Wednesday, December 3, 2008

Broadband is Demand--Not Supply--Constrained

Broadband access in the United States now is a demand-constrained "problem," not a supply-constrained issue, for the most part. That is not to deny there remain some homes too expensive to reach economically using wired networks. But it is hard to ignore existing satellite broadband, terrestrial wireless broadband and multiple mobile broadband networks in service, even when a wired connection is not available.

Indeed, a recent study by Connected Nation found that nearly one-half (44 percent) of those with no home broadband connection say "I don’t need broadband." That suggests availability is not the actual problem.

Likewise, the top barrier to computer ownership is also a perceived lack of need. Nearly two-thirds (62 percent) of those who do not own a computer say "I don’t need a computer," Connected Nation finds.

That isn't to say cost is not an issue at all. Nearly one-fourth (24 percent) of those who do not own a computer cite the up-front cost as a barrier. Similarly, nearly one-fourth of those without a home broadband connection say broadband is too expensive.

Four out of ten parents with children who are without a home computer see no need for having a computer in the home. And nearly one-third (30 percent) of parents with children who do not have a home broadband connection see no need for a broadband connection.

More than one-half (56 percent) of people with disabilities who do not own a computer see no need for having a computer in the home. Four out of ten people with disabilities who do not have a home broadband connection see no need for a broadband connection.

Predominantly, even in contexts with reliable supply of broadband, it is consumer demand for broadband that is the tallest barrier to adoption and represents America’s competitive vulnerability, Connected Nation argues.

For example, among residents with children at home but without a computer at home, 41 percent did not see a need for a computer at home and 30 percent did not see a need for a broadband connection.

So which segments are most commonly receptive to broadband and use of computers? Households with children who need Internet access for homework are a high-adopter segment. About 84 percent of households with children own a computer, compared to 74 percent computer ownership among all residents.

And 62 percent of households with children choose to subscribe to broadband services at the home, contrasting with the overall broadband adoption rate of 50 percent. Parents, therefore, generally recognize the importance of what broadband has to offer their children. However, even among these parents with children at home, 13 percent still do not own a computer and 38 percent do not have a broadband home.

According to consumers, the primary barrier to computer ownership and home broadband adoption is not expense or lack of available broadband service, but rather, a perceived lack of need. When asked why they don’t subscribe to broadband or why they don’t own a computer, consumers responded most often with, "I don’t need it."

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