Rural markets (population less than 10,000) in the U.S. experienced a 16-percentage point increase in broadband penetration from Q2 2007 to Q2 2009, making it the fastest growing geographic market segment in the nation. Comparatively, micropolitan areas (population between 10,000-50,000) grew 14 percentage points during the same period, while metropolitan areas (population 50,000+) grew 11 percentage points.
Broadband Penetration (% of Homes With Internet Connection, Total U.S.) | ||||
Geographic Area | Q2 2007 | Q2 2008 | Q2 2009 | Point Change Q2 2009 vs. Q2 2007 |
Metropolitan | 81% | 87% | 92% | 11 |
Micropolitan | 69% | 76% | 83% | 14 |
Rural | 59% | 66% | 75% | 16 |
Source: comScore, Inc., August 2009; Metropolitan defined as area with 50,000+ population, Micropolitan defined as area with 10,000-50,000 population. |
Brian Jurutka, vice president of telecommunications at comScore, notes that "... with low-speed DSL priced at about the same level as dial-up in many areas, there is little incentive for households to remain on dial-up."
Broadband penetration of 75% in rural markets remains well below the national average of 89%. Lower broadband penetration in rural areas is compounded by lower Internet usage overall of 63% of all rural households with at least one member access the Internet, compared with 73% of urban households.
The fastest growing local markets in broadband adoption were all smaller, ranking at or below #50 in terms of size. Ft. Myers - Naples was the fastest growing market with a 12-percentage point increase in broadband penetration from Q1 2008 to Q1 2009.
Fastest Growing Local Markets Based on Broadband Penetration Growth (Q1 2009 vs. Q1 2008, Total U.S) | ||||
Market | Market Size Rank | Q1 2008 | Q1 2009 | Point Change Q1 2009 vs. Q1 2008 |
Ft. Myers-Naples | 70 | 76% | 88% | 12 |
Flint-Saginaw-Bay City | 64 | 69% | 80% | 11 |
Louisville | 50 | 68% | 79% | 11 |
Evansville | 99 | 65% | 77% | 11 |
Tri-Cities, TN-VA | 90 | 60% | 70% | 10 |
Source: comScore, Inc., August 2009 |
In comparison, the nation's largest markets are closer to reaching saturation and experienced low single-digit growth.
Broadband Penetration in Largest National Local Markets Based on Market Size of Internet Households (Q1 2009 vs. Q1 2008, Total U.S.) | ||||
Market | Market Size Rank | Q1 2008 | Q1 2009 | Point Change Q1 2009 vs. Q1 2008 |
New York | 1 | 94% | 96% | 2 |
Los Angeles | 2 | 85% | 87% | 2 |
Chicago | 3 | 88% | 92% | 4 |
Philadelphia | 4 | 86% | 89% | 3 |
San Francisco-Oakland-San Jose | 5 | 86% | 89% | 3 |
Source: comScore, Inc |
While large broadband providers such as AT&T and Comcast have a presence in rural areas, smaller and more localized providers such as Cincinnati Bell, Insight, PenTeleData, Mediacom and Bresnan Communications are proving tough competition in the battle for market share.
And, the Leichtman Research Group study found that the nineteen largest cable and telephone providers in the US, representing about 93% of the market, acquired 634,000 net additional high-speed Internet subscribers in the second quarter of 2009. Net broadband additions in the quarter were the fewest of any quarter in the eight years LRG has been tracking the industry.
Other broadband findings for the quarter include:
Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc., summarizes by saying "The second quarter has proven to be traditionally weak for broadband growth, but with the market becoming more mature, broadband (additions) further waned in 2Q 2009... In a reverse of last year's second quarter, when cable operators got three-quarters of the net broadband adds, Telcos earned over 60% of the broadband net adds in 2Q 2009."
Broadband Subscribers (July 1, 2009) | ||
Broadband Internet | Subscribers at end of 2Q 2009 | Net Adds in 2Q 2009 |
Cable Companies |
|
|
Comcast | 15,322,000 | 64,000 |
Time Warner | 9,046,000 | 94,000 |
Cox | 4,110,000 | 30,000 |
Charter | 2,957,700 | 10,600 |
Cablevision | 2,503,000 | 18,000 |
Mediacom | 754,000 | 6,000 |
Insight | 481,500 | 3,000 |
Cable ONE | 386,472 | 371 |
RCN | 307,000 | 1,000 |
Other major private cable companies | 2,137,500 | 22,500 |
Total Top Cable | 38,005,172 | 249,471 |
| ||
Telephone Companies |
|
|
AT&T | 15,548,000 | 112,000 |
Verizon | 9,111,000 | 186,000 |
Qwest | 2,923,000 | 34,000 |
CenturyLink | 2,145,200 | 28,200 |
Windstream | 1,024,600 | 14,900 |
Frontier | 613,810 | 13,763 |
FairPoint | 296,107 | (4,775) |
Cincinnati Bell | 235,400 | 400 |
Total Top Telephone Companies | 31,897,117 | 384,488 |
Total Broadband | 69,902,289 | 633,959 |
Sources: The Companies and Leichtman Research Group, Inc. |
For additional information about these studies, please visit ComScore here, and the Leichtman Research Group here.
Any U.S. progress with broadband adoption, to catch up to the global market leaders, is encouraging.
However, the North American market is still significantly behind in deploying "real" broadband speeds to be competitive with the European and Asian market leaders.
That's why the U.S. still desperately needs a meaningful National Broadband public policy plan -- to make the nation competitive once again.