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Summary:

Arkansas, North Dakota and South Carolina round out the top three states with the most competitive broadband markets according to a report released today by ID Insights and broadband consultant Craig Settles. It appears the more people online in your state, the less competition there is.

Arkansas, North Dakota and South Carolina are the three states with the most competitive broadband markets, according to a report released today by ID Insights and broadband consultant Craig Settles, president of Successful.com. For those questioning what makes these states so competitive, it’s the fact that no single provider — or even a duopoly of providers — serves a huge percentage of the state’s broadband subscribers. For example, in Arkansas the top two providers offer service to just 49 percent of broadband customers, whereas the top two ISPs in the least competitive market, Rhode Island, cover 95 percent of subscribers.

What’s more interesting is that the survey draws out a correlation (not causation, guys) between home values and income, showing that the wealthier you are and the higher your home value, the less likely you are to live in a place with competitive access to broadband. Plus, the more people online in your state, the less competition there is.

This may at a certain level be counter-intuitive. However, when you look at this one layer deeper, it begins to make sense. In more prosperous states where there are many users, and more wealth, this tended to attract the largest providers. As infrastructure was enabled and larger providers began to dominate markets, it became increasingly difficult for new entrants to establish themselves.

Competition, or the lack of it, is one of the key reasons the U.S. lags behind in broadband speeds, and can also be tied to anti-competitive tactics such as tiered broadband. The Federal Communications Commission hopes to address the lack of competition with mobile broadband and better data, which this report helps provide, but I’m not holding out for a any miracles of access technology coming to my home unless Google chooses Austin for its experimental fiber network. Below is a list of the top 20 states, and the full report can be found here.

  1. Arkansas
  2. North Dakota
  3. South Carolina
  4. Nebraska
  5. California
  6. Alabama
  7. Missouri
  8. Indiana
  9. Texas
  10. Kentucky
  11. West Virginia
  12. Wisconsin
  13. Minnesota
  14. Florida
  15. Montana
  16. Connecticut
  17. North Carolina
  18. South Dakota
  19. Oregon
  20. Michigan

Image courtesy of Flickr user OakleyOriginals

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  1. so what this should tell us is that the FCC should focus on how to increase competition in the higher density areas. our big cities really need an option in addition to cable and DSL.

    i wonder if it would also make sense to give favorable conditions to companies that agree to cover the entire nation? why not have multiple cable companies competing against each other? at least in the big cities. it may make sense to give time warner and comcast some stimulus funds on the condition they enter each other markets as head on competitors. the same with AT&T and verizon.

  2. Competition would be welcome here in metro Atlanta, but I doubt it will happen since someone has paid someone in government to carve up areas for various cable companies. We have no choice; it’s decided by where one lives, and that just facilitates the price increases on a continual basis – GREED.

  3. Bailey White Friday, April 23, 2010

    I worked in one of the wealthiest counties in the country on Long Island a few years ago and found that the market there was very competitive in my opinion with FIOS and Optimum Online. While most areas of the country were getting at best 3 to 10 mbps to residential services, residents on Long Island could get 50 mbps from two providers. In fact, the competition between these two providers was so fierce that Cablevision used the market as the first place to roll out their free Wi-Fi services to subscribers.

    The definition of competition sounds flawed in this report. Competition to me in terms of broadband means that at least two providers are working to offer world class or at least nation-leading services. More sophisticated and/or complex competition is better, but I would not want to forego throughput and price/performance for additional operators.

    In my experience wealthy suburban areas typically get the best services in the country.

  4. Certainly seems to make sense to me – most people who already have broadband are not going to change providers, preferring to stay with the known evil. So, in areas with high online usage, a new company will face a very steep uphill climb to gain subscribers.

  5. Wow, Arkansas tops the list? I live just outside of Fort Smith and do not have access to broadband.

  6. Heather Tishman Friday, April 23, 2010

    This methodology, is is just dumb. Broadband competition is a local, household-level issue, not a statewide issue. So what if in AK the top two companies have just 49% of lines, if at any given location there is just one provider! That is, you could have a state where every house had access to the same three providers, and the competitive reality their would be much better than a state that had a bunch of small providers, but who were each a monopoly in their local markets.

    Dumb stuff really.

  7. Competition is problem? Do any of these studies EVER compare braodband penetration by population density? Does anyone who writes articles like this ever travel outside urban centers?

    The problem with broadband in America is that LOTS of our citizens live in places where you need miles of cable to cover a few homes. This makes broadband un-profitable for the companies to provide. It also dilutes company’s abilities to ramp up speed: the infra-structure costs are inordinately high.

  8. arkansasblogger Friday, April 23, 2010

    Well, this study is ridiculous. Arkansas is about dead-last in rural access to broadband. There is zero competition for broadband in huge areas of the state. That is the definition of competitive?

    Mostly, it’s because of AT&T’s rotten service here. They are more interested in laying underwater cables to China than modernizing their wireline infrastructure in Arkansas. The millions they claim to spend here are wildly inflated.

    We have a state-chartered corporation called “Connect Arkansas” that was created to improve broadband access, but it has accomplished little or nothing.

  9. READ MY COMMENTS IN CONJUCTION WITH THIS ARTICLE:
    http://news.bbc.co.uk/go/rss/-/2/hi/default.stm

    THAT REFERENCES AUSTIN, TEXAS AS ONE OF THE TOP TEN FASTEST CITIES FOR BROADBAND INTERNET IN THE U.S.(bfd)

    I reside 10 miles West of the center of Austin ( Congress and 9th St., AT&T’s tandem switch) and cannot get DSL (AT&T) nor cable (TW) unless I pay TW $4-5K for running hardline copper coax to my house from the road 400 yards distant.

    Yet, at my 40acre Arkansas cabin in the Ozarks I have had DSL for 5 years. Half this Arkansas county (Newton) is National Forest, so no potential customers there. The county seat, Jasper, AR, population 500 is only one of two incorporated towns in the entire county. The other incorporated town has 86 residents. This is about as rural as you can get outside or West Texas or Alaska, yet I have DSL Internet (Ritter.net)in a county where the average annual income is $11,000 !!! and half the county is National forest!!!

    Yet my hometown, Big Hip Austin, is more rural, than RURAL Arkansas!! You disagree? If you get 10 miles from the City Core, where I live, you can’t get affordable residential BB. I must buy a T-1 1,544 Mbps,for hundreds a month to get “BB Internet!!

    Now Stacy H, being a Journalist, may see Austin from the City Center; I see Austin from 10 miles out all the way 700 miles to El Paso.

    I spell it: POLITICAL CORRUPTION !! Both Republi-con and Demo-rat.

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