U.S. Internet Access Speeds are Climbing Rapidly

U.S. mobile and fixed network speeds are on a rapid climb. In 2018, mobile network speeds increased for all the four leading mobile service providers. AT&T average 4G speeds grew from about 43 Mbps to nearly 70 Mbps, on average. Sprint speeds climbed from less than 40 Mbps to about 65 Mbps.

T-Mobile US speeds were boosted from about 40 Mbps to 51 Mbps, while Verizon speeds were up from about 50 Mbps to 60 Mbps.

source: PCmag

Fixed network speeds speeds are climbing rapidly as well. In 2018 alone, average speeds climbed 36 percent in the U.S. market. In the third quarter of 2018, for example, average downstream speeds were 96 Mbps, upload speeds 33 Mbps.

source: Speedtest

Comcast, the largest U.S. fixed network ISP alone sells gigabit service to 58 million U.S. homes, and says it “has increased speeds 17 times in 17 years and has doubled the capacity of its broadband network every 18 to 24 months.”

Charter, the second-largest U.S. cable operator, sells gigabit service to at least 33 million U.S.homes. Since the footprints of the two firms do not overlap, those two companies alone can provide gigabit service to 91 million U.S. homes, roughly 70 percent of all homes in the United States.

Get Ready for Continued Boosts in Average U.S. Internet Access Speeds

It always is dangerous to rely on slow or ponderous measurement mechanisms when any process is changing rapidly, as is the case for U.S. fixed network internet access. Historically, the United States has ranked about 15th globally on measures of voice service adoption or internet access adoption.

source: CableLabs

Rankings for internet access speed have often shown lower rankings than 15th, globally. Fastmetrics ranked the the United States about 20th for fixed network speeds about the middle of 2018.

But speeds in the U.S. market are changing very rapidly, largely on the strength of cable TV fixed internet services. The latest Speedtest global comparison shows rapidly-increasing U.S. internet access speed, which improved about 36 percent in one year.

But 5G also will boost average mobile speeds significantly as well. Mobile speeds are one example, where the United States in 2019 ranked about 30th globally. All that is likely to change as 5G coverage spreads.

It is not just that 5G will provide an order of magnitude (higher in some cases) boost in speeds. On a comparative basis, the U.S. market is a first mover on 5G, so will reap the benefits while most other countries have not yet launched 5G.

It seems always to be the last seven percent of households that lag average U.S. internet access speeds and availability.

If there are about 130 million U.S. housing locations, that implies the number of households not reached by cable networks is perhaps nine million locations.

Telco networks probably reach about 98 percent of housing locations. That does not mean seven percent of U.S. homes have no fixed network internet access, or that they have no ability to buy internet access.

What those numbers mean is that, altogether, 93 percent of homes have access to 25 Mbps fixed network service (the minimum definition of “broadband”), with nearly 100 percent access to 25 Mbps or 30 Mbps by satellite.

Most of the homes that cannot buy a fixed network “broadband” service, using the current definition, can buy service at lower speeds. It always is the last couple of percent of homes in the most-isolated areas that have issues with coverage or speeds.

source: FCC

The issues with the last few percent of locations will remain. But there is every reason to predict a dramatic increase in typical U.S. internet access speeds as 5G is introduced, at least in part because fixed wireless will boost speeds, in part because mobile 5G will start to become more attractive as an alternative to fixed connections and because cable operators will continue to push speeds to stay ahead of those developments.

Irresistible Storylines That Always are Wrong

Some storylines are irresistible. Slow U.S. 5G speeds provide an example. A classic storyline about U.S. telecommunications is “U.S. is behind.”

Author Steven Pressfield, in his book Nobody Wants to Read Your Sh*t, points out the elements of any story. These universal principles of storytelling include:

1) Every story must have a concept. It must put a unique and original spin, twist or framing device upon the material.

2) Every story must be about something. It must have a theme.

3) Every story must have a beginning, a middle, and an end. Act One, Act Two, Act Three.

4) Every story must have a hero.

5) Every story must have a villain.

6) Every story must start with an Inciting Incident, embedded within which is the story’s climax.

7) Every story must escalate through Act Two in terms of energy, stakes, complication and significance/meaning as it progresses.

8) Every story must build to a climax centered around a clash between the hero and the villain that pays off everything that came before and that pays it off on-theme.

That is a framework often used when writers talk about the state of U.S. telecommunications. U.S. 5G speeds are slow, compared to most other markets. There are reasons. U.S. service providers are relying on low-band spectrum for coverage, and that necessarily limits speeds. Most of the leading U.S. mobile operators, with the exception of T-Mobile, have little mid-band spectrum, which is the preferred band globally.

So U.S. mobile speeds are slow, and have been relatively slow, even for 4G services. 

That is a necessary evil at the moment, as there is little unencumbered mid-band spectrum available at the moment, in the U.S. market, though that will change as more mid-band spectrum is reallocated for mobile use. 

But the “U.S. is behind” storyline has been used often over the last several decades. Indeed, where it comes to plain old voice service, the U.S. is falling behind meme never went away.

In the past, it has been argued that the United States was behind, or falling behind, for use of mobile phones, smartphones, text messaging, broadband coverage, fiber to home, broadband speed or broadband price. 

In the case of mobile phone usage, smartphone usage, text message usage, broadband coverage or speed, as well as broadband prices, the “behind” storyline has proven incorrect, over time. 

Some even have argued the United States was falling behind in spectrum auctions. That clearly also has proven wrong. What such observations often miss is a highly dynamic environment, where apparently lagging U.S. metrics quickly are closed.

To be sure, adoption rates have sometimes lagged other regions. Some storylines are repeated so often they seem true, and lagging statistics often are “true,” early on. The story which never seems to be written is that there is a pattern here: early slowness is overcome; performance metrics eventually climb; availability, price and performance gaps are closed over time. 

The early storylines often are correct, as far as they go. That U.S. internet access is slow and expensive, or that internet service providers have not managed to make gigabit speeds available on a widespread basis, can be correct for a time. Those storylines rarely--if ever--hold up long term. U.S. gigabit coverage now is about 80 percent, for example. 

Other statements, such as the claim that U.S. internet access prices or mobile prices are high, are not made in context, or qualified and adjusted for currency, local prices and incomes or other relevant inputs, including the comparison methodology itself. 

Both U.S. fixed network internet prices and U.S. mobile costs have dropped since 2000, for example. 

The point is that the “U.S. is behind” storyline seems irresistible. That storyline has always proven incorrect, though, over time. The historically-accurate storyline is that “slow start” is what we see. Over some time, U.S. metrics tend to rise to about 12th to 15th globally, but no higher, ever. 

The bottom line is that it is quite typical for U.S. performance for almost any important new infrastructure-related technology to lag other nations. It never matters, in the end. 

Eventually, the U.S. ranks somewhere between 10th and 20th on any given measure of technology adoption. That has been the pattern since the time of analog voice. 

We often forget that six percent of the U.S. landmass is where most people live. About 94 percent of the land mass is unpopulated or lightly populated. And rural areas present the greatest challenge for deployment of communications facilities, or use of apps that require such facilities.

Truth, Lies, Statistics

Language always matters. Definitions and assumptions always matter, because the truth matters. Methodology matters, in that regard. 

The NPD Group says only 50 percent of homes in the continental U.S. have “true broadband speed of 25Mbps download or higher.”

That can be--and will be--interpreted at least two ways. It could mean that internet service providers are way behind the curve in making quality broadband available, or it could mean that consumers choose not to buy it. 

The former is a failure of supply; the second is a consumer choice. It matters which we are talking about. In fact, Openvault test data does not support the NPD assertions. In the third quarter of 2021, for example, 9.8 percent of actual consumers had test data showing downstream speeds “less than 50 Mbps.”

The percentage of customers unable to get 25 Mbps obviously is less than that. 

Though “average” speeds change all the time, the Openvault data show that by the third quarter of 2021, about 66 percent of all U.S. internet access buyers were getting speeds between 100 Mbps and 400 Mbps. 

source: Openvault 

While it might have been true that half of U.S. consumers were buying services operating between 100 Mbps and 200 Mbps a year earlier, it was by the third quarter of 2021 very hard to determine how many were really buying services unable to meet the FCC definition of 25 Mbps downstream. 

What also is undeniable is that most speed tests are conducted by consumers using Wi-Fi. That means the tests understate speed, as Wi-Fi speeds often are many times slower than delivered ISP speed. 

The point is that ISP delivered speeds quite often degraded by performance of the in-home Wi-Fi networks, older equipment or in-building obstructions. Actual speeds delivered by the internet service provider to a router are one matter. Actual speeds experienced by any Wi-Fi-connected device within the home are something else. 

source: CMIT Solutions 

In practice, Wi-Fi speeds can be an order of magnitude slower than the speed actually delivered by the ISP. So when a consumer using Wi-Fi measures 25 Mbps, the delivered speed can be as much as 250 Mbps. 

NPD Group says about its methodology that “the report is based on a combination of sales data, speed test results, consumer surveys, FCC data and other sources.”

That implies demand side dales data and speed test results. Consumer surveys can be either demand or supply side based. The Federal Communications Commission data tends to be supply side (state of facilities and availability). 

To be clearer, what NPD likely means is that 50 percent of U.S. consumers choose to buy internet access at speeds less than 25 Mbps. But that cannot be true, if other demand side studies are correct. 

The storyline that U.S. internet access is slow or expensive seems irresistible, even if it is questionable. A study by Speedtest of 2020 internet access speeds showed the United States had the highest performance of all countries who are members of the G-20. 

 

source: Ookla

So much for the demand side. On the supply side, 

A recent study by the European Telecommunications Network Operators association says prices are not high.  

“In fact, 34 percent of homes receive internet access at speeds of less than 5 Mbps, including 15 percent  that do not have any internet access. The key phrase is “receive.” It is the speed they purchase. 

There are other important nuances. When do people take speed tests? Primarily when they are having a problem. Almost nobody routinely takes speed tests when performance is untroubling. So there is a bias to the taking of speed tests when networks are most congested. 

Is it possible that half of U.S. homes do not receive 25 Mbps? It seems highly doubtful. If there are 10 concurrent devices active inside a home, might each device see performance that looks like “less than 25 Mbps?” That is possible, if all 10 devices are simultaneously active and delivered speed is about 250 Mbps and all the devices use Wi-Fi.

But to argue that “half of U.S. homes” do not “receive” 25 Mbps seems contradicted by available data on actual usage. And that is just the demand side.

Between 60 percent and 80 percent of U.S. home locations can buy gigabit service if they chose to do so. Not all do so. 

But that reflects a consumer choice, not a failure of supply. 

It is highly likely that at least 80 percent of U.S. homes can buy internet access at speeds no lower than 500 Mbps and 1 Gbps if they choose to do so. Over time, as average supplied speeds climb, they will eventually do so. 

Digital Redlining or Response to Demand?

Terms such as digital redlining imply that U.S. internet service providers upgrade neighborhoods able to pay for higher speed internet access underinvesting in poorer neighborhoods. At some level, it is hard to argue with that point of view, at least where it comes to gigabit internet access. 

Google itself pioneered the tactic of building in neighborhoods where there is demonstrated demand, building Google Fiber first in neighborhoods (typically higher-income areas) where potential customers were most interested. Other gigabit service providers have used the placing of deposits for the same reason. 

And regulatory officials at the local level seem to now agree that “universal service” (building a gigabit network past every home and business) is desirable in some cases, but not absolutely mandatory in all cases. The thinking is that allowing new internet service providers or facilities to be built wherever possible is a better outcome than requiring ubiquity, and getting nothing. 

Also, higher-speed facilities often are not found everywhere in a single market or city. CenturyLink does sell gigabit internet access in Denver, just not everywhere in the metro area. That is not necessarily “redlining,” but likely based on capital available to invest; expectations about financial return; customer density or any other combination of business issues that discourages the investment in new access facilities. 

The economics of communication networks also are clear. Density and cost per location are inversely related. Mobile networks typically have 10 percent of cell sites supporting 50 percent of usage. About 30 percent of sites carry about 80 percent of traffic. That has been true since at least the 3G era.  

In fixed networks, network cost and density also are inversely related. So population density has a direct bearing on network costs. In the U.S. market, network unavailability is concentrated on the last couple of percent of locations.  

With cable operators already holding at least 70 percent share of the internet access installed base of customers, any new investment in faster facilities faces a tough challenge. Any new fiber to home network, for example, essentially is playing catch-up to a cable operator, as roughly 80 percent of U.S. households already also are reached by gigabit speed cable networks. 

And cable share has grown, up from possibly 67 percent share in 2017. 

That noted, internet speeds do vary by geography: speeds in urban areas frequently are higher than in rural areas. But the argument that large numbers of U.S. households are underserved often is correct, depending on what standard one wished to apply, and how one defines the supplier market.

Some claim 42 million U.S. residents are unable to buy broadband internet access, defined as minimum speeds of 25 Mbps in the downstream.  That actually is incorrect. 

Virtually every household in the continental United States is able to buy 25 Mbps or faster service from at least two different satellite providers. But those who claim “42 million” people cannot buy broadband simply ignore those choices, and focus only on the claimed availability of 25 Mbps service by fixed network providers. 

There are other estimates which also vary wildly. Roughly 10 percent of U.S. households are in rural areas, the places where it is most expensive to install fast fixed network internet access facilities, and where the greatest speed gaps--compared to urban areas--almost certainly continue to exist.

In its own work with TV white spaces, Microsoft has targeted perhaps two million people, or roughly a million households, that have no fixed network internet access. That assumes there are two people living in a typical household, which is below the U.S. average of roughly 2.3 to 2.5 per household.

Recall that the definition of broadband is 25 Mbps downstream. Microsoft has argued that 20 million people (about 10 million homes) or perhaps eight percent of the population (perhaps four percent of homes) cannot get such speeds from any fixed network service provider.

Microsoft also has cited figures suggesting 25 million people cannot buy broadband--presumably using the 25 Mbps minimum standard, most of those people living in rural areas. 

That conflicts with data from Openvault that suggests 95 percent of the U.S. population can buy internet access at a minimum of 25 Mbps, while 91 percent to 92 percent can buy service at a minimum of 100 Mbps. 

Using the average 2.5 persons per U.S. household average, that suggests a universe of about 10 million U.S. homes unable to purchase internet access at 25 Mbps from a fixed network supplier, in 2018. What is not so clear is the percentage of households or persons who can do so using a mobile network. 

None of that explains urban areas with slow speeds, though. There the issue is more likely to be high construction costs in urban areas where underground construction is necessary, along with demand expectations that are lower than in suburban areas. That is true whether it is electrical lines or communications networks being considered.   

But at least one Microsoft analysis suggests that about half of all U.S. households are not using 25 Mbps access. The claim is that 162.8 million people are “not using the internet at broadband speeds.” That seems to clearly contradict data gathered by firms such as Ookla and Opensignal suggesting that average U.S. speeds are in triple digits.

In 2018, the average U.S. broadband speed was 94 Mbps, according to the NCTA. That same year, Ookla reported the average U.S. speed was 96 Mbps. 

It is not quite clear how the Microsoft data was generated, though one blog post suggested it was based on an analysis of “anonymized data that we collect as part of our ongoing work to improve the performance and security of our software and services.” 

The claim of 162.8 million people “not using the internet at broadband speeds” (probably using 25 Mbps as the definition) equates to about 65 million households, using the 2.5 persons per household definition. That does not seem to match other data, including the statistics Microsoft itself cites. 

What remains difficult, but might explain the divergence, is if applications and services include both apps run on smartphones as well as PCs and other devices connected to fixed networks. That would explain the number of users, while usage on mobile networks might account for large numbers of sessions where 25 Mbps speeds downstream were not noted, or perhaps it was the upstream speed definition (minimum of 3 Mbps) that was the issue.  

Even then, downstream average 4G speeds in 2018 were in excess of 40 Mbps downstream, so even that explanation is a bit difficult. 

Perhaps there are other ways to make sense of the data. There is a difference between users (people) and households. There is a difference between usage and availability; usage by device (mobile, PC, tablet, gaming device, sensor); application bandwidth and network bandwidth. 

Perhaps the issue is application performance on a wide range of devices including mobiles and untethered devices using Wi-Fi, which would reduce average experienced speeds, compared to “delivered access speed.” 

Methodology does matter. So do the costs and benefits of broadband capital investment under competitive conditions, in areas with high construction costs or low demand for advanced services, especially when newer platforms with better economics are being commercialized. 

Telecommunications is a business like any other. Investments are made in expectation of profits. Where a sustainable business case does not exist, subsidies for high-cost areas or universal service support exist. 

The point is that every human activity has a business and revenue model: it can be product sales, advertising, memberships, subscriptions, tax support, fees, donations or inheritances. Children have a “parents support me” revenue model, supported in turn by any of the aforementioned revenue models. 

But every sustainable activity has a revenue model, direct or indirect. The whole global communications business now operates on very different principles than the pre-competitive monopoly business prior to the 1980s. We still have a “universal service” low end, but we increasingly rely on end user demand to drive the high end. 

Our notions of low end change--and higher--over time. We once defined “broadband” as any data rate of 1.544 Mbps or higher. These days we might use functional definitions of 25 Mbps or 30 Mbps. Recall that 30 Mbps--in 2020--was called “superfast” as a goal for U.K. fixed network broadband. 

Few of us would consider 30 Mbps “superfast” any longer. Some might say the new “superfast” is gigabit per second speeds. But that is the change in real-world communications over just a decade. What was a goal in 2010 now is far surpassed. 

What some call “redlining” is simply a response to huge changes in the internet access and communications business. “Maximum” is a moving target that responds to customer demand. “Minimums” tend to be set by government regulators in search of universal service. 

As independent internet service providers cherry pick service areas where they believe the greatest demand for gigabit per second internet access exists, so do incumbents. 

Similar choices are made by providers of metro business services; builders of subsea connectivity networks or suppliers of low earth orbit satellite constellations and fixed wireless networks. They build first--or pick customer segments--where they think the demand is greatest.

U.S. Broadband Faster, More Available Than in Europe, Study Finds

On some measures, U.S. consumers have access to, and use, faster Internet access services, more than consumers in Europe, in large part because U.S. policies have encouraged investment, compared to European policies that historically have been more focused on wholesale access to encourage competition.

It also would be fair to note that most communities have access to at least two facilities-based providers, a fact that arguably has encouraged investment in upgraded facilities.

Google Fiber’s entry also has had a direct impact, encouraging other Internet service providers to drop their prices to $70 to $80 a month for gigabit access, and to invest in such facilities.

Some would argue Google Fiber’s decision not to allow wholesale access, and thus reap the benefits of capital and operating investments, is one example of how there are incentives to invest. Google Fiber cannot be compelled to sell wholesale access, especially at low rates, to other competitors.

A far greater percentage of U.S. households have access to Internet access at 25 Mbps or faster, the study argues.

On a national basis, 82 percent of U.S. consumers can buy access at 25 Mbps or faster, compared to 54 percent of Europeans.

In rural areas, 48 percent of U.S. rural consumers have access to 25 Mbps or faster services, compared to 12 percent in Europe, according to a study by Christopher Yoo, University of Pennsylvania law school professor.

The study also found that the United States had 23 percent fiber-to-premises coverage, compared to 12 percent in Europe.

The United States also has 86 percent coverage of Long-Term Evolution (4G LTE), compared to 27 percent LTE coverage in Europe.

U.S. download speeds during peak times (weekday evenings) averaged 15 Mbps, below the European average of 19 Mbps, however.

During peak hours, U.S. actual download speeds were 96 percent of what was advertised, compared to Europe, where consumers received only 74 percent of advertised download speeds.

U.S. consumer experience in the areas of latency and packet loss also was better than in Europe.

U.S. broadband “stand-alone” prices were cheaper than European broadband for all speed tiers below 12 Mbps.

U.S. broadband was more expensive for higher speed tiers. The caveat is that most U.S. consumers do not appear to pay “stand-alone” prices for fixed network broadband, typically buying bundles that in essence discount prices.

Consider that 97 percent of AT&T customers bundle their video subscription service with other AT&T services.  Cable providers have 75 percent or more of their subscribers on a bundle of video and broadband, AT&T notes.

Standard coverage is available in 99.5 percent of U.S. households and 99.4 percent  of European households. Standard fixed coverage is available in 95.8 percent of U.S. households and 95.5 percent of European households, the study found.

Mobile broadband coverage at 3G speeds also fall within quite similar ranges, covering

98.5 percent of U.S. households and 96.3 percent of European homes.

Yoo attributes a regulatory “light touch” for higher U.S. investment in broadband and expanded access to high-speed internet in the US compared to Europe.

The University of Pennsylvania Law School study also showed that Europe’s treatment of broadband as a public utility, which some net-neutrality advocates are pushing for in the US, has hindered internet access growth there.

The study notes that, in Europe, where telecom service revenues have fallen by more than 12 per cent since 2008, the financial return for investing in next-generation networks is less promising, since those facilities must be leased to competitors, allowing them to avoid building their own networks.

Those rules also reduce the “scarcity value” of new networks, though.

“The empirical evidence thus confirms that the United States is faring better than Europe in the broadband race and provides a strong endorsement of the regulatory approach taken so far by the US,” said the study, which was written by law professor Christopher Yoo.

The differences in regulatory regimes also contributed to $562 of broadband investment per household in the US versus $244 per household in Europe, where regulators treat broadband as a public utility and promote service-based competition where new players lease existing facilities at wholesale cost.

U.S. policy has emphasized facilities-based competition by firms that can build new facilities, and then reap any rewards, without enabling competitors.

U.S. policy also shows the importance of competition between cable TV and telcos. Although many advocates regard telco fiber to the home as the primary platform for faster networks, the data suggest otherwise.

In Europe, DOCSIS 3 (39 percent coverage as of 2012) and VDSL (25 percent) both contribute more to fast network coverage than does FTTP at 12 percent.

In terms of actual subscriptions, the distribution skews even more heavily towards cable connections (DOCSIS 3), with 57 percent of subscribers, followed by FTTP at 26 percent,

and VDSL at 15 percent.

Even if one were to focus exclusively on FTTP coverage, the data clearly give the edge to the U.S. market. As of the end of 2011, FTTP service was available in 17 percent of U.S.

households and 10 percent of European households. By the end of 2012, FTTP service increased to 23 percent of U.S. households and 12 percent of European households, the study found.

But mobile Internet access now is more important than ever. As of the end of 2011, Long Term Evolution networks covered 68 percent of the U.S. population and eight percent of European households.

By the end of 2012, LTE coverage increased to 86 percent of the U.S. population and 27 percent of European households. Note the difference in data collection, though. European dat is “by household.” U.S. data is by “person.” That understates European coverage figures, to the extent that households have more than a single occupant.

On the other hand, average download speeds at peak periods are higher in Europe, compared to the United States.