Dr. James Prieger Releases New Study on Growth of Broadband Internet Access Market in California

Dr. James Prieger, associate professor of public policy at the School of Public Policy, has published a new study that details the enormous progress made in delivering high speed Internet access to consumers and businesses in California and nationwide.

In “The Growth of the Broadband Internet Access Market in California,” Professor Prieger details the rapid growth of the market in California over the last two decades. Broadband has been growing at an annualized rate of 30.4 percent since 1999. As of 2014, 98 percent of Californians lived in areas where fixed broadband speeds of at least 10 Mbps was available. More than 130 broadband providers have entered the market and the typical consumer can choose from five types of broadband offered by 9 providers.

At the same time, traditional voice landlines have declined 8.1 percent per year in California since 2004, with a 12.7 percentage decline from 2012 to 2013. Traditional voice service is quickly approaching irrelevance in most of the voice market. When looking at residential service only, the decline is even steeper: California consumers dropped one in five of their remaining traditional voice lines in 2013, so that only 9 percent of all residential voice lines in California were traditional ones. Consumers instead are using wireless and VoIP lines. As of the first half of 2014, 47 percent of U.S. households relied on only wireless phones in the home and two-thirds relied almost exclusively on their wireless phones.

Despite widespread availability and adoption of broadband, certain groups, including low income households, African Americans, Hispanics, and Native Americans, lag the average adoption rate by 8 to 20 percentage points. According to the study, bridging these adoption gaps might be more achievable then is commonly thought. For example, only 116,000 low income households per year over five years would have to adopt broadband to achieve parity with households above the poverty rate.

The paper concludes with policy recommendations to expand broadband access and adoption, including reducing the cost of infrastructure deployment, coordinating state and federal rural access subsidies to prevent waste, and updating state and federal Lifeline programs to support broadband.

The study is available on the School of Public Policy Working Paper Series website.