U.S. Broadband Growth Bypasses Poor, African-Americans

fiber opticsBroadband adoption stalled for poorer families and African-Americans in the last year, even as the overall proportion of U.S. households with high-speed Internet connections grew to more than half.

A new study by the Pew Internet & American Life Project found that 55% of U.S. adults have broadband Internet access at home, up from 47% in March 2006 and 42% in early 2005.

But stagnant growth rates for lower-income Americans suggest that the faltering economy may be impeding adoption among those most vulnerable to the downturn. For people in households earning less than $20,000 annually, 25% had broadband service in 2008 compared to 28% a year ago.

"We read enough about higher gas prices and people tightening their belts to indicate that slower growth at the lower end of the income spectrum is due to economic worries," said John Horrigan, associate director of research at the Pew Internet project and author of the report.

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Adoption for African-Americans was also virtually unchanged in the last year, rising from 40% to 43%. And with overall broadband growth flat from the last quarter of 2007 to the first quarter of 2008, Horrigan suggested that it may reflect the economic pinch now being felt more widely.

Not everyone is balking at the higher cost of a high-speed connection. People age 50 and older, lower-middle-income earners, and rural Americans showed the strongest gains in signing up for broadband access. Each of those groups increased adoption by about 25%.

Nearly 30% of broadband users were willing to pay extra for advanced services such as fiber-to-the-home (FTTH) to get even faster connections. "That was a bit of a surprise to us--the level of people willing to pay for premium services," Horrigan said.

DSL remained the most prevalent technology for home broadband connections, edging out cable modems by 46% to 39%. Wireless access now accounts for 12% of the market, and fiber-optic, 2%.

Pricing has also held steady. The average monthly bill for broadband dropped slightly since December 2005, to $34.50 from $36. That's still significantly more than the $19.70 that dial-up Internet subscribers pay on average each month.

More than one-third (35%) of dial-up users said they would switch to broadband if it became more affordable, while 62% had no interest at all in upgrading. Almost a quarter of rural dial-up users said broadband was not available where they live.

Of the 27% of the population that does not use the Internet at all, age and income were key factors. Among Internet avoiders, 43% are over 65, and 43% have annual incomes under $30,000.

The Pew report was based on its April/May 2008 survey of 2,251 adults, of whom 1,153 were home broadband users.

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