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The State of Broadband Internet Access in America

The seventeen largest cable and telephone service providers in the U.S. -- representing about 94 percent of the market -- acquired 3 million net additional broadband Internet subscribers in 2014, according to the latest market study by Leichtman Research Group.

Annual net broadband additions in 2014 were 114 percent of the total in 2013. These top broadband providers now account for 87.3 million subscribers -- with cable companies having 51.9 million broadband subscribers, and telephone companies having 35.4 million subscribers.

Other key findings from the market study include:

  • The top cable companies netted 89 percent of the broadband additions in 2014 – compared to 82 percent of the broadband additions in 2013.
  • The top cable companies added 2.65 million broadband subscribers in 2014 – 123 percent of the total net additions for the top cable companies in 2013.
  • The top telephone companies added about 345,000 subscribers – 72 percent of the total net additions for the top telephone companies in 2013.
  • AT&T U-verse and Verizon FiOS broadband subscribers now account for 53 percent of telco broadband subscribers – that's up from 37 percent at the end of 2012.
  • The top cable companies had 2.3 million more net additions than telephone companies in 2014 – compared to 1.7 million more net adds in 2013.

According to the Leichtman assessment, at the end of 2014, the top cable and telco broadband providers in the U.S. cumulatively had over 87.3 million subscribers, adding 3 million subscribers in the past year. Otherwise, little has changed in the marketplace (granted, Google Fiber is an anomaly).

Even in the most developed metropolitan markets, broadband service providers still operate in a duopoly environment -- where one dominant cable company and one telco provider serve a captive customer base that has few, if any, alternative choices.

While about four of every five U.S. households now subscribe to broadband at home, there were more broadband net additions in 2014 than in 2013. This was the first year-over-year increase in broadband net adds since 2006 over 2005. Clearly, that's a very welcomed sign of progress -- even if it took a decade to achieve.

However, in order for the major commercial centers within America to be equipped to compete with their leading peer-group cities in the Global Networked Economy, more broadband service provider competition is required to stimulate further [new] infrastructure investment.

Net Neutrality and Other Policy Distractions

Today, the status-quo agenda of federal, state and local government public policy clearly doesn't create the environment for meaningful and significant change. There's little incentive for the two incumbent service providers in each municipality to aspire to better serve their customers with improved broadband performance at a more competitive price.

Moreover, a continued policy focus on the Americans that live in remote or rural parts of the country, who often have no wireline broadband provider, is a distraction from the much greater economic development issue -- that being the globally inferior broadband offerings in the nation's primary centers of commerce.

The rapidly evolving Global Networked Economy of the 21st Century will continue to punish the strategic complacency of political leaders that see the world as it used to be, not as it really is today. This emerging new economy, that favors the bold application of digital business transformation, will reward those forward-thinking nations who apply their superior infrastructure to ensure continued prosperity.

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