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ECommerceTimes.com
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Home Broadband Use Falls as Consumers Go Mobile

By David Jones
Jan 4, 2016 7:22 AM PT

A recent Pew Research Center study found that adoption of traditional high-speed Internet in the U.S. has fallen to 67 percent, the lowest level since 2012.

Home Broadband Use Falls as Consumers Go Mobile

More consumers were using mobile phones, the study found. Thirteen percent of respondents said they were smartphone-only customers, compared with 8 percent in 2013.

The reduction in home broadband use accelerated among certain communities, including the poor, African Americans and rural communities, Pew said.

Fifteen percent of respondents said they have cut the cord on paid cable and satellite TV, largely because of the increased amount of streaming content available through other channels.

Advanced Internet access has changed little since 2013, with about 80 percent of adults having either a smartphone or a home broadband connection in 2015, compared with 78 percent two years ago.

However, many more Americans considered having home broadband important, with 69 percent saying not having this service is a major disadvantage in finding a job or accessing health information, Pew said.

A third of those without broadband cited cost as the primary reason, while 10 percent said the cost of owning a computer was their main reason for not using the service.

Expanding Access to Poor, Rural Towns

"Broadband is more and more critical to people's lives," said Chris Lewis, vice president of government affairs at Public Knowledge. "More and more people see it as essential."

In 2010, when the federal government came out with a national broadband plan to make sure small communities and low-income areas would have high-speed Internet, many people who lacked the service didn't think it was relevant to their lives, he told the E-Commerce Times.

Now the biggest concern is cost, because people realize they can't complete important tasks without such access, Lewis said.

Customers in rural areas continue to have problems getting affordable broadband connections, as many areas lack competition, and industry lobbyists have blocked smaller communities from building out their own cost-effective systems, said Chris Mitchell, director of community broadband networks at the Institute for Local Self-Reliance.

"I think certainly all the big companies are limiting choice," he told the E-Commerce Times.

Smaller communities are finding some success in creating their own networks to counter this, Mitchell said.

Earlier this year, RS Fiber Cooperative broke ground on a high-speed connection in Sibley County, Minnesota. The company is working with Hiawatha Broadband Communications to build out a network that will offer service to about 1,600 homes and businesses.

"The people we talk to are blown away by how good it is to have this high-speed service," Mitchell said. "Nobody wants to move into a house where they can't stream high-quality video that's available to them."

Young Adults Move to Mobile

Many young people are deciding to drop home broadband and go with wireless because high-speed data is more affordable on wireless phones than it was in the past, and home broadband is becoming more expensive for those who exceed the monthly bandwidth cap, analyst Jeff Kagan said.

"Typically when you surf a Web page, you will see it loaded with ads," he told the E-Commerce Times. "Many of those ads use enormous amounts of data, like the video ads, which users didn't want in the first place."

Customers should not be penalized for advertising they never asked for, Kagan said. If the trend persists, young people will continue to move away from home broadband to only using smartphones for high-speed Internet.

Time Warner Cable continues to see strong growth in new subscribers.

"In terms of overall broadband trends within TWC, we've seen consistent and substantial growth in our Internet product -- in fact having some of the best growth quarters this year in recent company history," spokesperson Judy Barbao said.

During the third quarter, the company reported 232,000 net additions of residential high-speed data, the best third quarter since 2006, it said. It had a net increase of 172,000 during the second quarter, the best second quarter since 2008, and a net increase of 315,000 during the first quarter, the best since 2007.

TWC is aware of the increasing trend toward mobile, and it offers customers access to 400,000 hotspots around the country, Barbao told the E-Commerce Times. [*Correction - Jan. 4, 2016]

The company also offers a low-cost Internet product for US$14.99 a month that provides 2 Mbps upstream and 1 Mbps downstream and is available without income restrictions.

*ECT News Network editor's note - Jan. 4, 2016: Our original published version of this story incorrectly stated that TWC offered customers access to 400 hotspots around the country. It offers access to 400,000.


David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.


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