Fiber Consumption and Density
We all know that fiber is good for your diet, but how does it relate to population density? According to the Fiber-to-the-Home (FTTH) Council, FTTH networks are now available to more than 15 percent of homes in the United States. More than 9 million households across North America are now connected directly into high-speed, high-bandwidth fiber optic networks. Thousands of new connections are being made every day. Between the Stimulus grant monies and community driven agendas, providing a fiber broadband option is becoming more commonplace.
In this second look at fiber consumption in the United States, we took a look at fiber availability and adoption by population density. In our first analysis looking at the various Regions of the country, we saw that the Mid Atlantic states had the highest fiber availability rates but other regions of the country had higher adoption rates when we account for where fiber is actually available. This regional view is potentially masking differences that could be driven by other factors—like, perhaps, population density.
The BroadBand Scout Database* is comprised of over a billion internet transactions that link consumers’ physical addresses to their specific broadband provider. The database is freshened on a frequent and periodic basis, allowing for the tracking of provider-level usage, technology adoption, and carrier market share shift. To look at fiber broadband adoption by population density, we appended the county-level population density obtained from the latest 2010 Census estimates. We then ranked all of the counties in the United States by population density and placed them into ten equal-sized groups (i.e., deciles). Decile 1 represents the 10 percent of counties that have the lowest population density while Decile 10 represents the 10 percent of counties with the highest population density.
In this study, we first looked at the relationship between fiber usage and population density. As is shown in Chart 1, there is a very strong and positive relationship (R2=.87) between population density and fiber usage—that is, the usage rate of fiber increases as the population density goes up. This does confirm our understanding that the adoption of fiber is higher in urban areas than rural areas. It is also clear that this is a bit self-fulfilling because urbanites with higher population densities have a higher likelihood of actually having access to the fiber option.
Chart 1: Fiber Usage by Population Density
To get a more fair perspective on consumer behavior (i.e., adoption), we ran the same analysis but limited our dataset to those areas of the country where Fiber is actually available as a broadband connectivity option. Chart 2 below shows that when taking into account availability, there is still a positive relationship between population density and fiber usage; however, this relationship is weaker as seen by the lower R2 and trend line that is less steep than we see in Chart 1. The relationship is still moderately strong, meaning that consumer adoption is in fact higher in more densely populated areas.
Summary and Conclusions
There are clear differences in fiber availability and usage based on population density—urbanites have higher availability and tend to opt for fiber at a higher rate than consumers who live in less populated communities. While population density should be a key consideration for project planners and providers, we know there are other factors that are also important when considering how to roll out more fiber—the number of competitive options, competitor pricing and entrenchment, household income, business landscape, etc. We will be looking into these and other factors in upcoming blogs as we dig deeper on the topic of fiber and broadband usage. Also, please let me know if you have additional thoughts on how we can provide some additional views into the data.
* For this study, we took a random sample from the Broadband Scout Database for transactions occurring between March 2013 and June 2014. We then appended 2010 Census estimates to determine population density.
** For fiber availability, we used the December 2013 National Broadband Map data from the NTIA’s State Broadband Initiative Program.