Bridging the Divide::Kudos to Telcos for Bringing DSL to Masses

    by Mark Glaser
    May 31, 2006

    i-436647a3f1370ba7c158dc16543c5cc7-Pew Internet media usage.JPG
    A few years back, I angrily canceled my DSL and local telephone service with SBC after their horrible customer service and slamming technique drove me away. I likely muttered something like this under my breath: “Hell will freeze over before I’ll say something positive about telephone companies.” Consider it frozen.

    After poring over the numbers from the latest survey (PDF file) from Pew Internet & American Life, I have to grudgingly admit the telcos have helped bridge the digital divide by cutting prices on DSL service. That means more poor and middle-income people and minorities now have broadband Internet access at home, and that more of these people are creating and sharing content online. Net result: The high-speed Internet now reaches more people than just the elite, and their voices are being heard online.

    Here are some of the key figures from the recent report, Home Broadband Adoption 2006:


    > As of March 2006, 84 million or 42% of American adults had broadband access at home, up from 60 million or 30% of Americans in March 2005. That growth rate of 40% is double the adoption rate the year before.

    > Broadband adoption was up a whopping 68% in households earning $40,000 to $50,000 per year, and even up 40% in households making less than $30,000 per year.

    > Broadband access is up 63% among people aged 65 or higher, it’s up 121% among blacks, and up 46% among hispanics. And it’s up 70% among people with less than a high school education.


    > While the average high-speed cable bill has remained steady at $41 per month, the average DSL bill has gone from $38 in 2004 to $32 in 2006. DSL now accounts for half the broadband households, with cable lagging at 41%.

    John Horrigan, associate director for research at Pew Internet, was the author of the report. He told me that DSL taking the lead over cable was a big turn-around.

    “The fact that DSL has overtaken cable as a source for broadband was one big surprise,” Horrigan said. “We’ve seen the trend over the past couple years of DSL encroaching on cable’s market share, but to see DSL surpassing it was a bit of a surprise. Once you get into the data, you realize it’s not as much of a surprise. You see that DSL providers have offered price cuts over the past 18 months or so.”

    Plus, dial-up access to the Internet was down in price, causing overall Internet penetration to rise from 66% to 73%. So what does all this price-cutting and diversity online lead to? Pew found that people with broadband tend to spend more time online, specifically doing user-generated content such as writing blogs, running a web page or posting photos or video. For instance, 8% of all Internet users maintain a blog or journal, but 11% of broadband users blog.

    Among the people who post content online — 43 million Americans — are 32% of white Net users, 39% of blacks online, and 42% of hispanics online. Why the higher numbers for blacks and hispanics? Horrigan told me that was because those groups tended to be younger than whites demographically, and younger folks tend to be the ones putting content online.

    So while I do question the way telecoms have treated their customers (including me), and I wonder about their stance on Net neutrality, I have to give credit where credit is due. The telecom companies — likely motivated by gaining market share and not good will — cut prices on DSL, leading more people to join the broadband revolution, thereby bringing more diversity to the people who are blogging, podcasting and doing all the things that makes new media tick. And that’s a very good thing.

    What do you think? Have DSL price cuts helped to bridge the digital divide, or do we still have a long way to go? What other ways can we help bridge the divide here and in other countries? Share your thoughts in the comments below.

    • Lynne Holt

      One group of consumers who have been left behind by the telecoms are those who live outside a major metropolitan area. While we are held hostage by companies for land line service (no alternative services are available in most ares), they are unsympathetic and not at all willing to take some of the profit they are making to extend their service capacity to lower population areas. In my last conversation with Verizon on this issue I was left with the clear impression that customers located in the country rather than the suburbs or the city were very low on their priority list. I have now invested in a satellite for my broadband internet service and will be cancelling service for a second phone line I have had for dial-up service. I’ll also be seeking a wireless alternative to my landline service. (Again, major telecom wireless services are not available to me either.) Both of these changes will more than pay for the sattelite service and the major telecoms I have been dealing with will be out about $100 per month. A small drop in the bucket, but, hell is not frozen over yet as far as I and other consumers like me are concerned.

    • Lynne,
      That’s a really good point, and one I didn’t discuss in my post. Pew found that in rural America, broadband penetration increased 39% in the past year — from 18% of people in 2005 having high-speed Internet to 25% of people in 2006. But that 25% figure lags well behind the urban penetration of broadband (44%) and suburban (46%). And that could well have to do with not having access to any meaningful high-speed service.

      Pew’s John Horrigan said this about rural broadband: “We do see rural access improving, but rural Americans continue to say they have less access than those in urban and suburban settings. It’s probably not as bad as it was two years ago, but it remains a problem in rural areas.”

    • Mark: Love your column, and read it weekly. We need to define broadband because the definition impacts on the numbers. Telecoms companies in my country, Australia, proudly tell us that 3 million households have broadband in this country (that’s almost 30 per cent of households). But 2 million of those are on ADSL, at speeds of about 256, which in my opinion are not broadband. When I lived in the US in 2003-2004 I had 3 mb/sec at home via a local cable provider. Back home in Oz, rural folk like me are stuck with dial-up. How can the Internet revolution advance with such slow speeds?

    • Something else that was big in the Pew report was that fixed wireless now accounts for 8% all broadband connections. There are a lot of independent wireless ISPs out there providing service to rural areas and much-needed competition in urban and suburban areas. Wireless broadband is the dominant form of broadband in several places. I live in Scottsbluff, Nebraska, and there are towns of 1000 people that have five or six choices for broadband – one dsl, one cable and three or four wireless broadband providers. There is a quiet revolution going on in wireless broadband.

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