Monday, April 13, 2020

How Extensive is U.S. Internet Access Coverage? How Close to Saturation?

The U.S. Federal Communications Commission has estimated that, by June 2018, 94 percent of people were able to buy internet access service at “broadband” speeds of a minimum 25 Mbps. Some 97 percent of people  could buy service at 10 Mbps or faster. Keep in mind that this is a measure of “coverage,” not buying behavior. 


It has been estimated that 0.4 percent of U.S. homes actually have zero fixed network suppliers. That number drops very close to zero if one includes coverage by two different satellite providers, each selling service of at least 25 Mbps. 


Still, there are possibly 3.4 million  to 4.9 million U.S. home locations not served by a fixed internet access provider, but able to use either satellite or mobile networks for connectivity. 


“Buying” is a different matter than coverage. 


If the U.S. population is 304 million persons, with an average household size of 2.5, then there are 121.6 million households. 


Somewhere between 15 percent and 20 percent of U.S. homes are “mobile-only” for internet access, which might represent as much between 18 million and 24 million households. Those customers choose not to buy fixed network internet access, for whatever reason they choose. 


If so, then the number of locations who might buy fixed network internet access is on the order of 97.6 million to 103.6 million sites. 


If take rates for all homes (including the vacant units) are about 80 percent, then we would expect total fixed network accounts to number about 97.3 million locations.


Leichtman Research Group estimates that the largest U.S. telcos and cable companies have about 101.2 million accounts, but that includes business accounts. That matches fairly well the estimate that total fixed network accounts should be about 97.3 million in number. 


The Federal Reserve estimates there are about 140 million housing units., defined as “a house, an apartment, a group of rooms, or a single room occupied or intended for occupancy as separate living quarters.” 


More than 16 million units are vacant at any particular time, leaving a total of perhaps 124 million units, which accords well with the estimate of 121.6 million households conducted above. 


To be more precise, we also would have to account for households that either choose not to buy, or cannot easily buy. Some of those latter cases might be boats that serve as a residence, trailers or rooms rented inside homes where the resident does not buy internet access because the owner or manager of the property supplies the access. 


The point is that there are very few U.S. locations that do not already buy some form of internet access--mobile or fixed or both. 


In mid-2018, at least 97 percent of U.S. home locations could buy internet access from a fixed network provider at a minimum of 10 Mbps. About 94 percent could buy service at a minimum of 25 Mbps from a fixed service provider. 


Some 90.1 percent of people were able to buy broadband service in excess of 100 Mbps and 68.1 percent could buy 1 Gbps services. 

source: FCC


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