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SpectralShifts Blog 
Thursday, December 29 2011

67 million Americans live in rural areas. The FCC says the benchmark broadband speed is at least 4 Mbps downstream and 1 Mbps upstream. Based on that definition 65% of Americans actually have broadband, but only 50% who live in rural markets do; or 35 million. The 50% is due largely because 19 million Americans (28%) who live in rural markets do not even have access to these speeds. Another way of looking at the numbers shows that 97% of non-rural Americans have access to these speeds versus 72% living in rural areas.  Rural Americans are at a significant disadvantage to other Americans when it comes to working from home, e-commerce or distance education.  Clearly 70% are buying if they have access to it.

Furthermore we would argue the FCC standard is no longer acceptable when it comes to basic or high-definition multimedia, video and file downloads.  These applications require 10+ Mbps downstream and 3+ Mbps upstream to make applications user friendly.  Without those speeds you get what we call the "world-wide-wait" in rural markets for most of today's high-bandwidth applications.  In the accompanying 2 figures we see a clear gap between the blue lines (urban) and green lines (rural) for both download and upload speeds.  The result is that only 7% of rural Americans use broadband service with 6+/1.5+ Mbps versus 22% nationwide today.

The problem in rural markets is lack of alternative and affordable service providers. In fact the NTIA estimates that 4% of Americans have no broadband provider to begin with, 12% only 1 service provider and 44% just 2 providers. Almost all rural subscribers fall into 1 of these 3 categories. Rural utilities, municipalities, businesses and consumers would benefit dramatically from alternative access providers as economic growth is directly tied to broadband penetration.

The accompanying chart shows how vital broadband is to regional economic growth.  If alternative access drives rural broadband adoption to levels similar to urban markets, then local economies will grow an additional 3% annually.  That's because new wireless technology and applications such as home energy management, video on demand, video conferencing and distance learning provide the economic justification for alternative, lower-cost, higher bandwidth solutions.

Related Reading

FCC Broadband Map

US 3G Wireless Coverage Map

The UK is Far Ahead of the US; Their deficient is our average

Rural Telcos Against FCC USF Reform

GA Tries to Reduce Subsidies, Again

 

Posted by: Michael Elling AT 08:09 am   |  Permalink   |  0 Comments  |  Email
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