II. Aggregated Demand
Quantified and Qualified Prospective Demand that Can Be Aggregated
· Delineation by category or sector of prospective users for broadband service in the five-county region. This includes outreach to public agencies (i.e., law enforcement and public safety including prisons, emergency response and services, K-12 education, higher education and research, libraries, general government services from federal, state and local agencies, public health and medical care, and national and state parks) and key business sectors (at least the top ten employer groupings);
· Development of the interview or survey instrument(s) to be used to quantify and qualify prospective broadband users. The interview or survey instruments(s) will ascertain demand potential, broadband uses, speed of communications and affordability;
· Development of the process and format for tracking the demand potential by user category in order to quantify the potential aggregated demand by community and county;
· Identification of the specific personnel who will be involved in the interviews or surveys; and
· Description of the outreach and engagement plan directed to elected local, state and federal officials as well as civic leaders.
Demand Aggregation and Market Analysis Report: A summary of quantified and qualified prospective aggregated demand, which will include the following data and information:
· Prospective users of broadband service in the five-county region (by category or sector and location);
· Demand potential (by category or sector and location);
· Identification (and mapping) of served and unserved communities;
· Delineation of prospective broadband uses and applications;
· Speed of communications (existing and for prospective demand);
· Affordability for prospective demand (by category or sector and location);
· Survey instrument(s) and assessment of adequacy and recommendations for improvement in the future; and
· Outreach and engagement plan to inform prospective users of the results.
The counties of Alpine, Amador, Calaveras, Mariposa and Tuolumne are alike in geography, economy, population and demographics. Only two in five homes in the region have broadband access, and the population here reflects nearly every factor contributing to the Digital Divide - lower incomes, sparsely populated rural communities, mountainous terrain and a high percentage of elders.
All five counties face similar challenges inherent in delivering services to isolated communities with limited resources. With a combined population of 167,000 people, these five counties have fewer people than many California cities. Per capita income for all five counties averages $26,000/year, significantly less than the state average of $33,000. There are also several pockets of extreme poverty where per capita income averages less than $16,000. The region has had a history of boom-and-bust cycles since the discovery of gold in 1849. As the lucrative timber and mining jobs have dried up, more residents are living on the edge, economically and socially. The regional ethnic composition is primarily Caucasian (ranging from 71-83%), with a steadily growing Hispanic population (average 7.7% and growing annually), a Mi-Wuk Native American population (average 6%), and a small number from other ethnic groups (Black 1.8%, Asian 2.7%, Native Hawaiian/Pacific Islander .2%, 2 or more races 3.1%). The Sierra Foothill mountain region has an older population than California residents as a whole (average 16.5% as compared to 10.8%). The number of disabled residents total 28,880, and represent .004% of disabled residents in California. The geographic area covered is immense; it covers some 6,122 square miles.
These communities are beautiful, appealing places to live - but difficult places to make a living. Wide access to broadband and emerging technology is an essential ingredient to change that and allow communities in the region to thrive.
Every region has unique challenges for adoption of broadband, including cultural, social and geographic considerations. CSC surveyed a broad group of residents, businesses and youth to assess the issues, concerns and patterns of adoption using the metrics established by CETF: Access + Applications + Affordability + Accessibility + Assistance = Adoption. A large cross-section of the local population was sampled:
- Random telephone surveying – based on a statistically significant sample population.
- Residential survey 396 respondents.
- Business survey 123 respondents.
- Self-select survey - for residents with some business implications.
- Business leadership interviews.
- Community meetings for qualitative feedback.
The survey timeframe was from November 2008 until May 2009 and the surveyors were community volunteers.
This following sections presents key findings and implications from the regional surveys.
Access: the top opportunity for broadband adoption in the region is having access to broadband service. The demand is significant and broadband adoption is critical. Over 92% of survey respondents are willing to pay for DSL or enhanced high-speed Internet, yet almost 40% report that broadband is not available to their household.
Applications: up to 75% of respondents feel that certain broadband applications are important to their household.
Affordability: though it is difficult to assess affordability, a small portion of those surveyed, 6.7%, reported that broadband is too expensive.
Accessibility: up to 6% of the population have challenges that make it difficult to use the Internet, though this number includes difficulty with walking or leaving home which could be improved if broadband was to be made available in the household.
Assistance: over 64% reported that they need little or no assistance to access the Internet.
Access is the key opportunity and challenge to broadband adoption for the CSC region.
The objective of the residential survey was to assess the potential demand for broadband in five Central Sierra Counties: Alpine, Amador, Calaveras, Mariposa and Tuolumne, using five metrics established by CETF. The survey also gathered demographic information to help facilitate analysis of the results.
The residential survey was completed from November 2008 until January 2009 based on a statistically significant random telephone sample of 396 responses. Survey methodology is detailed in the appendix.
Over 90% of respondents have landlines and 70% of the respondents have a cell phone calling plan yet only around 60% subscribe to Internet plans. Over 80% subscribe to paid television (satellite plus cable) which is also higher than Internet plans. The penetration of technologies such as VoIP, cell phone data plan and mobile broadband is very low, less than 10% for all of these types of technologies. Plans were not significantly skewed toward income or education levels.
Almost half of respondents do not have residential broadband and almost 40% report that broadband is not available for their household. 23% are still on dial-up, 15% have satellite Internet and over 10% have no Internet at home at all. 34% of respondents reported to have DSL, 8% have cable modem and almost 6% have wireless broadband.
There is only an 8% gap between those who don’t have broadband and those who can’t have broadband due to availability. There is strong potential uptake rate for broadband.
With broadband rates at only about 40% in the region, residential broadband demand is a significant opportunity.
To assess service satisfaction in the residential random telephone survey, the survey asked about any concerns or frustrations that current users face.
The three key issues were:
1) Service is too slow when accessing large files;
2) Service has gaps in availability; and
3) Downloads are too slow.
These service issues are largely due to the fact that many Internet users in the region are limited to dial-up access, which is not fast enough or reliable enough for user satisfaction.
According to the additional self-select survey, the majority of cell phone and telephone users are satisfied with their service, but the majority of Internet users are not satisfied or are very dissatisfied with their service. This frustration is a key concern for the region.
The most significant challenge reported by respondents was difficulty with mobility (walking or leaving the home) at 5.8%, followed by difficulty typing at about 4%. Of those with mobility challenges, 30% don’t have broadband available at home and most are over 45 years old. This group spends significantly more hours on the Internet (25-50 hours per week compared to the majority of 1-10 hours per week). If home broadband was available, those with mobility or other physical impairments might have adoption rates equal or better than average. For those in the region with physical challenges, broadband is a potential lifestyle opportunity or even necessity.
One of the key economic concerns for service providers in the region is the financial business case for infrastructure investment, including the willingness of the local population to pay for services.
Though the majority of respondents pay $11-29/month there is a huge spread in monthly plans. Some in this category report that they don't have access to broadband and others report that they do. Most of this group reports that their Internet is too slow. Many respondents who report paying over $75/month also report slow internet speeds and gaps in service. Though the majority pay $11-29/month, respondents are consistently willing to pay more than this ($20-$40) for broadband.
The chart below demonstrates that willingness to pay is not a top adoption concern for the region. Those in the high-income band are willing to pay for higher cost satellite services for example to get broadband speeds whereas the low-income group less willing, but even those in the low-income band are willing to pay for DSL at comparable price points,
if broadband becomes available.
About 64% of respondents do not need assistance accessing the Internet and 27% reported sometimes needing assistance. 2.5% reported needing a lot of assistance and the majority of these have accessibility challenges as mentioned above. The majority of those needing assistance are households with persons over 60 years old. Though about 6% of respondents reported wanted some kind of training or support, less than 1% were willing to pay for it.
Qualitative data from the survey shows a strong frustration in the region toward the lack of access to broadband. Respondents have remarked that the region is much too slow in implementing access to broadband. In addition, respondents have noted an inequality in access between neighboring areas within the community. Though some respondents were hopeful that this survey would help expand availability, more of the respondents simply wanted to know
when broadband would be available since they were ready to subscribe.
As the region moves forward in local broadband efforts, providers will need to be very cognizant of the frustration the region shows regarding lack of access, and focus local communication on realistic plans for improving availability on a timely basis.
To note, this survey was done during a time period before the huge impact of the economic challenges were realized. Today, the region's attitude toward affordability or willingness to pay may have changed with increases in job loss. Additionally as the region redevelops jobs and job skills, the lack of broadband availability may become and even more severe barrier to adoption and economic recovery.
CSC made a pointed effort to engage with local businesses during the survey process. However, the business survey questions were fully leveraged from other CETF grantees. This allowed consistent comparisons of data from region to region.
The workplace survey was based on a random telephone survey sample of 123 respondents completed in the December 2008 through May 2009 timeframe.
The summary of results is attached in the appendix.
Local businesses are still lacking broadband, with over 20% of reporting access thorugh dial-up or ISDN service. Businesses surveyed feel that access is critically or very important to their success.
Most business respondents are satisfied with the service provided by their Internet service provider (ISP). However, greater than 20% are either unsatisfied or very unsatisfied with their service
The following image is an excellent representation of the business community's willingness to pay. Traditional market forces do not play here since there is a situation where people are willing to pay more for services than they are currently paying. This can be explained by the anomaly in the region of pent-up willingness to have broadband at seemingly more expensive rates than current, since broadband is presently unavailable and yet is critical to business.
The key point for service providers in the region is to provide more reliable, faster service to local businesses at an affordable cost. Though this seems like a business basic, according to the survey results, the economics of affordability are not what one would find in a traditional supply-demand situation because regional businesses are suffering from lack of competitive broadband and a potential pent-up demand for high speed and reliability.
The key objective of the Tuolumne County youth survey was to assess the potential demand for broadband by youth in the Central Sierra, leveraging the five metrics used for the residential and business survey and established by CETF. The survey was completed from April through September 2009 based on a sample of 106 youth responses.
Key findings: the most salient issue found in the youth broadband survey analysis is that broadband is not available to the majority of the youth respondents. 54.7% of respondents report that high-speed Internet is not available. The second, but largely less significant issue is that 21.3% report that high-speed Internet is too expensive.
The survey respondents were in 9th through 12th grade, which represents ages around 14-17 years old. This survey population is a relatively technically savvy population, where 91.3% of the population claim that most people they know are connected online. Less than 3% reported needing much support to get on the Internet.
The majority of the respondents have been online for more than 3 years (71.8% of respondents) and almost 90% go online several times a week.
The respondents connect to the Internet using wireless devices (60%) and spend more time on cell phones than on traditional landlines.
Survey results show a high demand for all types of Internet applications, including those functional through dial-up as well as broadband applications. Email ranked the highest in terms of online applications. Local youth respondents are highly connected: email, text messaging and instant messaging are all communication activities performed by more than 50% of the respondents.
The survey results raise the following questions or ideas for further research:
· Are unconnected youth more likely to fall behind their peers academically and socially? And if so how much impact would this disability have on youth?
· This survey was limited to youth in 9-12th grade. How would results be different for younger respondents?
· How likely is it that the region's youth will leave their rural community to seek better access to broadband technologies? One of the concerns in the region is that the younger population will leave and not be able to return due in part to technological inequalities.
Throughout the five-county region the theme is clear with both residents and businesses: There is an immediate need for affordable, fast, more reliable, and accessible broadband. Businesses are more willing to pay for better availability, but less willing to pay for assistance or support. Service providers have market opportunities in cell phone data plans, Voice over Internet Protocol (VoIP), mobile broadband, and hotspots.
CSC represents a RURAL, unserved and underserved community, where ACCESS is the first, but not the only challenge. The survey implies that accessibility is:
NOT an income issue
NOT a willingness to pay issue
NOT age, race, education level issue
The five-county Central Sierra region is a rural unserved and underserved community, where access is the first, but not the only challenge. The survey shows that access is not an income, willingness to pay, age, race, or education level issue.
In summary, the survey results present an accurate snapshot of the region's broadband gaps and needs, and the region's frustration. It is a clear message to providers and community advocates that broadband availability is needed now, as illustrated in the tag cloud below.
