The Increasing Importance of Broadband

4cb1f2dc96040Anybody who does what I do for a living has all sorts of evidence that the demand for broadband has been growing. For example, I have worked with rural communities without broadband for many years and have found that the number of people in those communities who say they will buy broadband is growing larger every year. I now have clients who have built rural networks and who have gotten 75% to 80% of the customers in the market footprint. These kinds of take rates would have been extraordinary five years ago but are now becoming the expected.

Pew Research Center has done a new survey that tries to quantify the importance that people place on broadband. They gave this same survey in 2010 and the new survey lets us see how the response to questions about broadband have changed over time. Here are a few of the new results:

  • 52% of people feel that those without the Internet are at a major disadvantage for finding out about job opportunities or obtaining new career skills. Only 25% thought that this is not a disadvantage.
  • 46% thought those without broadband are at a major disadvantage for learning about or accessing government services.
  • 44% think lack of broadband is a disadvantage for learning new things that will improve or enrich people’s lives.
  • And probably most significant, 69% of respondents in general felt that people without internet access have a major disadvantage.

We can also see how those same three responses have changed just since 2010.

  • Those that feel that the Internet is needed for job skills has grown from 43% to 52%.
  • Those that feel that the Internet is needed for access government services has grown from 29% to 46%.
  • Those that feel that access to broadband enriches people’s lives has grown from 41% to 44%.
  • In 2010 56% of people overall thought not having access to the Internet was a disadvantage, and that is now 69%.

For every question studied the percentage of African-Americans, Hispanics and young adults (ages 18-29) that thought the Internet was vital was higher than other groups.

Interestingly, those without home broadband access at home were slightly less likely to think that not having broadband is a major disadvantage. For example, in the recent poll 65% of them thought not having broadband was a major disadvantage compared to 69% of all respondents. But this is also the group that saw the biggest change since 2010 when only 35% of non-broadband households thought that was a disadvantage.

These kinds of surveys are interesting, but of course there are a hundred other questions you’d like to see asked. But sticking to the same questions that were asked in 2010 show how much the importance of broadband has grown in just five years.

I see this shift every day. I’ve been helping communities look for broadband solutions for nearly 15 years. Years ago when a community wanted to talk about broadband there were generally two reasons for it. First was economic development, meaning either attracting new jobs to a community or keeping the existing jobs from leaving. Secondly, communities wanted to get some price competition and thought that the incumbent providers didn’t care about their communities.

But today the demand for better broadband comes from citizens demanding a solution from local politicians. People hear of other communities that have found a way to bring broadband and they want the same. People without broadband are starting to feel like they are being left behind – and to a great extent they are. This kind of survey just reaffirms what we already know.

The Birth of a New Digital Divide

eyeballPew Research Center released some interesting data a few weeks ago that suggest that cord cutting might be starting to affect broadband connections and not just cable connections. According to a recent Pew poll, 67% of households now have a landline broadband connection, down from a high in 2013 of 70%.

When you consider both landline broadband and cellular data products together you get a slightly different story and the combination of the two services was 80% of households in 2015, up from 78% in 2013. Pew draws the conclusion that there is now a migration from households with a wireline connection to households that only use cellphone data. Pew reports that 13% of households now rely on cellphone data as their only connection to the Internet.

Luckily the latest Pew poll dug into this phenomenon in more detail and what they found was that 59% of all of the households using only cellular data do not buy a landline data product due to price. This matches very well with the report put out by the Brookings Institute last month that shows that landline broadband adoption rates are very related to income.

But Pew is the first one to suggest that there is an overall drop in landline broadband adoption. For example, when the major ISPs release customer counts every quarter there has been a steady and noticeable overall growth in broadband customers. Within those statistics there has been a steady and noticeable drop in DSL customers and an increase in cable modem customers, but overall the trend has always been upward.

But if the Pew numbers hold up to be right over time, then this might suggest that we are going to reach a market cap on broadband customers that is lower than what the industry has been expecting. And this cap will be driven by the price of the products, not the desire of homes to have broadband.

I was just reminiscing about the changes in prices in the industry the other day. I can remember back to a time in the mid-90s when I paid $19.95 a month to AOL, something a little less than $30 for my landline from Verizon, and around $50 for a cable package that included some movie channels. That was the whole triple play for $100 per month.

But today the cost of telecom products is much higher and has grown much faster than inflation. We now have households where most of the family pays at least $50 each for a cellular line (not including the cost of the phone). While there are still some inexpensive DSL plans available in some places, it costs at least $50 per month to get a decent data speed. And the big cable companies all report the average revenue from all of their cable plans is more than $70 per month. Only about half of households still have landlines and those can vary anywhere from $20 to $40 per month. And the costs don’t stop there. Most people are paying for settop boxes and cable modems, the prices on both have crept up to $7 – $8 each. And all ISPs now have a range of ‘fees’ that many people assume are taxes but which go straight into the ISP’s pockets.

And then there are the new services that weren’t around in 1995: a lot of houses now pay for Netflix and possibly for music services like Spotify, people must now buy cellphones that are generally obsolete every two years, and on top of those prices the carriers want to tack on handset insurance and other fees to cellular bills. Finally, there are data overages. Today that mostly affects cellphone users but, as seen by the rash of complaints against Comcast, is likely to start affecting landline data bills as well.

While it’s possible to work hard and find bundles to try to hold these costs down, without bundles these equate to telecom bills north of $300 per month. And even those that bundle would have a hard time buying these all of these things for under $200 per month.

So it’s not hard understand why households find they can’t afford all of these things. It’s hard to imagine any household that wants to partake in modern services like Netflix being satisfied with only cellular data and its tiny caps. But if you are on a budget something has to give and it’s pretty easy to understand that somebody is going to value a smartphone over a home Internet connection if you can only afford to buy one of them.

When you consider that the ISPs all intend to start increasing the cost of broadband annually like they have always done with cable then one can expect this situation to get worse over time. This means there will be a whole new digital divide defined strictly by income. People will want the products in the market but will be unable to afford them.

How We Deal with Surveillance

SpyVsSpyThe fact that governments spy on us has been in the news a lot in the last two years since Edward Snowden revealed the extent of the US spying. It’s not just the US government; similar revelations have come out even in countries like Canada.

The folks at the Pew Research Center asked Americans how the knowledge that they are being watched has changed their behavior. Not surprisingly, a pretty large majority of people have made no changes. But the survey found that some people have changed their behavior, and here are some of the key findings in this survey:

  • 87% of people said that they had heard about the government surveillance. Only 31% said they had heard a lot about it and 56% said they had heard a little about it.
  • 34% of those who were aware of the surveillance had made at least one change to shield or hide their information from the government.
    • 17% changed their privacy settings on social media
    • 15% have used social media less often
    • 15% have begun avoiding apps that want access to their personal data
    • 14% say they are speaking to friends in person rather than communicating online or using the Internet
    • 13% uninstalled apps
    • 13% have edited themselves so as not to use what they consider to be sensitive terms online
  • Those who have made changes tend to be younger than 50 and also to be in the category of those who heard a lot about the surveillance, or who thought that the surveillance was not in the public’s interest.
  • Many people just cut back on using certain applications or have modified the way they use them. 18% did this with email, 17% with search engines, 15% with social media sites, 15% with cellphones, 13% with mobile apps, 13% with text messages, and 9% with landline phones.
  • 25% of people have started using more complex passwords.
  • Most people either do not know about or have not considered using tools that make it harder to track them. The percentages of people in these categories for various anti-surveillance tools include: 68% for search engines that don’t track you, 59% for email encryption software, 74% for browser plug-ins like DoNotTrackMe or Privacy Badger, 74% for proxy servers, and 70% for anonymity software like Tor.

The survey also asked how people feel about government surveillance and the results were mixed. 40% of Americans found it acceptable to monitor other Americans, 54% to monitor citizens of other countries, 60% to monitor leaders of both the US and of other countries, and 82% for monitoring ‘terrorists’.

Of those who are aware of the surveillance, 61% said that they are not confident that surveillance is serving the public interest. Republicans and those leaning Republican were more likely than Democrats to say they are losing confidence in surveillance.

In an interesting divide of opinion, 49% thought that courts were doing a good job of balancing the needs of intelligence against the rights to privacy while 49% thought they were not.

And finally, when asked how people felt about the government looking at their own personal data, 38% were concerned about emails, 39% were concerned about search engine results, 37% were concerned about cellphone usage, 31% were concerned about social media, and 29% were concerned about mobile apps.

I know I personally have cut way back on my viewing of cat videos. After all, I don’t want the government knowing I am a crazy old cat man (which unfortunately might be the case!).

Pew Research Privacy Studies

SpyVsSpyPew Research recently took two separate looks at the issue of privacy. First, they conducted a survey to see how the general public in the US feels about on-line privacy. They also polled 2,511 “technology builders, researchers, managers, policymakers, marketers, analysts and those who have been insightful respondents in previous studies.”

Some of the more interesting results of the survey are as follows:

  • 91% of adults agreed that consumers have lost control of how personal information is gathered and used on the Internet.
  • 88% agree that it would be very difficult to remove inaccurate information about themselves online.
  • 80% who use social media are concerned that businesses are accessing what they share.
  • 64% thought the government should do more to monitor on-line advertisers.
  • 61% disagreed with the statement, “I appreciate that online services are more efficient because of the increased access they have to my personal data”.
  • But to show how mixed feelings are about online advertising, 55% agreed with the statement, “I am willing to share some information about myself with companies in order to use online services for free”. There must be people who agreed with this who also disagreed with the previous question.

There were also questions about government spying on Americans:

  • 95% were aware that the NSA is collecting telephone records and online records on everyone.
  • 80% were concerned that the government is monitoring phone calls and monitoring the Internet.
  • Only 36% agreed with the statement, “It is a good thing for society if people believe that someone is keeping an eye on the things they do online”.

People were asked which method of communications they felt most secure using. Following are the percentages of people that felt either somewhat secure or very secure: landlines – 67%; cellphones – 52%; email – 40%; text messages – 39%; IM or chat – 29%; and social media – 16%. These findings correlated well with knowledge of the NSA surveillance – the more somebody knew about the NSA the less secure they felt using communications.

Only 62% of people have ever used a search engine to look up their own name to see what is known about them on the Internet. 47% of people assume that people they meet will look them up. Only 6% of people have set an automatic alert to notify them when their name appears on the web.

People are cautious about posting controversial comments on the internet. 59% have posted using a screen name that people associate with them. 55% have posted using their real name, and 42% have posted anonymously.

24% say that their employer has rules or guidelines about how they are allowed to present themselves online. 11% say that their job requires them to promote themselves through social media or other online tools.

In the poll of the industry experts, only 55% believe that there will be a “secure, popularly accepted and trusted privacy-rights infrastructure by 2025”. The experts almost universally agree that we are living in a period of ubiquitous surveillance.

Many of the experts believe that it is not possible to create an effective privacy rights system. They believe that both government and industry have very little incentive to reverse the already invasive status quo and that they have much to gain from continued monitoring of information.

It’s obvious in looking at these results that people are aware of how ubiquitous surveillance is and that what they say on the Internet is seen by others. Most people are concerned about how the government or businesses view and use their information, and of the consequences of what they post with their employer. Of course, this still leaves me wondering how to explain drunk selfies!

Predictions Ten Years Later

Alexander_Crystal_SeerI often report on how industry experts see the future of our industry. It’s an interesting thought experiment, if nothing else, to speculate where technology is moving. In 2004 the Pew Internet Project asked 1,286 industry experts to look ten years forward and to predict what the Internet would be like in 2014. I found it really interesting to see that a significant percentage of experts got many of the predictions wrong. Here are some of the specific predictions made in 2004:

66% of the experts thought that there would be at least one devastating cyberattack within the following ten years. While there have been some dramatic hacks against companies, mostly to steal credit card numbers and related information, there have been no cyberattacks that could be categorized as crippling. The experts at the time predicted that terrorists would be able to take over power plants or do other drastic things that have never materialized.

56% thought that the internet would lead to a widespread expansion of home-schooling and telecommuting. There certainly has been growth in telecommuting, but not nearly to the extent predicted by the experts. It’s the same with home schooling, and while it’s grown there is not yet a huge and obvious advantage of home schooling over traditional schooling. The experts predicted that the quality and ease of distance learning would make home schooling an easy choice for parents and that has not yet materialized.

50% of them thought that there would be free peer-to-peer music sharing networks. Instead the recording industry has been very successful in shutting down peer-to-peer sites and there are instead services like Spotify that offer a huge variety of free music legally, paid for by advertising.

Only 32% thought that people would use the Internet to support their political bias and filter out information they disagree with. Studies now show that this is one of the major consequences of social networking, in that people tend to congregate with others who share their world view. This finding is related to the finding that only 39% thought that social networks would be widespread by 2014. The experts en masse did not foresee the wild success that would be enjoyed by Facebook, twitter and other social sites.

52% said that by 2014 that 90% of households would have broadband that was much faster than what was available in 2004. At the end of 2013 Leichtman Research reported that 83% of homes had some sort of broadband connection. That number was lower than predicted by the majority of experts, but what was even lower is the average speed that people actually purchase. Akamai reports that the average connection speed in the US at the end of 2013 was 8.7 Mbps. But this was not distributed in the expected bell curve and that average consists of a small percentage of homes with very fast connections (largely driven by Verizon FiOS and other fiber providers) but with many homes with speeds that are not materially faster than what was available in 2004. For example, Time Warner just announced this past week that they are finally increasing the speed of their base product from 3 Mbps to 6 Mbps.

32% thought that online voting would be secure and widespread by 2014. There are now a number of states that allow on-line voter registration, but only a tiny handful of communities have experimented with on-line voting. It has become obvious that there is a real potential for hacking and fraud with on-line voting.

57% of them thought that virtual classes would become widespread in mainstream education. This has become true in some cases. General K-12 education has not moved to virtual classes. Many schools have adopted distance learning to bring distant teachers into the classroom, but there has been no flood of K-12 students moving to virtual education. Virtual classes, however, have become routine for many advanced degrees. For example, there are hundreds of master degree curriculums that are almost entirely on-line and self-paced.

But the experts did get a few things right. 59% thought that there would be a significant increase in government and business surveillance. This has turned out to be true in spades. It seems everybody is now spying on us, and not just on the Internet, but with our smartphones, with our smart TVs, and even with our cars and with the IOT devices in our homes.

The Pew Institute continues to conduct similar surveys every few years and it will be interesting to see if the experts of today can do better than the experts of 2004. What those experts failed to recognize were things like the transformational nature of smartphones, the widespread phenomenon of social networking and the migration from desktops to smaller and more mobile devices. Those trends are what drove us to where we are today. In retrospect if more experts had foreseen those few major trends correctly then they probably would have also guessed more of the details correctly. Within the sample of experts there were undoubtedly some experts who guessed really well, but the results were not published by expert and so we can’t see who had the best crystal ball.

When Customers Comment

comment-boxPew Research Center has released another interesting poll that looks at how people interact with each other on social networks. There were two primary findings from that poll, which are both things that most of us have observed but that were interesting to see validated.

The first is that social networks tend to have a suppressive impact on the willingness of people to express personal opinions on a social network. On sites like Facebook and Twitter people tend to hang out with people of a like mind and this creates what Pew calls a ‘spiral of silence’. This is something I have always thought of as peer pressure. When people are on the same network with their kids, their parents, other relatives, their coworkers and their friends they tend to be reluctant to share views that they know are contrary or controversial to the views shared by their ‘friends’ on the social sites.

The study was conducted by looking at how willing people were to discuss the Edward Snowden – NSA story about the government spying on apparently everybody in the world. It turns out that people were less likely to discuss the topic on Facebook and Twitter (42%) than they were when talking live with somebody (86%). It’s obvious that the peer pressure of a social network stops people from expressing views that they might freely express somewhere else.

That’s interesting, but the other finding is that an opposite thing happens when people post on other sites like newspapers or customer service sites. There, the peer pressure seems to have the opposite effect and people tend to pile on to negative comments made by others. It’s almost as if seeing a negative comment gives them the courage to also say something negative. Anybody who owns a web site with a customer service contact page that that allows public comments knows about this phenomenon. On such sites many people will say things that they would never say in public and comments can quickly escalate and get incredibly nasty.

This creates a real dilemma for a company that wants to maintain a place for customers to comment, seek help or ask questions on the web. Many companies have shown that having a public forum can be an extremely effective way to identify problems that they might otherwise never know about. And the web creates a way to respond and often solve problems quickly.

But you need to have a thick skin if the comments on your site take a turn towards the ugly. One angry comment can lead to another until your site is flocked by angry people, many who might not even be your customers. All of the social media experts I read recommend that a company must engage customers in this sort of situation rather than withdraw or delete comments. They say experience shows that when a company addresses hostility in a reasonable, calm, persistent and truthful way that the company will be viewed as more human.

If you can further demonstrate that you are willing to solve some of the problems that caused the comments to escalate it’s quite possible to win some of your detractors over to your side. It seems that the phenomenon of piling on to negative comments, perhaps described as negative peer pressure, can be defused by reasonable tactics by a company.

You can’t wade into such a situation and just try to mollify people by being nice. That is the sort of behavior that people expect from customer service reps on the phone and they generally don’t like it on line. Instead you can feel free to disagree with people as long as you are doing so with facts and respect.

There are going to be angry people that you cannot mollify or even have a discussion with and sometimes the comments might get so vile that you will have little choice but to delete or ignore them. But when people have legitimate concerns and they go overboard in expressing unhappiness and frustration you can usually win them over by providing facts and solutions. After all, anybody complaining on your site obviously has a vested interest in your product or service and they generally want to like it. Your job in this situation is to help them do so.

Threats to the Internet

The InternetThe Pew Research Center recently issued a report that looks at the various threats faced by the Internet going into the not-too-distant future of 2025. The report was prepared by inviting 12,000 industry experts to opine on the various issues and problems they see with the Internet going forward. While Pew received a wide array of responses they were able to boil the responses into four trends that might threaten the Internet as we know it:

Actions by nation-states to maintain security and political control will lead to more filtering, segmentation and balkanization of the Internet.

We are already starting to see this today. Governments now routinely disrupt the web at times of crisis as has happened recently in the Middle East. Numerous governments censor the web to some degree with the most blatant example being China. But many other countries do this to lesser extent. For example, the major ISPs in Great Britain routinely block content related to pornography, suicide, gambling, violence, weapons and even dating. People can go through a process to opt out of the blocking, but even with the opt-out there is content that is not available in the country.

Trust will evaporate in the wake of revelations about government and corporate surveillance and likely greater surveillance in the future.

This is somewhat related to the first item above, because the revelations related to the NSA spying have led many countries to begin the process of establishing firewalls around the data in their country. This is going to greatly hinder any world-wide cloud products and may even go a long way towards isolating a lot of materials from search engines.

But lack of trust also affects the people using the Internet and many are starting to look at web products and software that will disguise or hide their identity. Further, there is a segment of the population that refuses to use the web due to fear of surveillance. While NSA and government spying grab the headlines, many of the experts are more worried about the data-gathering efforts of large companies like Google and Facebook and the chilling impact that might eventually have on using the Internet.

Commercial pressures affecting everything from Internet architecture to the flow of information will endanger the open structure of online life.

This goes to the heart of the network neutrality battle going on in the US. If the major ISPs here begin giving preferential treatment to some content providers then the open web as we know it starts deteriorating. But the fear of the experts goes much farther than net neutrality. Many of them worry that the web is being consolidated into the control of a small handful of network and content companies in the same manner that has happened to cable companies and the media in the US. They fear that control of the Internet by a handful of corporations will lead to decisions about the web based upon short-term quarterly profits rather than doing what is best for the whole web.

Efforts to fix the TMI (too much information) problem might over-compensate and actually thwart content sharing.

There is already a lot of information on the web and it is actually already getting harder and harder to find exactly what you are looking for. And the amount of information available is climbing at a dizzying rate. The fear of many experts is that there will be software and companies that will filter the web for people and that these filters are liable to have as much of a negative influence on the web as censorship or other overt blocking of data. Any editing of data starts to look like censorship as soon as it introduces bias.

What Happened to the Digital Divide?

Internet Access Here Sign

Internet Access Here Sign (Photo credit: Steve Rhode)

There was hardly a time in the late 90’s and early 00’s when broadband was discussed that the topic of digital divide was not mentioned. Government entities, policy people and even service providers talked about solving the digital divide to make sure that everybody had access to the Internet. There were committees and commissions formed in many communities to help solve the digital divide and to make sure that every child had a computer and an internet connection.

From what I can see the topic has disappeared from discussion and I rarely seeing the topic discussed any more. Does this mean that the digital divide has been solved? Certainly there are a lot more households with Internet access today than a decade ago, but do the poorest households now subscribe to the Internet?

Before one can even answer the question we need to define what broadband is. The FCC defines broadband as the ability to get a landline service with a download speed of at least 4 Mbps and an upload speed of 1 Mbps. In most markets that is one of the lower-speed products available and speeds in metropolitan and suburban areas are now much faster than that. According the numbers released by the FCC in August of 2012 there were 19 million people in the US with no access to broadband and another 100 million with access to broadband but who do not purchase it. But there are many who dispute the way that the FCC counted the 19 million figure and think that the real number is much larger.

Another way to look at the market is by households and the Leichtman Research Group did a study in 2012 that showed that there are almost 81 million homes with broadband, or just at 70% of all households. That same study said that broadband penetration rates in homes with average household incomes under $30,000 had only a 52% broadband penetration rate while homes with incomes over $50,000 had a 97% penetration rate. Obviously there are a lot of households who feel they cannot afford broadband.

Today one has to ask if landline broadband is the only kind of broadband. For example comscore reports that 133 million people owned smartphones as of February 2013, or 57% of everybody over 13 years old. Certainly there are many people whose only Internet access is with a smartphone.

A Pew Research Center study released a study earlier this year of the Internet usage of teenagers between 12 and 17. This group uses the Internet more than any other age group and 95% of teenagers access the Internet at least one per month. But 25% of teenagers only have a smartphone to use for Internet access. One has to question if smartphone usage is really broadband. Certainly you can read news, update Facebook and play games on a smartphone. But it’s sheer torture to use a smartphone to write something even as long as this blog and it’s hard to see smartphones being a broadband substitute for school kids trying to do various types of homework. The smartphone wasn’t really designed to handle files in the same way as a laptop or computer.

One thing that is clear in the figures is that the lower the income the less likelihood that a household will find broadband to be affordable. And to me that says that we still have the digital divide. But for some reason, nobody is talking about it anymore.

One statistic that I found interesting is that the Leichtman report said that 90% of households with computers have broadband. When you compare that to the statistics that say that only 52% of households with household incomes under $30,000 have broadband it is also easy to say that an awful lot of those homes don’t have computers.

I remember a decade ago there were major programs developed to get computers into households, particularly households with children. I just did a Google search and found a few such programs are still active, like one in Chicago, but getting computers into homes was a major focus for my clients and the country as a whole a decade ago. And that seems to have basically dwindled away as a priority.

I don’t know the reasons for this, but I can postulate. Broadband access seems to be ubiquitous in middle class neighborhoods and it is now the rare house that doesn’t have a computer and Internet access. Perhaps everybody just assumes that this is now true everywhere, while it is not. If the FCC numbers are to be believed there are still 119 million people without Internet access. Back the babies out of that number and there are still a whole lot of people without broadband.

It seems to me that the digital divide hasn’t gone away at all. We have just stopped talking or caring about it. Maybe it’s time to put this back on the agenda.