Broadband Growth Fastest In Rural Areas

    August 20, 2009

Over the past two years broadband has experienced the most significant growth in rural areas, according to a new study from comScore.

Rural markets (defined as having a population less than 10,000) in the U.S. saw a 16-percentage point increase in broadband penetration from Q2 2007 to Q2 2009, making it the fastest growing geographic market segment in the nation. In comparison micropolitan areas (population between 10,000-50,000) grew 14 percentage points during the same time, while metropolitan areas (population 50,000+) grew 11 percentage points.

Broadband Penetration Based on Geographic Area

"Across the country we have witnessed growth in broadband adoption driven by greater price competition and increased consumer demand, as bandwidth-intense activities like video streaming and peer-to-peer sharing continue to grow," said Brian Jurutka, vice president of telecommunications at comScore.

"With low-speed DSL priced at about the same level as dial-up in many areas, there is little incentive for households to remain on dial-up."

While rural markets have experienced significant growth, their broadband penetration of 75 percent remains below the national average of 89 percent. Lower broadband penetration in rural areas is compounded by lower Internet usage overall. A 2007 analysis by the U.S. Department of Agriculture Economic Research Service, found 63 percent of all rural households had at least one member access the Internet, compared to 73 percent of urban households.

The fastest growing local markets in broadband adoption were all smaller, ranking at or below #50 in terms of size. Ft. Myers-Naples was the fastest growing market with a 12-percentage point increase in broadband penetration from Q1 2008 to Q1 2009. Flint-Saginaw-Bay City, MI., Louisville, KY. And Evansville, IN. all saw 11 percentage point increases during the same period.

Fastest Growing Local Markets Based on Broadband Penetration Growth

In comparison, the largest markets are closer to reaching saturation and experienced single digit growth.  New York, the largest local market, reached 96 percent broadband penetration in Q1 2009, making it the most wired local market in the U.S.

Broadband Penetration in Largest National Local Markets

"We are following these developments closely as the market landscape continues to evolve," continued Mr. Jurutka.

"The consumer has many decisions to make regarding their home Internet service including the initial purchase decision, what price is justifiable and what connection speeds warrant an increased price."