grants without admitting that the 25/3 Mbps threshold is inadequate. That auction awarded funding for technologies that can’t deliver much more than 25 Mbps. What’s worse is that the winners don’t have to finish building new networks until 2025. When the FCC blessed the use of the 25/3 threshold in the reverse auction they also blessed that 25/3 Mbps broadband will still be adequate in 2025.

The next FCC decision that is hurting these specific counties is when the FCC decided to allow satellite broadband companies to bid for scarce federal broadband grant monies. The FCC probably thought they had no choice since the satellite providers can meet the 25/3 Mbps speed threshold. This was a dreadful decision. Satellite broadband is already available everywhere in the US, and a grant given to satellite broadband brings no new broadband option to a rural area and only pads the bottom line of the satellite companies – it doesn’t push rural broadband coverage forward by a millimeter.

Finally, the FCC recently rubbed salt in the wound by saying that areas that got a previous state or federal broadband grants won’t be eligible for the additional federal grants out of the upcoming $20.4 billion RDOF grant program. This means that a county where a broadband grant was given to satellite provider is ineligible for grant money to find a real broadband solution.

Such counties are possibly doomed to be stuck without a broadband solution due to this chain of decisions by the FCC. I’m sure that the FCC didn’t set out to hurt these rural counties – but their accumulated actions are doing just that. Each of the FCC decisions I described was made at different times, in reaction to different issues facing the FCC. Each new decision built on prior FCC decisions, but that culminated in counties with a real dilemma. Through no fault of their own, these counties are now saddled with satellite broadband and a prohibition against getting additional grant monies to fund an actual broadband solution.

A lot of this is due to the FCC not having a coherent rural broadband policy. Decisions are made ad hoc without enough deliberation to understand the consequences of decisions. At the heart of the problem is regulatory cowardice where the FCC is refusing to acknowledge that the country has moved far past the 25/3 Mbps broadband threshold. When 2/3 of the country can buy speeds in excess of 100 Mbps it’s inexcusable to award new grant monies for technologies that deliver speeds slower than that.

It’s obvious why the FCC won’t recognize a faster definition of broadband, say 100 Mbps. Such a decision would instantly classify millions of homes as not having adequate broadband. There is virtually no chance that current FCC will do the right thing – and so counties that fell through the regulatory cracks will have to find a broadband solution that doesn’t rely on the FCC.