Broadband Growth in Homes Is Slowing, Study Finds

The latest survey from the Pew Research Center's Internet and American Life Project shows that broadband growth in homes is slowing. About two-thirds of Americans have broadband, the Pew study says, but saturation and high prices are slowing adoption. But access to 3G Internet on mobile devices has exploded with business offering free Wi-Fi.
Two-thirds of American adults now have broadband Internet access at home, but fewer people are signing up for it, according to the latest study by the Pew Research Center's Internet and American Life Project.

The survey of 2,252 adults 18 and older, conducted for the center by Princeton Survey Research Associates International between April 29 and May 30, found 66 percent using broadband, almost the same as 63 percent in 2009.

Slowest Growth Since 2004

That five percent increase is the slowest growth measured by the center since 2004.

The 63 percent in 2009 was a 15 percent jump from the previous year. In 2005, the number of broadband homes measured by the center grew to 53 percent from 50 percent the previous year, a statistically insignificant number, after a 20 percent increase in 2004 from 2003.

"Broadband is slowing in the U.S. due to saturation and a relatively high price point, typically $40 per month," said Gerry Purdy of MobilTrax. "It's hard for some people on low budgets to buy broadband. They realize they have to have a phone but don't have to have broadband at home, especially with Starbucks and McDonald's now offering free wireless Relevant Products/Services broadband access all day long."

At the same time, use of the mobile Relevant Products/Services Internet through 3G Relevant Products/Services connections on smartphones and other devices has exploded.

Is 3G Killing Broadband?

"There is growth in 3G wireless due to lots of different reasons, including growth in machine-to-machine, use of wireless access cards for notebooks, growth of MiFi, growth of migration to smartphones," Purdy said.

J.D. Power and Associates wireless analyst Kirk Parsons says 3G could be one of many factors in the broadband slowdown.

"3G may have a minor impact, but not major, as users tend to employ broadband services via PC for different reasons than when they access Internet services via devices," Parsons said. "Device broadband access tends to be more search Relevant Products/Services/communication-related, while PC broadband usage tends to favor high-volume consumption like entertainment, music downloads, purchasing."

The cost of largely optional broadband access for nonbusiness users during a recession may be another factor, Parsons said, while saturation may also be slowing the market.

"Growth rates typically slow down when you reach high market-penetration rates based on availability of product," he added. "Broadband access in major cities and suburbs is 80 percent."

Another factor is the lack of competition, with fewer areas where rival companies, such as AT&T and Verizon Wireless, offer competing deals. "Lower price points tend to spur growth rates, but both company offerings and build-outs have slowed down," Parsons said.

Not The Government's Business

The Federal Communications Commission has launched an initiative to encourage more high-speed Internet access, particularly in rural areas. But 53 percent of those surveyed told the Pew Center this should not be a government priority, while only 41 percent said it should be.

The survey, which has a margin of error of plus or minus 2.4 percent, also found that African-Americans are now faster adopters of broadband than whites. Defying the overall slowing trend, the number of African-American users grew 22 percent in the year between the Pew surveys, from 46 to 56 percent, while the number of white broadband users changed slightly from 65 percent to 67 percent.