According to ID Insight’s latest report, The State of Broadband Competition in America – 2010, Minnesota ranks number 13 in terms of the most competitive broadband environment. (You have to sign up to get access to the report; however, the report is free.)
The ranking is interesting – but the good stuff, in my opinion, really is in the details. They found that:
- There is a strong correlation between income and home value and the level of competiveness in a state. As income and home values show an increase from state to state, the level of competition – as measured by the report – decreases.
- States with the largest percentage of Internet users and the highest available speed tend to be less competitive.
- The bulk of broadband stimulus funding did not go to states with the least competitive environments.
At first this seems a little strange – but it makes sense. Where there are profitable customers one of two providers have stepped in to supply service. In areas where this is less true the market is still pretty open. The researchers raise some good questions about these findings:
- If more lucrative markets tend to become less competitive, will this trend continue?
- If the most lucrative markets tend to become less competitive, what will incent those providers to increase their networks and available speeds?
- In the areas with lower incomes that have more competitive environments, what factors will increase broadband adoption (an assumption being that there are barriers either to constituents buying services from these competitors, or competitors selling services)?
Also interesting is that these findings are true for Statewide perspective, but do not hold at a countywide level. Here is what they say…
In reviewing the data, this does not appear to be the case, especially as we moved to more rural counties. What we saw instead was noise. As we got down to the county level, it appeared that the competitive environment was much more volatile. Some counties are extremely competitive while others are even more monopolized. The highly competitive areas appear more the result of local communities having a greater hand in determining their broadband future than areas where the larger providers are acting mainly for financial reasons.
