Study: U.S. Broadband Adoption Leaps Despite Recession, Rising Prices

The recession may indeed be forcing you to cut back on some cellphone and cable television services, but apparently it will only get your high-speed Internet access when it pries your computer mouse from your cold, dead hands.

The latest Pew Internet and American Life Project study, released Wednesday, shows broadband adoption growing in the face of a sour economy. The study put the adoption rate at 63 percent, up from 55 percent last year — with senior citizens and low-income Americans experiencing the largest growth rates year-over-year.

Pew interviewed 2,253 people — 651 via cellphones — and 22 percent of those said they had either cut back or economized on cell phone and cable TV service over the past year, as the recession has deepened and job losses have increased. However, the broadband adoption rate rose, as did monthly average prices for home broadband service — US$39 in April 2009 compared to $34.50 in May 2008.

“A majority of home broadband users see a home high-speed connection as ‘very important’ to at least one dimension of their lives and community, such as communicating with healthcare providers and government officials, or gathering and sharing information about the community,” wrote John B. Horrigan, Pew associate director. “A growing share of broadband subscribers pay for premium service that gives them faster speeds. They are also paying more for the extra speed than they did a year ago.”

A Broadcast/Broadband Blend?

Pew’s findings came as little surprise to Ben Bajarin, who heads the consumer technologies practice at the consultancy/research firm Creative Strategies. In fact, they mirror similar studies done by others showing a content shift from broadcast to broadband, he told TechNewsWorld that

“It’s logical, following the cocooning mentality that happens during times like these,” Bajarin said. “More people are watching DVDs, and they’re cutting costs, but they can still consume a great deal of entertainment and can communicate through their high-speed connection. It’s just a shifting of habits, where they (consumers) are looking to bundle and do more with a particular medium. They know how much content exists online, and they use that (broadband connection) for more rich media and entertainment.”

Thanks to the rise of one-word entertainment options delivered digitally — Hulu, Roku, Netflix, YouTube — “it’s quite possible to get the vast majority of television programming online for free. If you counter that with what the average bill for Comcast is, about $80, that’s a tough sell in this economy. Even if you need more broadband, you just pay an extra $8 to $10 a month.”

Sensing the seismic shift in consumer viewing habits, cable companies have also starting adding more on-demand choices from broadcast and cable networks.

Implications for Government Initiatives

The Pew study saw two groups that have traditionally resisted high-speed access suddenly show signs of jumping on the broadband bandwagon: senior citizens, with a year-over-year increase of 18 to 30 percent adoption, and low-income households with average annual incomes of less than $30,000, rising to 34 percent adoption. Cheaper computers and more Web-focused devices like netbooks are two factors for this, according to Bajarin.

The study’s findings may also play into the Obama administration’s desire to expand broadband access to more of the country, especially rural areas that have few or no high-speed providers. The study showed that those areas with more competition paid less in monthly average bills, giving credence to arguments from open-access advocates like Free Press.

“We need to continue to drive the accessiblity and the costs down of just general broadband — anything between 1.5 and 2.5 MB in speed,” Bajarin said. “There’s more accessibility from a simplistic device standpoint. Netbooks are just designed to get online. That will help with what those pushing more broadband initiatives want to do. There has to be a compelling reason to get online.”

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