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Summary:

Like many urban myths, we have come to believe that US is a broadband laggard. Often pundits hold up the shining examples of South Korea and Japan as countries that are miles ahead of the US. Media is quick to point out that even puny Singapore […]

Like many urban myths, we have come to believe that US is a broadband laggard. Often pundits hold up the shining examples of South Korea and Japan as countries that are miles ahead of the US. Media is quick to point out that even puny Singapore and Belgium are ahead of US in terms of broadband penetration. I know, I have often said so, and have been wrong.

Broadband penetration is a wrong metric to look at when it comes to evaluation US and broadband. I think the right yardstick to evaluate US is the actual number of broadband users – folks who pay for their broadband every month. US, at the end of 2004 had nearly 34 million broadband connections – that’s more than any other country on the planet.

Surely, in broadband penetration – broadband lines per 100 users -US is falling behind in the race, but then it’s a much large country than say South Korea or Japan, or Singapore – with nearly 250 million residents. It’s easy to wire a country the size of say Florida, but it’s darn hard to wire-up a continent. (US ranks at #11 in broadband penetration.)

Bruce Leichtman, principal at Leichtman Research Group spends most of his time pouring over the broadband data, and he called to remind me that broadband adoption in US is second only to DVD when it comes to new technology adoption. “Comparing us to rest of the world is just crazy,” he says, and reminds us “that there are 25% American households who don’t have computers.” If you took at the people who have computers, in his estimates the US penetration is shade over 40%.

The thing about urban myths is that they are just that a myth – sure we may not have as much bandwidth as South Korea, online gaming parlors are not part of our lives, but never say US is a broadband laggard.

  1. Yep, I agree the metric is skewed…just like the metric used, total box office collections, for a movie when comparing the movie with another movie of another time. The number that gives a better picture would be the number of tickets sold. To make comparison even more relevant, percentage of total population that watched the movie could be used.

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  2. You’re getting soft in your old age. How can you give the US credit on an apples-to-apples basis? How many of those 34 million “broadband” connections are less than half a megabit, have the latency of satellite, are asymetrical, and carry other restrictions that shouldn’t really allow them to be called broadband? Finally, given my interaction with SF city government efforts to get disclosure from local broadband providers (Comcast and SBC primarily), the likelihood of the published numbers being close to accurate is very, very low.

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  3. What does the data look like when normalized for local population density?

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  4. actually those are the total number of users who use cable, dsl or in case of about 400,000 users fiber to the home or fiber to the building. not getting soft but this is the data that comes from FCC, SEC filings – two places, mind you no one wants to lie.

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  5. faisal can you explain your question a little more. i am sure i have the data, but just want to make sure i don’t reply incorrectly

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  6. It was my understanding that the FCC data tend to overrepresent the actual availability of “broadband” in an area, since they consider even a single broadband connection for an area code to mean that whole area code has broadband access.

    Also, Scott makes a critical point: the FCC definition of broadband is 200Kbps symmetrical. That’s about as laughable a definition of broadband as you can get.

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  7. canada may be an interesting comparison, if you’re looking for BB penetration between two countries of comparable geographic size. the fact is, the slow growth of BB in the US is preventing us from enjoying (and profiting from ) new on-line business, entertainment and even healthcare applications that are available elsewhere.

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  8. Om-

    You are right. The fact that the United States is the single biggest broadband market, should speak for itself. I too believe the population metric is a poor method of determining penetration. Household penetration is a better indicator of true penetration (and paid subscriptions), as most households only have one broadband connection, but possibly many users.
    At the end of 2004, the United States ranked 16th in terms of household penetration. Canada ranked 5th.

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  9. Hey Scott Rafer: my fiber connection is asymetrical (2mb up; 5mb down). Does that mean it’s not broadband?

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  10. This depends on what you’re trying to measure. If you are attempting to determine if the broadband market is large enough for your business model then a total number is fine. If however you are attempting to compare the U.S’ adoption rate to other countries then you must look at a per capita install base.

    Looking at pure numbers, if a country such as Canada reach 100% broadband adoption they still wouldn’t lead the U.S. as Canada’s total population is only around 30 million.

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