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FCC Finds Broadband Is Expensive, People Are Strange, Uneducated
Ok. Now what?
by Karl Bode 02:09PM Tuesday Feb 23 2010
With the release of the FCC's national broadband plan just 22 days away, the agency has been slowly dribbling out information on their goals for the plan. Unfortunately, the details have been lacking. Their announcement that they wanted to bring "100 Mbps to 100 Million" was rather empty, given cable industry upgrades should deliver that without the FCC having to do anything. Details that have emerged indicate a plan that's well intentioned, but utterly fails to truly tackle a general lack of competition and the resulting problems (high prices).

The FCC today released the results of a new survey that at least identified high prices as a major problem. The suvery found a third of the country -- or 93 million Americans -- aren't connected to broadband at home. That's not particularly news, given another recent, larger survey by the NTIA found essentially the same thing. According to the FCC press release (pdf), the FCC conducted a national "random digit-dial survey" of 5,005 adults in October and November 2009. Users were asked whether they had broadband, how much they paid, and if not -- why not. Survey (available here, pdf) participants were paid $5 for their time.

Just 4% of those surveyed couldn't get broadband (that number jumps to 10% in rural markets, and includes satellite broadband, whose users will often insist it doesn't qualify). 36% of those surveyed (28 million adults) said they didn't have broadband because it was too expensive, either because the monthly fee was too high, they couldn't afford a computer, or didn't want to get locked into a long-term contract. 22% of non-adopters claimed they either didn't have the skills to use broadband, or were afraid of the dangers of going online (we can only assume they're not talking about Chuck Norris or Rick Astley).

Customers who say they couldn't afford broadband were subsequently asked by FCC pollsters how much broadband would have to be for them to buy it. 52% stated that the cost would need to be, on average, around $25 a month. 65% indicated they'd sign up for service were it around $20 -- which the survey estimated would bump U.S. broadband adoption six percentage points. Broadband service priced at $10 could bump adoption by eight percentage points, according to the study.

28% of those asked what price they'd need to see before they signed up for broadband responded by stating they "didn't know."
Some of the responses by those who found broadband too expensive are just peculiar, however. 28% of those asked what price they'd need to see before they signed up for broadband responded by stating they "didn't know." Another 20% subsequently stated they were not willing to pay anything for broadband -- after just having complained that broadband was too expensive. So yeah, that's helpful.

The FCC found that the average American who does have broadband pays about $41 a month, and that 70% of those polled pay for broadband as part of a bundle of telecommunications services. If you read the full study (pdf), you'll note the pollsters found that "half of those who receive their broadband in a bundle with other services cannot identify the Internet portion of their bill." That would seemingly speak to the issue of billing transparency, something we've argued should be cornerstone of the agency's agenda (along with below the line fees).

Other key findings:

Half of those who receive their broadband in a bundle with other services cannot identify the Internet portion of their bill
-latest FCC survey
•22% of Americans do not use the Internet at all.
•6% of Americans use dial-up as their main form of home access.
•Broadband adoption drops to 40% for homes with an income below $20,000.
•Just 35% of senior citizens (above 65) have a broadband connection.
•The average monthly bill for unbundled broadband: $46.25.

"The gap in broadband adoption is a problem with many different dimensions that will require many different solutions," said John Horrigan, who managed the survey. "Lowering costs of service or hardware, helping people develop online skills, and informing them about applications relevant to their lives are all key to sustainable adoption."

Aside from highlighting the high cost of broadband, the gist of this FCC release seems to be to prepare the public for the fact that the national broadband plan is going to lean heavily toward "digital education." There's some legitimate reasons to be wary of such campaigns, given that some of the programs we've seen proposed so far (like the NCTA's A+ program) seem to be little more than taxpayer-subsidized cable advertising campaigns dressed up as altruism. Some of this push to bring service to people who may not want it is about carriers wanting to use taxpayer dollars for a broadband equivalent of the "Got Milk?" ad campaign.

As for tackling high prices, the path also remains unclear. While the study illustrates high prices as an obstacle for adoption and does a nice job illustrating some of the societal reasons for affordability issues, there's again no real indication that the FCC is going to tackle the primary reason why broadband in the United States is so expensive: limited competition. Still, identifying real broadband hurdles using actual science is a refreshing change for an agency that has spent the last decade making policy decisions based on either incomplete or bogus data. 22 days and counting...


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cableguy0
Premium
join:2009-01-20
kudos:6

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reply to backfeed

Re: Not really a compelling

said by backfeed:

The large percentage of the low income crowd that I see is more compelled to buy cigarettes than broadband.
Very sad
I call this the "Net Zero" crowd.
--
GIT R DONE


backfeed
is giving feedback

join:2002-12-16
Peru, IN

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reply to manfmmd

The large percentage of the low income crowd that I see is more compelled to buy cigarettes than broadband.
Very sad
--
There are 10 types of people. Those who can read Binary and those who cannot.



pnh102
Reptiles Are Cuddly And Pretty
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join:2002-05-02
Mount Airy, MD

2 recommendations

Riddle Me This

quote:
•22% of Americans do not use the Internet at all.
•6% of Americans use dial-up as their main form of home access.
•Broadband adoption drops to 40% for homes with an income below $20,000.
•Just 35% of senior citizens (above 65) have a broadband connection.
•The average monthly bill for unbundled broadband: $46.25.

So why should the FCC care about this at all?
--
"Net Neutrality" zealots - the people you can thank for your capped Internet service.