But on the positive side, the Pew survey continues to show that we are making steady and in some areas impressive progress in getting more Americans connected to broadband.  The survey finds that 55% of all American homes have a broadband connection.  That is up from 42% in 2005 and 47% in 2007. 

Roughly one-quarter of all homes (27%) are not connected to the Internet at all.  Of the 73% of homes that are connected, 79% have high speed connections and most of the rest have dial up.

In the last survey (2007), penetration of broadband in poor homes (those making less than $30,000 a year) was growing rapidly.  In this survey, penetration of broadband among those who are very poor (those making less than $20,000 a year) has stalled but those who are lower-middle income (those making between $20,000 and $40,000) were signing up at a pretty fast clip for broadband. Pew suspects the slow down among those at very low income levels is due to the economy.

Growth of broadband was strong among middle aged and older Americans (those over 50) and even those over 64 were signing up for broadband at a more rapid pace than in 2007.  Rural Americans were also among the categories of citizens who were signing up for broadband at a rapid clip.  The growth rate of adoption for rural Americans was 23% from 2007 to 2008, although the level of broadband adoption in rural areas is still far lower than in urban and suburban markets.

For the first time in a Pew project survey, two percent of those surveyed who have a broadband connection say it is “fiber”.   This is low, in my view, since Verizon has around 2 million FiOS high speed customers and we represent about 70 of all fiber lines deployed in the U. S.   If the total number of homes connected is 55% (or around 58 or 59 million), then our 2 million customers alone would represent more like 3 or 4 percent of all customers.   Since this is a survey asking people to specify on their own what kind of connection they have, it is quite possible that many don’t really know what kind of connection they have or mistakenly answer this question. In any event, the importance is that this is the first time customers have spontaneously responded that they have a fiber connection so the technology is making inroads.

The survey shows too, contrary to some of the criticisms I’ve heard, that the average price of broadband in the U. S. actually fell in from 2005 to 2008 (from 36 a month to $34.50 a month) while the price for dial up access increased (from $18 in 2005 to $19.70 in 2008). 

While those on dial up cite price as a key reason they have not switched to broadband, those who do not have Internet access at all do not mention price as the key reason they are not online.  Many (33%) say they are not interested; 12% say it is not available where they live; 9% said using the Internet is difficult or frustrating; and 7% say it is a “waste of time”. 

Recent work by other groups confirms Pew’s findings in this regard.  Connect Ohio, for example, an affiliate of the Connected Nation organization, is working now in the state of Ohio to help promote deployment and uptake in that state.  They just completed a very interesting survey of broadband use in Ohio.  Here are some of the key findings regarding why those who do not subscribe to broadband remain unconnected:

• A quarter of Ohioans do not have a computer at home.  This is an average and more than 36% of low income families (those making less than $25,000 a year) do not have a computer.

• More than one-half of Ohio residents who do not own a computer believe they don’t need a computer.

• Lack of a computer is the largest barrier to Internet adoption in Ohio, cited up to nine times more often than the cost of Internet service across all age groups.

• More than one-half of Ohio residents who do not subscribe to broadband service believe they do not need broadband, or do not understand the benefit of subscribing.

• This means there are currently almost 1 million Ohio adults who have the ability to subscribe to broadband but believe they don’t need broadband.

I am not in any way denying that we still have a challenge in getting broadband deployed to some areas, especially rural areas.  We know we have work to do there but we do believe that the Connected Nation model has proven itself and we are working with them to support their efforts.  But it is clear that a range of other factors remain to be addressed.   Over time, as today’s youth mature, I am sure that some of the challenges we see today with regard to broadband adoption will go away.  Today’s kids are used to having broadband and wireless connectivity and rely on the Internet for school work and social connections.  

But for the next few years, efforts to promote content and applications that are more compelling for consumers will help make convince people to get a broadband connection.    Everything from more use of online education content (such as is available on the Thinkfinity web site that our Verizon Foundation supports), to work by Connected Nation through its “No Child Left Offline” program to get PCs into the homes of those who cannot afford them, to the work of One Economy and its initiatives aimed at people in more urban settings will be important.