Broadband Plays Catch-Up in Rural Areas, Outpaces Growth in Big Cities

A study on broadband growth in rural, metropolitan and metropolitan areas in the United States indicates that while broadband penetration is much higher in the metropolitan and micropolitan areas, broadband has experienced the most significant gains in rural areas during the past two years. Rural markets (defined as having a population less than 10,000) in the U.S. experienced 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. Comparatively, micropolitan areas (population between 10,000-50,000) grew 14 percentage points during the same period, while metropolitan areas (population 50,000+) grew 11 percentage points. Even though rural markets have experienced significant growth, their broadband penetration of 75 percent remains well below the national average of 89 percent. Lower broadband penetration in rural areas is compounded by lower Internet usage overall. According to a 2007 analysis by U.S. Department of Agriculture Economic Research Service, 63 percent of all rural households had at least one member access the Internet, compared with 73 percent of urban households. While large broadband providers such as AT&T and Comcast have a presence in rural areas, smaller and more localized providers such as Cincinnati Bell, Insight, PenTeleData, Mediacom and Bresnan Communications are proving tough competition in the battle for market share. For example, in Billings, Montana, Bresnan is the leading broadband provider with 63 percent of the market. Broadband penetration is still relatively low in Billings at 77 percent, indicating that Bresnan is well positioned to grow as broadband adoption continues to increase.