People understand broadband, they just can't always afford it

20 January 2016 by Steve Blum

Any questions?

In the I’ve been meaning to write about this file is the Pew Research report released last month that showed a dip in fixed home Internet access and a corresponding blip in mobile-dependent households. Overall, the report says the national consumer broadband adoption rate is staying steady at about 80% of homes. But at the margins, where cost is critical, more people are putting smartphones ahead of wired (or, presumably, fixed wireless) service.

Cost is also the issue for people who have no broadband service at all. The general value proposition is well understood. But the money isn’t there…

Roughly two-thirds (69%) of Americans indicate that not having a home high-speed internet connection would be a major disadvantage to finding a job, getting health information or accessing other key information – up from 56% who said this in 2010.

Among non-broadband adopters, 33% cite the monthly cost of service as the main reason they lack broadband at home, with an additional 10% citing the cost of a computer as their main reason for not having broadband service.

These changes are related: Non-broadband adopters who view a lack of home service as a major disadvantage are also more likely to cite the monthly cost of broadband as the primary reason they do not subscribe. Price sensitivity, in other words, is greatest among those who are most likely to see the advantages of a home broadband subscription.

The results are consistent with a Benton Foundation meta-study that also said it’s about the money, and a Federal Communications Commission experiment that showed that digital literacy classes – often mischaracterised as adoption programs – don’t produce more broadband subscribers.

It’s about the money. There are two ways to solve the problem: lower the cost – like, maybe more competition? Naw, that’d never work – or increase the personal value proposition.