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FCC broadband study suggests users don't know about broadband choices

The Federal Communications Commission released a survey today that confirmed one thing most of you might have guessed -- people wish high-speed Internet access were cheaper -- and also suggested that many of these would-be adopters have an exaggerated sense of what broadband costs.

As my colleague Cecilia Kang summarized earlier today, the FCC's survey -- undertaken as part of the commission's work on the National Broadband Plan it expects to present to Congress on March 17 -- found that 35 percent of adult Americans did not have broadband access at home.

The FCC press release (PDF) and the full report (PDF) cite three main reasons for this shortfall.

First, 36 percent of broadband non-adopters had affordability concerns -- monthly access fees, the cost of a computer, installation fees or the required long-term contract. Second, 22 percent pointed to what the FCC calls "digital literacy" issues, including worries about a lack of online skills or risks incurred by going on the Web. Third, 19 percent of broadband refuseniks said either the Internet as a whole was a waste of time or boring or that dial-up service was fine.

(Note that the survey, which interviewed 5,005 people between October and November of last year, found that 22 percent of Americans don't use the Internet at all and another 6 percent only go online outside of the home -- leaving just 6 percent logging on via dial-up. And of those dial-up users, only one-third said they couldn't get broadband at home ... not that this isn't a legitimate problem, seeing as I've heard this complaint from people just 30 miles from the District.)

Most of the study's findings seem plausible enough. But its affordability findings confuse me -- in particular, its conclusion that "Non-adopters concerned with cost would be willing to pay, on average, $25 per month for broadband."

But many of these people could probably beat that price today. Take a look at the entry-level prices of the most widely used options available around the Washington area:

Verizon charges $19.99 a month for digital-subscriber-line service with downloads of 1 million bits per second (Mbps) and uploads of 384 thousand bits per second (Kbps).

Comcast offers a $24.99/month 1 Mbps/384 Kbps "Economy" plan -- though that rate requires also paying for cable-TV or phone service from the Philadelphia, Pa.-based company. (Note that you'll have to plug in a street address to see this listing, and that the Economy plan appears after more expensive options.)

RCN, the cable firm challenging Comcast in the District, Falls Church and parts of Montgomery County, charges $19.99 a month for a 1.5 Mbps/384 Kbps connection.

Cox charges $29.99 a month for 3 Mbps/768 Kbps service if you order service at its Web site.

Don't get me wrong here; I'm not going to defend the current state of competition for Internet service or suggest that these companies couldn't do better. In particular, a lot of dial-up users might happily upgrade to a cheap but slow broadband plan just to get always-on access -- say, $10 or $15 a month for 512 kbps down and 256 kbps up, which could still allow Internet radio and voice calling. We could also stand to see better broadband-shopping tools -- the find-service page at DSL Reports can help, but it doesn't exactly match the ease and utility of the brilliant Kayak travel-shopping site.

But if people think that broadband always costs $50-plus a month, they're wrong.

Are you, or are people you know, reading this page on a sub-broadband connection? If so, what's held you all back? Tell me in the comments.

By Rob Pegoraro  |  February 23, 2010; 3:19 PM ET
Categories:  Policy and politics , Telecom  
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Comments

Actually, it was those who conducted the study who seemed unaware of broadband choices. How many of the people who were claimed to be without access "in their homes" actually had all the Internet they needed built into their cell phones?

Posted by: squirma | February 23, 2010 4:42 PM | Report abuse

I'm one of those (along with hundreds of neighbors in rural southwestern Va.) that only have access to dial-up unless we make the 20 mile drive in to town. Some of us have looked at satellite, but most have ended up going back to dial-up because the speed was about the same. Also, no cell coverage within 5 miles yet, and no cable within 5 miles either.

Posted by: ebraganza | February 23, 2010 5:00 PM | Report abuse

Dialup is fine with me. 'I'll have an old fashion bartender!'

Posted by: n7uno | February 24, 2010 6:00 AM | Report abuse

Note to ebraganza and others who think that satellite is only as good as dial-up, you really should check again because there are new systems that match DSL and cable

Posted by: andrea3 | February 24, 2010 6:48 AM | Report abuse

1.5 mbps is "broadband" in name only. Sure, it's better than dial-up, and it's fine for things like email and light web-surfing. But when most of us think of broadband, we think of things like Netflix streaming, downloading music and videos, and online gaming (don't forget about consoles). 1.5 mbps isn't really enough for those uses. Useful broadband probably starts around 5 mbps.

Many of us simply don't have all the choices cited, either. In my town, only one cable company offers speeds greater than the 1.5 mbps that has been addressed. I received an offer in the mail for $24.95 / month, 384kbps(!) DSL just yesterday from a local phone carrier.

I pay the cable monopoly $60 per month for 10 mbps, because it's only $5 more than 5 meg service. It's the only game in town. It's painful, but it would be even more painful to vote with my wallet and not have usable internet.

Of course users in more urban areas like the District have more choices. Rural users, however, often have no choice at all. That is what the study shows. It isn't just a matter of ignorance, as suggested by the article.

Posted by: bugmenot3 | February 24, 2010 6:52 AM | Report abuse

==============
==============
768K and 1 megabit: WTF?? You call that "broadband"?

ATT offers that too, but for $20 more, I got 18 megabit(!) service, which is TWO MEGABYTES per second!

THAT'S the way to download porn vids!

At that speed, you can grab everything on a rapidshare page in bulk without watching any with a free Firefox download manager add-in (I use "downloadthemall").

Then delete the vanilla vids and the shoes-in-bed, fake-moan Hollywood junk by opening each one locally on your PC where there's no lag time, leaving only the yankworthy amateur whip stuff!

--faye kane, homeless brain
Read more of my smartmouth opinions at http://tinyurl.com/fayescave

Posted by: Knee_Cheese_Zarathustra | February 24, 2010 8:40 AM | Report abuse

Ditto those rural folks who have commented. In central Texas I have 2 choices, a bad local ISP or satellite. After many years with the local ISP I switched to Hughes which if I paid enough for I could get all those things the urban user has (Streaming video, music and games). Sure it is better than dialup but out here you won't find it at the prices you suggest, Rob,

Posted by: lindav3 | February 24, 2010 8:49 AM | Report abuse

We're some of those folks 45 miles from the district. Comcast service starts 50 feet from our house, but the company refuses to wire us up. We have three choices: dial-up from Verizon (but no DSL as we're much too far from the local exchange), satellite service at $60/month for a slow download speed and a glacial upload speed, or the option we've taken, which is $60/month with a local wireless ISP -- http://www.loudounwireless.com -- for their lowest tier: 768kb down and 512Kb up. Our WISP service is obviously priced to compete with HughesNet, as that's our only real boradband-ish alternative, but I can't imagine anyone with DSL or cable as an option ever choosing them out of anything but disgust with the big boys. I love the service -- the speed beats dial-up by a mile, and I'm happy to be supporting a small business run by people I like -- but I certainly do wish it were cheaper.

Posted by: HaigEK | February 24, 2010 9:35 AM | Report abuse

@squirma: That's in the survey too: The chart on page 14 has 44 percent of home Internet users saying they used mobile broadband, either on a phone or on a computer.

@andrea3: Which are these new satellite systems? The last time I covered satellite access here, both HughesNet and WildBlue got clobbered in the comments.

@bugmenot3: I understand what you're saying--I have no problem paying $50 a month for a 15/5 Fios connection. But I think you're wrong to suggest that "most" people are going online to for "things like Netflix streaming, downloading music and videos, and online gaming (don't forget about consoles)." If you look at the FCC study--pages 16 to 19, in particular--you'll see that those multimedia uses ranked low among the people surveyed. Those numbers match my own perceptions: The new broadband users I've talked to are happy to be able to go online instantly and then see regular pages appear to snap onto the screen, compared to their slow progress over dialup.

@HaigEK: Is there a neighbor at the end of that closest Comcast drop? Under those situations, I'd ask if the neighbor would let you share their connection over WiFi--and, of course, offer to pay for half of their costs. It's not like the cable operator can complain about a lost business opportunity there.

- RP

Posted by: Rob Pegoraro | February 24, 2010 12:03 PM | Report abuse

People want, want, want, and think that they are entitled, but they never want to pay.

The telecom industry has made a massive investment in response to the whining only to have the population not buy the amount of bandwidth that could be delivered at reasonable rates. 95% of the country is now covered, but you're not buying and the TelCos are not getting the return on their investment that they need.

The telephone lines and equipment are not yours. They belong to private telephone companies who have made one of the hugest contributions ever made to this country's success. If you try to make them do more too fast, they will go out of business, unless you want your big daddy government to take over and support them with your tax money. You will pay to watch pirated movies and TV shows online one way or the other.

Rather than push the TelCos to do something that is not economically or, in many cases not physically possible due to the universe's physical laws, you should be pushing the IT industry to compress more data into each byte that it sends.

http://bit.ly/vqGUW

Posted by: websmith1 | February 24, 2010 6:11 PM | Report abuse

Verizon DSL in my area (coal country PA) is 58.99 a month for 1 Mbps (optimum speed, in real life, dial-up is faster). Comcast cable's service area ends 1/2 block from my house. The local cable company (J.B. Cable -- according to local lore, the J.B. stands for Just Barely -- rabbit ears are cheaper and get more channels) does not offer Internet at all, and said they never will since "no one in town has a computer" (almost true: there are more homes in my town with outhouses than computers). I was quoted $450 for installation and $149.99 a month for HughesNet. Cell phone Internet is about $70 a month. The only other option is dial-up.

Posted by: tenorlove | February 24, 2010 6:51 PM | Report abuse

My mom, who lives another time zone away, had MSN dialup for a decade because it was easy to use and she only did e-mail, photo sharing, etc. Then I finally talked her into getting DSL and bought her a Webcam. After a couple of Gmail video chat sessions, now she is a believer.

The price I pay for Comcast broadband is exactly the same as it was in 2002 when I first bought it. But it is several times faster now. Good deal, in my view. I cannot, however, say the same for Comcast cable video service, which keeps escalating in price without adding any significant value in the way of new channels. In fact, they keep removing channels from their analog feed (including a public university-based distance-learning channel!) to promote renting more digital set-top boxes. And to my eyes, the digital signal is worse than the analog one, particularly when displaying dark areas.

Posted by: 54Stratocaster | February 25, 2010 2:36 AM | Report abuse

@RP Yes, we're friends with the folks at the end of the Comcast line, but... First, I think Comcast's TOS expressly forbids sharing a connection. And second, our house is largely made of stone, theirs of stucco'd log, complicating any WiFi link. We'd likely need antennas on the exteriors of both houses (perhaps even directional point-to-point line-of-sight-ish antennas), wireless extenders on both sides, and cables snaking into each house to complete the line: Comcast to their router, to the repeater on their side, through their wall to an antenna, over the air to the antenna on our house, through our wall to our repeater, and finally onto our WiFi network. Just seems like too much trouble and up-front expense to me, and my neighbors are not technical at all. And there's no guarantee it would even work, given the fickleness of WiFi outdoors. It's a great idea, but I'm afraid it's just a little impractical. I might be warmer to it if I had a technically-inclined counterpart on the other end, but that's just not the case.

Posted by: HaigEK | February 25, 2010 8:34 AM | Report abuse

The example Internet services are misleading:

1. Verizon's price is for a very low monthly traffic level -- 250 MB I think. That's not enough more much of anything that you would call broadband. The next step up, 5 GB, costs $60/mo. And 700 mbps down and 300 mbps up are more typical speeds.

2. I doubt that 512/256 kbps are enough for satisfactory VOIP. I know that voice quality on the outgoing side was unacceptable at 300 kpbs using either Vonage or T-Mobiles VOIP service. 512 kbps both ways would work though.

3. What good is a nice price from a smaller cable provider in one area when that company doesn't offer service where one needs it?

4. And what about areas, mostly in rural America, where broadband is still not available at any price?

Posted by: beiserka | February 25, 2010 9:37 AM | Report abuse

@HaigEK: I would bet that 802.11n WiFi would easily span that distance, structures and all. (Even 802.11g gets through the plaster-and-lath walls in my house.)

@beiserka: Verizon doesn't impose bandwidth caps on its wireline services; I think you're thinking of its wireless plans. As for VoIP bandwidth, I based that estimate on what I remembered of Skype's recommendations--but it turns out they are even lower than I thought.

Again, complete unavailability of bandwidth is another thing entirely. But that's not what the FCC study found was the primary obstacle to broadband use--at least in people's heads.

- RP

Posted by: Rob Pegoraro | February 25, 2010 12:14 PM | Report abuse

@RP Maybe I'll perk up now that it's acting more like spring and give it a try. Thanks.

Posted by: HaigEK | February 27, 2010 2:01 PM | Report abuse

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