As Broadband Expands Rapidly, America's Poor Lag

Recession or no, more Americans are getting online via fast, higher-priced connections, a closely watched study of U.S. Internet use has found. As of April, 63% of U.S. adults had broadband Internet connections in their homes, according to the Pew Research Center. That's a big jump from a year earlier, when a comparable survey found that only 55% of U.S. adults had broadband access at home.

Survey participants reported they're paying an average of $39 a month for broadband service, up from $34.50 a year earlier. At $39 per month, the average price is as high as it was in 2004 before it fell for the next four years. More consumers regard a broadband Internet connection as a necessity akin to electricity or water service, says John Horrigan, associate director for the Pew center.

"Not very many people said they were cutting back on Internet service," Horrigan says. "They were more likely to be cutting back on their cell-phone plan or their cable TV service plan. It seems like broadband has a special place in the minds of people as something they would prefer not to give up."

Rural Nonusers: A Lesser Issue

The fresh research helps outline the challenges facing the Obama Administration as it determines how to distribute $7.2 billion in economic stimulus money for expanding broadband access. Despite deeper penetration and a growing willingness to spend more money on Internet access, 37% of U.S. adults remain without broadband.

Income remains one of the largest barriers. Of those respondents classified as non-Internet users, 82% reported incomes of $40,000 a year or less; almost half earn less than $20,000 annually. Only one-quarter live in rural areas, where telecom companies often view low population density as a disincentive to building broadband systems.

Pew's findings were presented at the National Broadband Strategy Symposium in Washington, an event held by the Internet Innovation Alliance, a coalition of businesses and nonprofit organizations that advocates the creation of a national broadband strategy.

Critics have long charged that the U.S. lags in broadband, citing figures from a study published regularly by the Organization for Economic Cooperation & Development, which places the U.S. 15th among developed countries in broadband deployments per 100 people. Scott Wallsten, vice-president and research fellow at the nonpartisan Tech Policy Institute in Washington, argued at the symposium that the OECD figures are flawed. He says per capita analysis doesn't account for different household sizes and can unfairly favor nations whose families tend to have fewer members, such as those in northern Europe. Even if "every household in the U.S. [were] connected to broadband, it would rank 18th in the OECD and in the low 20s among the rest of the world," Wallsten says.

Creating Jobs vs. Expanding Broadband

He also takes issue with aspects of the government's broadband stimulus package, including the requirement that the Federal Communications Commission build a nationwide broadband map showing in detail where existing infrastructure is located; $350 million was authorized for that purpose. Wallsten says it would be better and cheaper for existing government agencies—such as the Bureau of Labor Statistics, which regularly surveys consumer expenditures, and the Bureau of Economic Analysis, which tracks the spending habits of businesses—to simply ask a few questions about broadband in their regular surveys. "There is in the stimulus program way too much emphasis on mapping," he says. "We can do these surveys very inexpensively."

The government must also do a better job of explaining the goals of the broadband stimulus, Wallsten says. "It's not clear what the objective is, especially over the short term," he says. "Creating jobs and improving broadband are not the same thing." He argues that if the point is to improve access to broadband, then the government should emphasize getting low-income people online, such as by helping them acquire computers and pay for broadband access, even though these moves in themselves may not directly create many jobs.

What's more, the legislation gives too little guidance as to what yardsticks the agencies involved should use to determine success. "We really need to learn what works and what doesn't," he says.

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