Study Shows Rural US Not Buying High Speed Access

By Gary Kim June 02, 2014

With the caveat that it is Internet service providers happy with their supplied services, the latest study from NCTA: the Rural Broadband Association reports that small ISPs (telcos) have take rates of about 72 percent.

About 34 percent of customers buy access at speeds between 3 Mbps and 4 Mbps. Some 8.5 percent of customers buy connections at 10 Mbps.

About 8.2 percent buy service at rates between 6 Mbps to 10 Mbps, while six percent buy access at speeds between 4 Mbps and 6 Mbps.

Though 66 percent of households have a choice to buy service at 10 Mbps or faster, only about half choose to do so.

The U.S. Census Bureau separately estimated that 74 percent of rural households could buy 10 Mbps Internet access service in 2010.

Nearly 28 percent of households report they do not buy high speed access from the local telco. What is unclear is whether such households do not use high speed access, or choose to buy from another service provider (cable TV, satellite or fixed wireless, for example).

In 2005, for example, about six percent of rural households reported buying satellite Internet access, according to one study. Another study suggested satellite broadband penetration was about three percent in 2011.

The average NTCA survey respondent serves 4,565 residential and 1,649 business voice grade access lines. A few larger companies skew these numbers upward; hence the median respondent serves 1,921 residential and 500 business lines.

About 42 percent of survey respondents’ service areas are 500 square miles or larger. Some  20 percent of rspondents serve areas of at least 2,000 square miles.

Nearly 65 percent of respondents have customer densities of 10 residential customers per square mile or less.

Approximately 26 percent of respondents have customer densities of two residential customers per square mile or less.

Typical prices charged range from $34.95 to $44.95 for cable modem service, $29.95 to $49.95 per month for DSL service, $39.95 to $49.95 for wireless broadband service, and $39.95 to $59.95 for fiber-based broadband service, NTCA says. 

Edited by Maurice Nagle

Contributing Editor

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