Studies Disagree On U.S. Broadband Growth

A study just released by the Leichtman Research Group, indicates that the "twenty largest cable and telephone providers in the US" now total approximately 65.1 million, high-speed Internet subscribers. Those 20 providers make up roughly 94 percent of the U.S. broadband market.

Assuming that Leichtman's results are correct (and assuming that Neilson's latest numbers are as well, which show 164 million U.S. users went online in May 2007), this would mean that about only 42 percent of U.S. Internet users connect via a broadband connection. This is significantly lower than the 55 percent of adult Americans that the July 2008, Pew Internet & American Life Project reports have a home broadband connection (with approximately 215 million adult Americans, that would mean that over 118 million of them have home broadband connections). The large discrepancy in numbers can be attributed to a number of possible factors, such as Leichtman's total number of U.S. users online could be vastly different from what Neilson reports. The largest contributor to the discrepancy in findings, however, can most likely be chalked up to differences in the methodologies the two organizations applied to their respective studies. (For instance, they might have different definitions of what they consider a "broadband" connection.)

The differences between the two studies don't stop there, however: Pew reports that home broadband adoption is up 17 percent from 2007 to 2008, versus 12 percent in the 2006 to 2007 timeframe. Meanwhile, even though the second quarter of 2008 saw 886,940 new broadband subscribers come online according to the Leichtman study, Leichtman reports that this actually represents only 51 percent as many new broadband users as there were during this same timeframe one year ago.

"Net broadband additions in the quarter were the fewest of any quarter in the seven years LRG has been tracking the industry," said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc"

So is Broadband Internet use growing according to Pew, or slowing as according to Leichtman? The truth might lie somewhere in-between the two. The Pew study makes the observations that "broadband adoption for low-income Americans has been flat," and that "35% of dial-up users say that the price of broadband service would have to fall" before they would consider switching to broadband. We're taking our assumption way out onto a limb here, but considering the state of the economy these days (job layoffs, the high cost of gas and groceries, the difficulty in securing mortgages), it's possible that fewer people are willing to fork over the extra expense of paying for a broadband Internet connection.

Perhaps the biggest takeaway from these studies is that you must take the results from such reports with more than just a few grains of salt. That's easy enough for most of us to do, as we simply find these kinds of results interesting, with little practical application to our everyday lives. But what about the companies that need accurate data in order to make projections and critical business decisions? Let's hope they choose wisely and make the right decisions.
Tags:  Broadband, Growth, ban, gree, AG, IE, U.S., and, band