Home Broadband Penetration Up 40 Percent In Past Year

Adoption of high-speed Internet at home grew twice as fast in the year prior to March 2006 than in the same time frame from 2004 to 2005, according to a report of the Pew Internet & American Life Project, titled "Home Broadband Adoption 2006."

Middle-income Americans accounted for much of the increase, along with African Americans and new Internet users coming online with broadband at home. At the end of March 2006, 42 percent of Americans had high-speed at home, up from 30 percent in March 2005, or a 40 percent increase.

Among Americans in the middle-income range - those whose household incomes are between $40,000 and $50,000 per year - home high-speed penetration grew by 68 percent from 2005 to 2006.

Other sources of broadband growth were:

• African Americans, whose home broadband penetration grew by 121 percent, from 14 percent of all adults to 31 percent with high-speed at home, 
• New Internet users; overall online penetration grew by seven percentage points, from 66 percent to 73 percent, and nearly half of these Americans new to the Internet got broadband.

The Pew Internet survey also documents an important marketplace shift: Telephone companies offering less-expensive digital subscriber line (DSL) connections have overcome the once-sizeable lead that cable companies had in the broadband market. DSL accounted for 50 percent the home broadband market in our latest data while cable modem providers had 41 percent. This is an exact reversal of market shares from a year earlier, and DSL has a significant price advantage over cable modem service. Subscribers to DSL service at home report a $32 monthly bill, compared to $41 for cable modem users. These aggressive pricing strategies paid off for DSL providers; DSL won the bulk of the new business from high-growth population segments.

"The early adoption phase of broadband-to-the-home is behind us," said John B. Horrigan, Associate Director for Research and principal author of the report. "As broadband moves beyond the elite, so does an online activity once largely the province of early adopters - posting content to the Internet."

Some 48 million Internet users have put some sort of content for the Internet - whether that's maintaining a webpage or sharing creative work online. Three-quarters of those who post content to the Internet have high-speed Internet connections at home. Young people have the most likely sources of user-generated content, but this activity is evenly distributed across income groups, by gender, and levels of education.

"The mainstreaming of high-speed, in combination with user-generated content being a widespread phenomenon, suggests that individuals will continue to shape the Internet," said Horrigan said. "This means that an Internet that permits open access to lawful content is of great value to the tens of millions of Americans who post their creative work online."

In August 2005, the Federal Communications Commission adopted a policy statement entitled New Principles Preserve the Open and Interconnected Nature of Public Internet which included the principle that "consumers are entitled to access the lawful Internet content of their choice." The current debate in Congress about network neutrality pertains to whether, or in what form, additional regulatory or legislative action is necessary to maintain this policy principle as high-speed networks evolve.

The new Pew Internet report also contains data on awareness and home adoption of Voice over Internet Protocol (VoIP) telephone services. As of the end of 2005, 61 million Americans say they have heard of the service - up by 86 percent since February 2004 - and approximately 3 percent of Internet users have VoIP service at home. Of those with VoIP at home, about half have given up their traditional landline phone.

The Pew Internet Project's report on broadband adoption is based on the Project's March 2006 survey of 4,001 Americans, 1,562 of whom were home broadband users. Comparisons to March 2005 are based on the Project's combined January-March 2005 surveys of 4,402 adults, of whom1,265 were home broadband users. Data on user-generated content, monthly cost of service, and VoIP are drawn from the Project's December 2005 survey of 3,011 Americans, of whom 1,014 were home high-speed users.

The Pew Internet Project is a non-profit, non-partisan initiative of the Pew Research Center that produces reports exploring the impact of the Internet on children, families, communities, the work place, schools, health care, and civic/political life. Support for the non-profit Pew Internet Project is provided by The Pew Charitable Trusts.