Wealthiest in Washington area get best high-speed Internet values, study says
Saturday, February 19, 2011
Residents of the wealthiest parts of the Washington region tend to get the best value in high-speed Internet service, paying less for faster speeds, according to a new study from American University.
The report, released Friday by the university's Investigative Reporting Workshop, analyzed speed test and pricing information for high-speed Internet users in the greater Washington area.
It found that people in the 25 richest Zip codes in the region spend about one-third less on average than those in the 25 poorest Zip codes for similar Internet access speeds.
Subscribers in suburbs including Fairfax, Montgomery and Arlington counties spend about $9.58 per megabit per second. Residents in the lowest-income neighborhoods, which include rural areas and parts of the District, pay about $31.17 per megabit per second, according to the study.
The monthly bill in wealthier areas is typically higher - $55.05 compared with $51.29 in the poorer areas - but speed tests showed poorer areas get much lower speeds for the money.
"The original digital divide was about access, but we are now moving into a territory where we are understanding that the real barrier to access is about price and value," said John Dunbar, author of the AU report.
The findings complement data released Thursday by the Commerce Department, which also showed that many wealthy areas of the nation are getting faster broadband Internet speeds than poorer parts of the country.
The federal data, however, were collected from Internet service providers based on their maximum advertised speeds. The Commerce information didn't include broadband prices.
AU's report, taken from a much smaller survey sample, comes from 4,294 consumer speed tests on Ookla, an online service recommended by the Federal Communications Commission for testing the speed of a broadband connection. And the university study takes into consideration monthly costs reported by users.
"This is all new and very valuable information for policymakers and consumers that will frame discussions going forward," said Lee Rainie, director of research at the Pew Research Center's Internet and American Life Project.
Experts say that even though the AU report sample size is modest, it provides insights that the federal map doesn't. The agency showed that 10 percent of the nation doesn't have access to speeds fast enough to download Web pages or watch videos.
The agency said it will update its map every six months and will improve its speed information by adding results from consumer tests, although that pricing is difficult to analyze.
"Broadband service is not priced in a uniform way among providers," said Lawrence Strickling, assistant Commerce secretary. "Even if you could do an apples-to-apples comparison, the prices gathered six months ago would likely be outdated when we update the map."
But experts say that information is crucial to understand why users - particularly those in low-income areas - aren't buying broadband service.
As President Obama touts his $18 billion plan to expand broadband access across the country, experts say there appears to be a growing digital divide, with poor and rural areas being left behind.
"I think that if you dig around you will find that the infrastructure of poor communities is worse," said Craig Settles, an independent broadband market analyst and consultant. "It is directly related to expected return on investment" by Internet service providers, who want to make sure they get the most possible paying customers, he said.
Companies such as Comcast and Verizon - major Internet service providers in the Washington area - dispute AU's findings. Verizon said the report doesn't adequately account for the practice of bundling, in which companies offer packages of phone, television and Internet service with a discount for subscribing to all three.
Bundles "provide consumers with greater values in pricing, but which this study chose to not factor," said Ed McFadden, a Verizon Communications spokesman.
Comcast said it offers its highest-quality broadband speeds - 100 megabits per second - equally across its consumer base in the Washington area, including low-income parts of Southeast Washington.
"Starting when we first offered broadband service in the D.C. area over a decade ago, we built out the D.C. service area with the same high speeds - among the highest offered nationally," said Charlie Douglas, a spokesman for Comcast. "We're committed to offering a great value in every corner of the city."
For Hugh Youngblood, a resident of the Bloomington neighborhood of the District, the problem is not having enough options. He can choose between Verizon's DSL service or Comcast's more expensive but faster cable modem service.
The network and security engineer chose a package of 1.5 megabits-per-second DSL service bundled with phone and television at $50 a month.
"I went for the bargain price, which is probably okay for now but it's not going to let me do everything I want," he said.