Wi demand surveypp_nov11


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The Wisconsin demand survey points to substantial unmet demand for broadband services in every region of the state. Providers can view this result as an uncaptured market opportunity.

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Wi demand surveypp_nov11

  1. 1. Wisconsin Demand Analysis November 14, 2013
  2. 2. Wisconsin Residential Demand Survey A total of 10,999 usable residential demand surveys completed between June 2012 and October 10, 2013 Breakdown of Responses Perceived Unmet Demand  No Internet 1,463 Ave. County Rate 57%  Inadequate Connection 4,542 Median County Rate 55%  Adequate Connection 4,974 Range: Low--Buffalo County High--Vilas County 18% 78%
  3. 3. “Unmet demand” defined as percent of population not connected to Internet OR current connection is perceived “inadequate” to meet current needs.
  4. 4. Counties with Low Percentage of Unmet Demand Survey Responses Unmet Demand Survey Responses Unmet Demand Buffalo 97 18% Winnebago 129 41% Ozaukee 84 23% Rock 141 41% Vernon 58 24% Florence 72 42% Wood 221 29% Green Lake 65 43% Kenosha 208 30% Eau Claire 118 43% Milwaukee 75 32% Polk 90 43% Racine 40 32% Shawano 30 43% Waukesha 66 35% Jefferson 145 43% Sauk 1,327 36% Walworth 54 44% Barron 92 37%
  5. 5. Counties with Moderate Percentage of Unmet Demand Survey Responses Unmet Demand Survey Responses Unmet Demand Dane 156 46% Portage 66 58% Outagamie 93 46% Dunn 144 58% Sheboygan 62 47% Rusk 173 58% Burnett 74 47% Columbia 165 59% Marathon 408 47% Oneida 228 60% Waupaca 63 48% Iowa 205 60% Brown 48 48% Fond du Lac 1028 61% Oconto 65 52% Dodge 54 61% Chippewa 172 54% Price 543 62% Iron 53 55% Juneau 52 62% Adams 96 55% Bayfield 114 62%
  6. 6. Counties with High Percentage of Unmet Demand Survey Responses Unmet Demand Survey Responses Unmet Demand Marquette 157 63% Ashland 85 69% Waushara 49 63% Crawford 167 69% Clark 179 64% Pierce 137 70% Jackson 174 64% Grant 108 70% Lafayette 142 65% Taylor 195 72% Richland 165 65% Door 76 72% Marinette 159 66% Washburn 48 73% Forest 175 66% Kewaunee 242 74% Douglas 78 67% Lincoln 177 77% Langlade 209 67% Vilas 298 78% St. Croix 625 68%
  7. 7. Counties Lacking Adequate Response to Evaluate Demand Survey Responses Unmet Demand Survey Responses Unmet Demand Calumet 16 NA Monroe 20 NA Green 22 NA Pepin 9 NA La Crosse 17 NA Sawyer 29 NA Manitowoc 16 NA Trempealeau 28 NA Menomine e 2 NA Washington 21 NA
  8. 8. Reasons for not subscribing Perceived lack of availability and expense are primary reasons why Wisconsin residents do not subscribe to a broadband service Percentage broken out by County group Expense Availability
  9. 9. Internet Download Speed Definitions Used in Wisconsin Residential Demand Survey Basic Internet (765kbps – 1.5M) - Staying connected, basic email and simple web browsing, downloading video, etc. Typical Internet (1.5M to 4M)- Remote monitoring (e.g., measuring vital signs), basic telecommuting (work at home), streaming video or music (YouTube, Netflix, Spotify, etc), complex web browsing, online education/classes, medium-size file/image sharing, etc. Enhanced Internet (4M to 10M) - Online gaming, large-size file/image sharing, remote medical diagnosis, basic medical record sharing, remote education (between two or more educational sites), etc. Premium Internet (10M to 100M)- Complex telemedicine (e.g. sharing/downloading medical images), complex education services, complex gaming, complex telecommuting, high quality telepresence/video conferencing. Advanced Internet (100M to 1G)- High definition telemedicine, multiple interactive education service, etc.
  10. 10. Typical or Enhance Internet speeds (1.5 to 10 Mbps) most frequently cited as desired by those not currently connected. 38% 38% However cost is an issue. Only a few willing to pay more than $50 per month for service
  11. 11. DSL and cable modem most often used by residents to access the Internet Technologies Used by Residents to Access the Internet 37% Cable modem enjoys advantage over other technologies in perceived consumer satisfaction. 4% 9% Percent Residents Satisfied with Current Service 25% 11% 17%
  12. 12. Slow download/upload and difficulty streaming video most frequently cited issues causing dissatisfaction with current Internet service File downloads/uploads take too long Browsing on the Internet is too slow Streaming video quality is jerky/not good Video downloads/uploads take too long Photo downloads/uploads take too long Above cited as problems by at least 50% of residents presently not satisfied with their service.
  13. 13. Residents in counties with high unmet demand are much less likely to access a cable service and more likely to rely on satellite. Counties with: High Unmet Demand Moderate Unmet Demand Low Unmet Demand
  14. 14. Only one-quarter of residents perceive their current connection speed to be in excess of 4 Mbps. Current Reported Internet Access Speeds Consumer satisfaction is substantially less for residents with slower Internet connections 31% 1% 31% 9% 13% Percent of Residents Satisfied with Their Current Service by Perceived Connection Speed
  15. 15. Broadband connection speeds are generally lower in high unmet demand counties Counties with: High Unmet Demand Moderate Unmet Demand Low Unmet Demand
  16. 16. Approximately 45% of Wisconsin broadband subscribers connect at least three devices to the Internet at home The most frequently connected home devices are: Computers Smart phones Tablets Wireless routers Television
  17. 17. Two-thirds of presently connected Wisconsin residents desire to access a service delivering in excess of 4Mbps download speed. NA LT 1.5 Mbps 5% 100 Mbps to 1 Gbps 11% 1.5 to 4 Mbps 22% 10 to 100 Mbps 25% 4 to 10 Mbps 31% Desired Internet Connection Speeds
  18. 18. Wisconsin residents are not willing to pay more for “better” broadband. In fact on average they are willing to pay even less than presently. Willing to Pay Current Amount Paid for Broadband
  19. 19. Residential broadband is important to Wisconsin’s education and workforce development objectives: Just over 40 percent of Wisconsin households connected to the Internet have at least one school age child (k-12) One out of four new beneficiaries of connecting presently unserved Wisconsin households is a school age child. More than a quarter of Wisconsin households connected to the Internet access distance education course.
  20. 20. Telecommuting has become very important to the rural Wisconsin economy. However…… 58% of telecommuting households report their current Internet connection is inadequate to meet their needs. 40% of households in high unmet demand rural counties rely on their broadband connection for telecommuting at least part-time.
  21. 21. Wisconsin Business Demand Survey A total of 1,120 usable residential demand surveys completed between June 2012 and October 10, 2013 Breakdown of Responses  No Internet 70  Inadequate Connection 444  Adequate Connection 606
  22. 22. On average, 46% of Wisconsin’s businesses have unmet demand for broadband. Dissimilar to the pattern for residents, business demand does not vary significantly with county geography. Unmet demand however, is closely associated with business size and economic sector. Percent Unmet Demand by Firm Size Percent Unmet Demand by Sector Number of Employees
  23. 23. Expense, lack of availability, and perceived absence of value are the primary reasons some Wisconsin businesses do not adopt broadband. Reasons Cited by Businesses for Not Adopting Broadband Among non-adopting businesses, only half view broadband as “critical” or “very important”. However, 75% indicate they would adopt broadband if and when an affordable adequate service became available.
  24. 24. Approximately 60 percent of non-adopting businesses desire a broadband service delivering in excess of 4 Mbps download. Non-Adopting Business Desired Speed However, for many the willingness/ability to pay is limited Non-Adopting Business Willingness to Pay
  25. 25.  More than 90 percent of Wisconsin businesses rely on the Internet.  More than three-quarters of these businesses consider access to a broadband connection as “critical”. Perceived Business Importance of Broadband
  26. 26. Approximately 40% of “connected” Wisconsin businesses cite dissatisfaction with the their current Internet Service. Expense and variable service quality are the most frequently cited issues. Business issues with current Internet Service Expense Variable Service Slow Speeds Customer Service Percent of 444 survey respondents reporting current service not adequate.
  27. 27. Broadband is a significant business expense. Costs vary with size and type of business Distribution of Current Broadband Service Costs For Wisconsin Businesses Half of Wisconsin’s businesses would be willing to pay at least 10 percent more if they could receive their “optimal level of broadband service”
  28. 28. Summary Points • For Wisconsin residents, the greatest unmet demand is in low-density and difficult terrain rural locations that are costly to serve. • For businesses, unmet demand is more closely related to size an type of businesses. Location within the state appears less important. • Perceived consumer satisfaction varies with technology. Cable generally provides the highest satisfaction and satellite the lowest. • The majority of Wisconsin residents report their current connection offers less than 4 Mbps. Yet approximately two-thirds of Wisconsin residents and businesses desire connections in excess of 4 Mbps. • Expense and perceived availability are two major barriers to adoption. • In general residents are not willing to pay more for “better service” • Many businesses, however, are willing to pay more to receive their optimal level of service.
  29. 29. Implications for Rural Economic Development The highest unmet demand for broadband is in difficult and costly to serve rural Wisconsin. Rural telecommuters and agriculture businesses in particular cite deficiencies of current broadband service. Cable and DSL wireline technologies enjoy the highest level of consumer satisfaction (along with fixed wireless). While technology continues to change mobile wireless and satellite do not presently provide the robust level of broadband service demanded by rural residents. In the absence of major technological breakthrough, technological change by itself is unlikely to fully address the rural unmet demand challenge. Wireline and fixed wireless solutions are still needed. A limited willingness/ability to pay on the part of rural consumers hinders the business case for additional provider investment for all technologies. Public policy should consider incentives that improve the business case for investment in high and moderate unmet demand rural counties.
  30. 30. Implications for Wisconsin Youth One in four people that would benefit from fulfilling the demand for broadband service to Wisconsin’s presently unserved households is a school age child. As Wisconsin considers its options to extend Gigabit connections to every school and library in the state, it will be important to also recognize the reality that not all of Wisconsin’s youth have a broadband connection at home. Even where there is a broadband connection at home, those connections are not always robust enough to support data downloads and uploads as well as streaming video that is core to contemporary education. More than a quarter of Wisconsin’s households have at least one person that takes a distance education course from home and must rely on a robust broadband connection. 40 percent of Wisconsin’s connected households have at least one school age child using the computer at home. Public policy designed to improve lives for Wisconsin’s young people must recognize the full potential of public investments to extend broadband to schools and libraries must also address connections to homes where there is unmet demand.
  31. 31. Implications for State and Local Leadership 57 percent of Wisconsin’s households report an unmet demand for broadband service. Notably, while unmet demand is more significant in some counties, there is unmet demand in all Wisconsin Counties. Unmet demand for broadband translates into missed opportunities for job development, education, health care, public safety and the efficient delivery of government services. Solutions involve public and private collaboration that include both expanded supply and the connection to unmet demand. This can be accomplished in part through leadership initiatives to improve public awareness of opportunities. One reason unmet demand is not always recognized is that the individual demand is not always significant enough to support a business case for expanded private broadband investment. State and local leaders working together with the private sector can play an important role in “aggregating” local level unmet demand to a level that it becomes more feasible to recover necessary private investment.
  32. 32. Implications for Provider Opportunities The Wisconsin demand survey points to substantial unmet demand for broadband services in every region of the state. Providers can view this result as an uncaptured market opportunity. Consumer education can play a role in addressing this market opportunity. For example, the survey results indicate that many residential consumers desire to have more robust Internet connection, but are generally not willing to pay more for a more robust service. Working in collaboration with local and state public leadership, providers can provide information on the cost of expanded investment as well as the value for local residents and businesses that can be achieved from more robust broadband. Both may improve willingness to pay or alternatively advocacy for additional financial incentives from state and federal government. The demand data provides more transparent information on the location of unmet demand and opportunities for demand aggregation. Working together with potential new customers and local leadership, solutions to establish the appropriate business case for investment can be explored.