Broadband growth in the United States in early 2006 has resumed its fast upward trajectory. As of March 2006, 42% adult Americans – or 84 million people – have high-speed at home, up from 30% who had broadband at home in March 2005. This represents a 40% increase in the number of people with high-speed connections at home over a year’s time. To put this growth rate in context, in a comparable timeframe of a year earlier, broadband adoption at home grew by 20% from March 2004 to March 2005. The chart below shows growth rates in broadband adoption in recent years.
The 2005-2006 growth rate means that home broadband adoption has gone from single-percentage point penetration rates to over 40% of adult Americans in just six years’ time.
With 25 million more Americans using broadband at home in early 2006 than a year earlier – which was the entire population of home broadband users at the end of 2002 – it is worth asking about the sources of this growth. To some extent, the rise in broadband penetration is linked to growth in overall internet penetration since the end of 2004, with more new online users beginning their internet experiences with high speed connections than has traditionally been the case. Our surveys show that 60% of adult Americans were internet users during November 2004, a figure that stood at 66% in January 2005; as of March 2006, 73% of adults said they were internet users. Whereas 35% of new internet users (i.e., those online for a year or less) connected at home by high-speed in the winter of 2004, that figure increased to 45% for new internet users by the winter of 2005.
25 million more Americans were using broadband at home in March 2006 as compared to March 2005. That equals the total number of home high-speed users in the United States at the end of 2002.
A seven percentage point increase in internet penetration from 2005 to March 2006, with these new users signing up for broadband at the rate noted above, accounts for about 25% of home broadband growth. The remaining increase came from current users switching from dial-up to broadband. Although we do not have a panel of respondents to allow us to pinpoint exactly the source of the growth, the table below comparing penetration across demographic groups at the two points in time paints a picture of strong growth across a wide range of population segments.
Relatively low adopters from 2005 had the largest growth rates into 2006. African Americans, for example, report a whopping 121% growth rate, which is both large and statistically significant. Four other groups exhibited rapid growth rates:
- Those who did not finish high school,
- Senior citizens,
- Those whose annual household incomes are in the $30,000 to $50,000 range,
- High school graduates.
- The numbers for growth in lower income categories are important because it shows fast growth rates among a large segment of the population – approximately 40% of Americans tell us their annual household incomes are under the $50,000 threshold. In collecting data on income, respondents are asked to place themselves in one of eight income categories that are read to them. Many respondents – about 20% – opt not to provide this information. Of those who do, the median (or middle) category chosen is the fifth one – a household income between $40,000 and $50,000 per year.
The middle income category is the one which experienced the most growth in broadband adoption from 2005 to 2006. The chart below displays the growth rates from 2005 to 2006 across the disaggregated income categories.
Income is, of course, a factor in broadband adoption. As the table on page three shows, 15% of those who live in households with income under $30,000 annually have broadband compared with 57% of those in households whose incomes exceed $75,000 annually. But the data do show that broadband is no longer just the province of upper-income Americans.
As noted, many respondents do not tell us what their income is, but they do share whether they have high-speed connections at home. Among the roughly 20% of respondents who refuse to answer the income question, 22% had broadband connections at home in 2005; for respondents from our 2006 survey who did not provide information on income 31% had broadband at home. This is a growth rate of 41% from 2005 to 2006.