Satellite. A variety of broadband access  technologies and services are also provided on unlicensed spectrum— that is, spectrum that is not specifically under license for a particular  provider’s network. About 30 Million American Households Purchase Broadband Service; Despite Evidence of Substantial Broadband Deployment throughout the United States, It Is Difficult to Assess Deployment Gaps in Some Areas

We found that in 2005, about 30 million American households—or 28  percent—subscribed to broadband, although households in rural areas  were less likely to subscribe to broadband service than were households in  urban and suburban areas. Some stakeholders find FCC data  collection efforts useful for comparison of adoption of broadband across  states, but we found that the data may not be as useful for understanding  the status of broadband deployment across the country. Deployment of Broadband Appears to Be Extensive, but FCC’s Form 477 Data May Not Provide an Accurate Depiction of Gaps in Broadband Deployment

In order to fulfill its responsibility under section 706 of the  Telecommunications Act, FCC collects data on companies’ broadband  operations. A Variety of Market and Technical Factors, in Addition to Government Involvement and Access to Resources at the Local Level, Have Influenced the Deployment of Broadband

Several market characteristics appear to influence providers’ broadband  deployment decisions. As such, some  stakeholders noted that highly rural areas—which generally have low  population density—can be costly to serve. Terrain was also frequently cited as a factor affecting broadband  deployment decisions. Some stakeholders also said costs for what is known as “backhaul” are  higher for rural areas and can affect the deployment of broadband  networks in these areas. Federal and State Government Efforts, and Access to Resources at the Local Level, Have Impacted the Deployment of Broadband

We found that government involvement in several venues, and access to  resources at the local level, have affected the deployment of broadband  networks throughout the nation. Federal Programs Have Funded Broadband Infrastructure

We found that several federal programs have provided significant financial  assistance for broadband infrastructure. A Variety of Household and Service Characteristics Influence the Adoption of Broadband

We developed an econometric model to assess the many factors that might  influence whether a household purchases broadband service. Some stakeholders also told us that the availability of applications and  content not easily accessible through dial-up, as well as the degree to  which consumers are aware of and value this availability, contribute to a  household’s decision to adopt broadband. Stakeholders Identified Several Options to Address the Lack of Broadband in Certain Areas, but Challenges Exist with Implementation

Stakeholders we spoke with identified several options to facilitate greater  broadband service in unserved areas; however, each option poses special  challenges. It is not clear whether a loan program—such  as the RUS loan program—is effective for helping rural areas gain  access to broadband services. Scope and Methodology

The objectives of the report were to provide information on (1) the current  status of broadband deployment and adoption, (2) the factors that  influence the deployment of broadband networks, (3) the factors that  influence the adoption of broadband service by households, and (4) the  options that have been suggested to spur greater broadband deployment  and adoption. The decision to deploy broadband service is a  function of  the population in the area;  the population density in the area;  the percentage of the population residing in an urban area;  the per-capita income in the area;  the educational attainment of the population in the area;  the population teleworking in the area;  the age of the population in the area;   the distance to a metropolitan area with a population of 250,000 or   whether the state in which the area is located imposed a tax on Internet  access in 2005. Industry stakeholders  expressed concerns about the ubiquity of service, data transmission  speeds, and the monthly costs associated with 3G service.
Why GAO Did This Study

Both Congress and the President have indicated that access to broadband for all Americans is critically important. Broadband is seen as a critical economic engine, a vehicle for enhanced learning and medicine, and a central component of 21st century news and entertainment. As part of our response to a mandate included in the Internet Tax Nondiscrimination Act of 2004, this report examines the factors that affect the deployment and the adoption of broadband services. In particular, this report provides information on (1) the current status of broadband deployment and adoption; (2) the factors that influence the deployment of broadband networks; (3) the factors that influence the adoption, or purchase, of broadband service by households; and (4) the options that have been suggested to spur greater broadband deployment and adoption.

What GAO Found

About 30 million American households have adopted broadband service, but the Federal Communications Commission's (FCC) data indicating the availability of broadband networks has some weaknesses. FCC conducts an extensive data collection effort using its Form 477 to assess the status of advanced telecommunications service in the United States. For its zip-code level data, FCC collects data based on where subscribers are served, not where providers have deployed broadband infrastructure. Although it is clear that the deployment of broadband networks is extensive, the data may not provide a highly accurate depiction of local deployment of broadband infrastructures for residential service, especially in rural areas. A variety of market and technical factors, government efforts, and access to resources at the local level have influenced the deployment of broadband infrastructure. Areas with low population density and rugged terrain, as well as areas removed from cities, are generally more costly to serve than are densely populated areas and areas with flat terrain. As such, deployment tends to be less developed in more rural parts of the country. Technical factors can also affect deployment. GAO also found that a variety of federal and state efforts, and access to resources at the local level, have influenced the deployment of broadband infrastructure. A variety of characteristics related to households and services influence whether consumers adopt broadband service. GAO found that consumers with high incomes and college degrees are significantly more likely to adopt broadband. The price of broadband service remains a barrier to adoption for some consumers, although prices have been declining recently. The availability of applications and services that function much more effectively with broadband, such as computer gaming and file sharing, also influences whether consumers purchase broadband service. Stakeholders identified several options to address the lack of broadband in certain areas. Although the deployment of broadband is widespread, some areas are not served, and it can be costly to serve highly rural areas. Targeted assistance might help facilitate broadband deployment in these areas. GAO found that stakeholders have some concerns about the structure of the Rural Utilities Service's broadband loan program. GAO was also told that modifications to spectrum management might address the lack of broadband infrastructure in rural areas. Also, because the cost of building land-based infrastructure is so high in some rural areas, satellite industry stakeholders noted that satellite broadband technology may be the best for addressing a lack of broadband in those regions. While several options such as these were suggested to GAO, each has some challenges to implementation. Also, a key difficulty for analyzing and targeting federal aid for broadband is a lack of reliable data on the deployment of networks.