Competition Among U.S. Broadband Service Providers

Executive Summary

More than one quarter of American homes have not adopted Internet service, many citing cost as 

their primary reason. Since market competition can significantly affect consumer prices, we set out 

to ask: how many Internet service providers (ISPs) are available to consumers at different levels of 

download speeds?

Looking at Internet service options available to households in December 2013, using data from the 

Census Bureau and National Telecommunications and Information Administration, we find that 

more service providers offer lower-speed than higher-speed service. At download speeds of 3 

megabits per second (Mbps), which is the Federal Communications Commission’s current 

approximate standard for basic broadband service, 98 percent of the population had a choice of at 

least two mobile ISPs and 88 percent had two or more fixed ISPs available to them. 

However, as multiple household members increasingly consume video streaming services music 

streaming, and online games, the adequate broadband speed bar has been raised. To understand 

just how slow 3 Mbps is, it takes about 2.25 hours to download a 6 gigabyte movie. The same 

movie would only take 16 minutes to download at 25 Mbps.

At somewhat higher speeds, such as 10 Mbps, the typical person still is able to choose among two 

fixed ISPs. The typical person also has the option of choosing among three mobile ISPs. At even 

higher speeds, however, the number of providers drops off dramatically. For example, only 37 

percent of the population had a choice of two or more providers at speeds of 25 Mbps or greater; 

only 9 percent had three or more choices. Moreover, four out of ten Americans did not live where 

very-high-speed broadband service – 100 Mbps or greater – is available. Of those with access to 

broadband at this speed level, only 8 percent had access to two or more providers; 1 percent had 

access to three or more. Only 3 percent of the population had 1 Gbps or greater available; none 

had two or more ISPs at that speed. 

The report examines both fixed and mobile ISPs. We separate our analysis of these two types of 

Internet access because some groups consider them to be imperfect substitutes, especially for 

higher-bandwidth applications. Mobile ISPs typically charge high fees if consumers exceed data 

usage limits. Furthermore, the service is less reliable, companies have not fully deployed newer 

generation technologies with higher download speeds and reduced latency, and mobile service is 

virtually non-existent at download speeds of 25 Mbps or greater. 

In sum, the report finds that the number of ISPs from which consumers can choose varies by speed; 

there are multiple providers of lower speed broadband but this number dwindles at higher speeds. 

All else equal, having fewer competitors at a given speed is likely to drive up prices. As a result, 

some consumers will decide not to adopt Internet access at all, some will choose a slower speed 

that otherwise, and some will economize in other ways. 

By 

David N. Beede

Economist

Office of the 

Chief Economist

(OCE)

OCE Issue Brief

# 01-14

December 2014

Special thanks to 

Rafi Goldberg of 

NTIA and Rudy

Telles, Jr. of OCE

for replicating the 

estimates 

described in this 

report as well as 

many substantive 

suggestions (see 

back cover for the 

full list of 

acknowledgements).

U. S. Department of Commerce, Office of the Chief Economist Page 1

Introduction

Over the past two decades, the Internet has had 

profound and rapidly growing effects on the 

economy, culture, and social interactions of 

Americans. Yet more than one in four

households in the United States have not 

adopted broadband technology to access the 

Internet at home (on a computer, tablet, or 

mobile device). About 29 percent of 

households that have not adopted home 

Internet service cited cost as the primary 

reason.1 

Competitive market forces – the ability for a 

broadband service subscriber to switch ISPs –

are powerful disincentives for ISPs to exercise 

market power. Increased market power by 

sellers often results in higher prices for 

consumers. In addition, increased market 

power may adversely affect customers in other 

ways, such as reductions in product quality or

variety, service, or innovation.2 Some observers 

have suggested that existing levels of 

broadband (including mobile) service 

competition are sufficient to limit the exercise 

of market power, thus keeping subscription 

rates consistent with the cost of service.

3

 

This report uses Census block-level data4from 

two sources to understand the level of 

competition5in fixed and mobile residential 

broadband services (where “fixed” service 

includes wireline and terrestrial fixed wireless 

service6):

 The December 31, 2013 National 

Telecommunications and Information 

Administration’s State Broadband Initiative 

(SBI), which includes data on ISPs including 

their broadband technologies and 

advertised speeds they offered; and

 Population data from the Census Bureau’s 

2010 Decennial Census Summary Files.

We find that at download speeds of 3 Mbps,

which is the approximate definition of basic 

“broadband” download speeds,

7

98 percent of 

the population had a choice of at least two 

mobile ISPs, and 88 percent had two or more 

fixed ISPs available to them. 

Figure 1: Simplified View of Internet Network Connections

Adapted from Federal Communications Commission, “Exhibit 4-1: Simplified View of Internet Network Connections,” 

Connecting America: The National Broadband Plan, 2010, p. 45 (http://www.fcc.gov/national-broadband-plan).

Public 

Internet

Broadband 

provider 

backbone 

transport

Broadband 

provider 

middle mile 

transport

Internet 

gateway 

(peering 

exchange)

ISP access network

ISP link

(last 

mile)

Wi-Fi

Public Internet content: content hosted by multiple ISPs and content providers worldwide

Internet gateway: closest peering point between broadband provider and the Internet for 

content producer Link between and middle miles and backbone network: broadband provider managed 

interconnection ISP access network: Point where ISP sends data to and from its edge customers

Modem: ISP-managed customer premise equipment last connection point to ISP network

Consumer device: device connected to modem through internal wire or Wi-Fi, including 

customer-managed hardware and software used to access the Internet and process content

Modem

Internet Service Providers 

(Focus of Report)

Content 

“Producers

”

Content 

“Consumers”
Page 2 U. S. Department of Commerce, Office of the Chief Economist

However, as multiple household members 

increasingly consume video streaming services8

(often “cutting the cord” and abandoning 

traditional cable television9), music streaming,

and online games, the bar for what constitutes 

adequate broadband speed has been raised.10

For example, at 3 Mbps it takes about 2.25 

hours to download a 6 gigabyte movie (and 

downloading such a movie may exhaust many 

monthly data caps on mobile service). In 

contrast, at download speeds of 25 Mbps it 

takes only 16 minutes to download the same 

size movie.11 The Federal Communications 

Commission (FCC) currently suggests for single 

usage a range of 0.7 Mbps for “standard 

steaming videos” to 4 Mbps for “HD-quality 

streaming movie or university lecture.”

12 The 

FCC says 1-2 Mbps is adequate for up to three 

users performing “basic functions” (“email, web 

surfing, basic streaming video”), but if more 

persons are using basic functions plus one or 

more “high-demand applications” (i.e., 

“streaming HD, video conferencing, OR online 

gaming”) then as much as 15 Mbps or more 

may be needed.

13 Netflix recommends 

between 0.5 and 25 Mbps depending on the 

level of video picture definition.

14

 

At 10 Mbps, the typical person still is able to 

choose among two fixed ISPs. The typical 

person also has the option of choosing among 

three mobile ISPs. At even higher speeds, 

however, the number of providers drops off 

dramatically. For example, only 37 percent of 

the population had a choice of two or more 

providers at speeds of 25 Mbps or greater; only 

9 percent had three or more choices. 

Moreover, four out of ten Americans did not 

live where very-high-speed broadband service –

100 Mbps or greater – is available. Of those 

with access to broadband at this speed level, 

only 8 percent had access to two or more 

providers; 1 percent had access to three or 

more. Only 3 percent of the population had 1 

Gbps or greater available; none had two or 

more ISPs at that speed. 

The following section provides a brief overview 

of the ISP industry (Box 1) as well as additional 

detail of the degree of competition in the ISP 

industry. The Appendix describes the data and 

methodology used in this report, includes a 

table with a more complete set of estimates of 

competition, and provides definitions of the ISP 

technologies discussed in the report. The 

Appendix also discusses and reconciles recent 

FCC estimates of the degree of choice in ISPs 

that are lower than ours.
U. S. Department of Commerce, Office of the Chief Economist Page 3

Box 1: The Internet Service Provider Industry

The Internet service provider (ISP) industry is part of a larger ecosystem that produces, transmits, and consumes information 

via the Internet. Figure 1 is a schematic diagram of the interconnected networks that comprise the Internet. Content 

producers and consumers constitute “edge users” (depicted on the left and right sides of Figure 1).

i

 Consumers obtain access

to the Internet by subscribing to ISPs that connect consumers’ computers via “last mile” connections owned by ISPs. Edge 

users’ data are transmitted to and from their ISPs’ last mile connection points (point 4 in Figure 1) to “middle mile” networks 

(see point 3 in Figure 1) and then on to very high-capacity and high speed backbone networks owned by some larger ISPs and 

other companies (see point 2 in Figure 1), which together comprise the “core” of the Internet. Within this core, end users’ data 

are handed off from one network to another and ultimately to destination end users under interconnection arrangements. 

Such arrangements might be zero-price “peering” agreements if data flows are symmetric, or they might entail fees if data 

flows are asymmetric or a content provider pays for more direct (hence faster) interconnection. 

The focus of this report is depicted in the blue oval of Figure 1, which includes ISPs’ first mile connections between their 

subscribers and the middle mile of the Internet. The main categories of ISPs include: ii

Landline telephone companies, which provide broadband service primarily using two different technologies. The most widely 

available of the technologies is digital subscriber line (DSL), which was available to about 89 percent of the population in 2013 

but subscribed to by only 21 percent of households. The other technology, optical fiber, is much faster than DSL but very costly 

to install. It is available to 24 percent of the population but only 8 percent of households had subscriptions in 2013. 

Cable television companies provided Internet access to 43 percent of households, although it was available to 88 percent of 

the population. Cable ISPs use several different technologies, including copper co-axial lines (increasingly using software to 

increase speeds) and optical fiber.

Mobile wireless companies have increased the speed of the data services they provide. However, their ability to substitute for 

wireline ISPs is limited by congestion, transmission sensitivity to obstacles between the user and the cell tower, and constraints 

on the availability of the electromagnetic spectrum. These companies are sometimes owned by telephone companies that also 

offer wireline ISP services. Wireless broadband service (including fixed terrestrial service) was available to 99 percent of the 

population, while 56 percent of adults own a smartphone.

iii

In sum, while many different broadband service technologies exist, differences in congestion, reliability, and capacity 

constraints limit their substitutability– and these variations should be kept in mind when considering competition among ISPs in 

this report.

 

i

The distinction between “consumers” and “providers” is not clear. Consumers often produce content such as photographs, videos, and blogs 

and upload them to content producer websites and applications, such as Facebook or Tumblr, which utilize uploaded content. 

ii See the Appendix for more detailed definitions of broadband technologies other than dial-up and satellite. In this box, except where 

otherwise indicated, all estimates of the share of households that subscribed to an ISP using a particular technology are from File, Thom and 

Camille Ryan, “Computer and Internet Use in the United States: 2013,” American Community Survey Reports, ACS-28, U.S. Census Bureau,

Washington, DC, 2014 (http://www.census.gov/content/dam/Census/library/publications/2014/acs/acs-28.pdf, accessed November 14, 2014).

(Note that households may subscribe to more than one technology.) All estimates of the share of population for which the technology was 

available are from http://www.broadbandmap.gov/summarize/nationwide (accessed September 24, 2014). Two other fixed broadband service 

technologies each were used by 2 percent or less of households in 2011 and may be weak substitutes for wireline broadband service (National 

Telecommunications and Information Administration and Economics and Statistics Administration. Exploring the Digital Nation: America’s 

Emerging Online Experience. U.S. Department of Commerce. June 2013. Available at 

http://esa.doc.gov/sites/default/files/reports/documents/digitalnation-americasemergingonlineexperience.pdf.). Terrestrial fixed wireless 

service (classified under “other broadband services”) is often offered in rural areas where the average fixed cost per household of deploying 

wireline service is much higher than in more densely populated areas. Speeds are lower than for wireline services, costs per megabyte are 

generally higher (see Federal Communications Commission’s (FCC) 2010 report Connecting America: The National Broadband Plan

http://www.fcc.gov/national-broadband-plan, p. 37), and it requires a clear line-of-sight to obtain acceptable service. For these reasons, until 

recently, it has not been a close substitute for wireline Internet service, but some argue that may change (Eric Geier, “Meet WISP, the wireless 

future of Internet service” PC World http://www.pcworld.com/article/2067283/meet-wisp-the-wireless-future-of-internet-service.html

accessed September 29, 2014). Satellite broadband service has generally offered slower speeds with lower data caps and greater latency 

problems at higher prices than wireline broadband service; satellite ISP availability is not collected in the data used in this report. 

iii Kathryn Zickuhr and Aaron Smith, “Home Broadband 2013.” Pew Research Center. August 26, 2013. 

(http://www.pewinternet.org/2013/08/26/home-broadband-2013/ accessed September 25, 2014). 
Page 4 U. S. Department of Commerce, Office of the Chief Economist

The Current State of Competition 

among Broadband Service Providers

Overall

Both the fixed and mobile ISP sectors are highly 

concentrated. The five largest fixed ISP 

companies (excluding fixed terrestrial fixed 

wireless ISPs) serve over three-quarters of the 

84.3 million cable and telephone company fixed 

ISP customers.15 The four largest mobile ISPs

(Verizon Wireless, AT&T, Sprint Nextel, and TMobile together accounted for 92 percent of 

total industry revenues of $175 billion in 

201116). ISPs that provide fixed service are 

generally cable television and telephone 

companies, some of which also provide mobile 

Internet service (for example two of the largest 

wireline ISPs – Verizon and AT&T – are also two 

of the largest mobile ISPs).

These aggregate subscribership numbers, 

however, do not tell us the extent of

competition among ISPs in any given location or 

any given speed; this is done in the following 

subsection of the report.

At Home

Figures 2 and 3 show respectively the percent 

of U.S. population with various numbers of 

residential fixed and mobile ISPs available at 

different download speeds as of December 

2013. The estimates are shown for a wide 

range of download speeds due to the absence 

of a clear consensus about what speeds are 

adequate for various purposes and for multiple 

household members sharing an Internet 

Source: December 2013 National Telecommunications and Information Administration State Broadband Initiative dataset; 

Census Bureau’s 2010 Decennial Census; and author’s calculations.
U. S. Department of Commerce, Office of the Chief Economist Page 5

connection. We show separate estimates of the 

number of fixed and mobile provider choices 

available to residents because there is some 

debate over how substitutable mobile 

broadband service is for fixed service (see 

endnote 3).

For example, Figure 2 shows that at download 

speeds of 3 Mbps or greater, 98 percent of the 

population had at least one fixed ISP available 

(in other words, 2 percent had no ISP available); 

88 percent had two or more ISPs available; and 

56 percent had three or more ISPs from which 

to choose.

17

 

Figures 2 and 3 show that nearly all residents 

had fixed and mobile broadband service 

available at basic download speeds of 3 Mbps 

or greater, with nearly all having a choice of at 

least two ISPs (88 percent for fixed service and 

98 percent for mobile) and a majority of 

residents having three ISPs to choose from (56 

percent for fixed service and 85 percent for 

mobile service). A large majority of the 

population had at least two providers at speeds 

up to 10 Mbps or greater (70 percent for fixed 

and 90 percent for mobile), but far fewer had a 

choice of three or more providers (28 percent 

for fixed and 71 percent for mobile). 

However, at speeds of 25 Mbps or greater, 

mobile service was nearly nonexistent (only 3 

percent of the population had service at that 

speed). For fixed service, 86 percent had access 

to 25 Mbps or greater speeds, but only 37 

percent of persons had a choice of two or more 

fixed ISPs, and only 9 percent had a choice of 

three or more. While about 6 out of 10 persons 

had a fixed ISP available offering speeds of 100 

Mbps or greater, only 8 percent had two or 

Source: December 2013 National Telecommunications and Information Administration State Broadband Initiative dataset; 

Census Bureau’s 2010 Decennial Census; and author’s calculations.
Page 6 U. S. Department of Commerce, Office of the Chief Economist

more providers at those speeds, and 1 percent 

had three or more. Finally, only 3 percent of 

the population had fixed ISP service at speeds 

of 1 Gbps or greater available, and none had 

two or more providers at that speed. 

Broadband service with speeds of 1 Gbps or 

greater is available in only a handful of 

communities, in many cases provided by 

municipal utilities or Google. 18 

At speeds of 10 Mbps or greater, the typical 

(i.e., median) person had a choice of three 

mobile providers. At those speeds, the typical 

person also could choose from two fixed service 

providers (see Appendix Table 1), although in 

some cases mobile and fixed ISPs may be 

owned by the same company. 

Conclusion

Broadband download speeds up to 10 Mbps 

may be less than optimal for increasingly 

popular higher-bandwidth applications such as 

streaming video and audio and multi-player 

online games, especially in households with 

multiple simultaneous Internet users. This 

report shows that in December 2013, the 

typical person could choose between two fixed 

broadband providers at download speeds of 10 

Mbps. The typical person also has the option of 

choosing between three mobile broadband 

service providers at 10 Mbps. At even higher 

speeds, however, the number of providers 

drops off dramatically. For example, only 37 

percent of the population had a choice of two 

or more providers at speeds of 25 Mbps or 

greater; only 9 percent had three or more 

choices. Moreover, four out of ten Americans 

did not live where very-high-speed broadband 

service – 100 Mbps or greater – is available. Of 

those with access to broadband at this speed 

level, only 8 percent had access to two or more 

providers; 1 percent had access to three or 

more. Only 3 percent of the population had 1 

Gbps or greater available; none had two or 

more ISPs at that speed.

In sum, our report finds that broadband

competition across the U.S. varies by speed, 

with lower speeds seeing multiple providers but 

a dwindling in available ISPs with higher speeds. 

 

Endnotes

1

Another 48 percent profess a lack of need or 

interest in the Internet, while another 11 percent

cite having “no computer or computer inadequate”

which straddles the unaffordability/lack of interest 

reasons. National Telecommunications and 

Information Administration (NTIA). Exploring the 

Digital Nation: Embracing the Mobile Internet. U.S. 

Department of Commerce. October 2014. 

(Hereafter referred to as Digital Nation.) Available at 

http://www.ntia.doc.gov/files/ntia/publications/expl

oring_the_digital_nation_embracing_the_mobile_in

ternet_10162014.pdf.

2

See, for example, U.S. Department of Justice and 

Federal Trade Commission. Horizontal Merger 

Guidelines. August 19, 2010. 

http://www.justice.gov/atr/public/guidelines/hmg2010.pdf, accessed October 28, 2014. 

3

For example, see Robert E. Litan and Hal J. Singer. 

The Need for Speed: A New Framework for 

Telecommunications Policy for the 21st Century. 

Brookings Institution Press. 2013). Others suggest 

that mobile ISPs (some of which are owned by fixed 

ISPs) provide insufficient competition to check the 

market power of fixed ISPs offering high-speed 

service. For example, see Susan Crawford. Captive 

Audience: The Telecom Industry and Monopoly 

Power in the New Gilded Age. Yale University Press. 

2013). Some observers, such as Crawford, argue 

that mobile and fixed broadband services are 

“complements” in the sense that generally different 

tasks are used for each. As noted in a recent report 

by the Pew Research Center, “There is no 

widespread consensus as to whether 3G or 4G 

smartphones qualify as “broadband” speed, and 

many would question whether they offer the same 

utility to users as a dedicated home internet 

connection (activities such as updating a resume, 

filing taxes, or viewing educational content are 

certainly more challenging on a smartphone 

operating over a cell phone network, than on a 

broadband-connected home computer).” 

Furthermore, only 10 percent of adults have a 
U. S. Department of Commerce, Office of the Chief Economist Page 7

 

smartphone without a home broadband connection, 

compared to 46 percent with both a smartphone 

and a home broadband connection and 24 percent 

with only a home broadband connection, which 

suggests that using a smartphone as one’s sole 

Internet connection is relatively rare (Zickuhr and 

Smith, 2013). Another observer suggests that 

mobile broadband is not yet ready as a substitute for 

wireline mobile because new generation 

technologies that have greater capacity to provide 

broadband service have not been fully deployed and 

constraints on the supply of spectrum limits mobile 

providers’ ability to meet advertised speeds and 

reliability (Hal Singer, “Promoting Broadband 

Competition: Will Consumers Opt for Mobile-Only 

Broadband?” February 25, 2014. 

http://www.forbes.com/sites/halsinger/2014/02/25

/promoting-broadband-competition-will-consumersopt-for-mobile-only-broadband/ accessed October 6, 

2014). Finally, mobile service can be very expensive 

for downloading video, given the data charges and 

caps typical under many mobile plans.

4

Census blocks are the smallest areas for which the 

Census Bureau tabulates statistics in the Decennial 

Census. They are generally bounded by physical 

features or administrative borders. Census blocks 

are typically small in area, such as a single city block, 

but can be much larger in less densely populated 

areas, and can also have no residences (e.g., may 

only have workplaces). In the 2010 Decennial 

Census there were 11,078,297 Census blocks 

covering 308,745,538 persons in the United States 

(consisting of the 50 states and the District of 

Columbia for the purpose of this report). Sources: 

“2010 Census Tallies of Census Tracts, Block Groups 

& Blocks” 

https://www.census.gov/geo/reference/gtc/gtc_blo

ck.html; “United States Census 2010: Interactive 

Population Map” 

(https://www.census.gov/geo/mapsdata/data/tallies/tractblock.html); and “Geographic 

Terms and Concepts- Block” 

(http://www.census.gov/2010census/popmap/). All 

sources were accessed on October 30, 2014.

5

A different type of ISP market power may exist at 

the national level, in which ISPs may become large 

enough to compel large content providers to pay to 

connect to the ISP’s customers. Such agreements 

may lead ISPs to forge deals with content providers 

to offer exclusive packages of content to ISP 

 

customers. Because home users cannot practically 

be expected to subscribe to more than one ISP at a 

time, a user might be constrained by whatever 

special deals her current ISP has struck with the ISP’s 

preferred content providers. (See, for example, 

Crawford 2013.)

6

The Appendix provides a list and definitions of fixed 

and mobile broadband service technologies covered 

in this report as well as the data sets and 

methodology used in this report. It also contains 

tables showing the full set of results for this study. 

The broadband availability data used in this report 

does not include satellite service, nor does it include 

data on the availability of dial-up Internet service.

7

This report cites speed tiers adopted by NTIA when 

it undertook to develop the State Broadband 

Initiative data in 2009. The following year, the FCC’s 

Connecting America report defined basic broadband 

service as 4 Mbps download and 1 Mbps upload, an 

increase from its previous download threshold of 

768 Mbps (http://www.fcc.gov/national-broadbandplan). 

8

See, for example, Molly Wood, “TV Apps Are 

Soaring in Popularity, Report Says,” The New York 

Times, June 4, 2014 

(http://bits.blogs.nytimes.com/2014/06/04/reporttv-apps-are-soaring-in-popularity/ accessed 

September 28, 2014). Also Netflix “said in its 

earnings report it added 2.25 million customers to its 

U.S. streaming business during the quarter that 

ended in March ... for a total of 35.7 million. In 

international markets, its customer base reached 

12.7 million, a gain of 1.8 million during the quarter.“ 

(“Netflix to Raise Prices as Streaming Business 

Grows.” The New York Times April 21, 2014 

http://www.nytimes.com/reuters/2014/04/21/busin

ess/21reuters-netflix-results.html accessed 

September 28, 2014).

9

Cable companies such as Comcast have growing 

broadband and declining cable television 

subscribership: “High-Speed Internet Customers 

Increased by 203,000; The Best Second Quarter Net 

Additions in Six Years...Video Customer Net Losses 

Declined to 144,000; The Best Second Quarter Result 

in Six Years” (“Comcast Reports 2nd Quarter 2014 

Results” July 22, 2014. 

http://cmcsk.com/releasedetail.cfm?ReleaseID=861

091 accessed September 28, 2014).

10 Federal Communications Commission Chairman 

Tom Wheeler recently noted in a speech that “a 25 
Page 8 U. S. Department of Commerce, Office of the Chief Economist

 

Mbps connection is fast becoming ‘table stakes’ in 

21st century communications.” (“The Facts and 

Future of Broadband Competition” 1776 

Headquarters, Washington, DC, September 4, 2014 

available at 

https://apps.fcc.gov/edocs_public/attachmatch/DO

C-329161A1.pdf). The FCC is considering an increase 

in its threshold for defining broadband speeds from 

the current 4 Mbps download to 10 Mbps or more to 

reflect today’s bandwidth requirements. The FCC’s 

Tenth Broadband Progress Notice of Inquiry solicits 

public comment on a modern definition of 

broadband, including both download and upload 

speeds and methods of measurement (e.g., 

maximum advertised vs. actual). See 

https://apps.fcc.gov/edocs_public/attachmatch/FCC

-14-113A1.pdf (accessed October 20, 2014).

11 See 

http://www.broadbandmap.gov/classroom/speed

(accessed October 3, 2014). These download times 

are reported solely to illustrate what different 

download speeds imply for quality of service; 

although many customers with high-speed 

broadband service stream videos, many customers 

download videos to their computers and tablets and 

view them later (see, for example, Ben Fritz, “Sales 

of Digital Movies Surge: Delaying Availability of 

DVDs, Rentals Nudged Consumers”, Wall Street

Journal, January 7, 2014 

(http://online.wsj.com/articles/SB100014240527023

04887104579306440621142958 accessed November 

13, 2014).

12 See Federal Communications Commission 

“Broadband Speed Guide” 

http://www.fcc.gov/guides/broadband-speed-guide

(accessed October 28, 2014). 

13 See Federal Communications Commission 

“Household Broadband Guide” 

(http://www.fcc.gov/guides/household-broadbandguide accessed October 28, 2014).

14 See Netflix “Internet Connection Speed 

Recommendations” 

(https://help.netflix.com/en/node/306 accessed 

October 28, 2014).

15 Source: Leichtman Research Group 

(http://www.leichtmanresearch.com/research.html)

This estimate does not reflect the results of any 

announced but not yet approved mergers.

16 Federal Communications Commission. 16th 

Mobile Competition Report, p. 54

 

(https://apps.fcc.gov/edocs_public/attachmatch/FC

C-13-34A1.pdf accessed September 28, 2014).

17 While the data on broadband speed availability is 

actually based on maximum advertised download 

speeds, in fact advertised and actual fixed 

broadband download speeds are often quite close. 

Federal Communications Commission. Measuring 

Broadband America – 2014: A Report on Consumer 

Wireline Broadband

Performance in the U.S. 

http://www.fcc.gov/reports/measuring-broadbandamerica-2014#Findings, accessed September 23, 

2014. In contrast, evidence is sometimes mixed on 

how close are advertised and actual mobile 

broadband speeds. For example, one observer 

asserts that “Verizon claims peak speeds of around 

25 Mbps [for post-third generation service], and 

average speeds of around half that” (see Crawford 

2013) while some tests indicate that Verizon offers 

median actual download speeds that are about 99 

percent of advertised speeds. See 

http://www.speedtest.net/isp/verizon-wireless

(accessed October 14, 2014). Ookla 

(www.ookla.com) describes itself as “the global 

leader in broadband testing.”

18 For example, see Dominic Rushe, “Chattanooga’s 

Gig: How One City’s Super-Fast Internet is Driving a 

Tech Boom,” The Guardian 

(http://www.theguardian.com/world/2014/aug/30/

chattanooga-gig-high-speed-internet-tech-boom

accessed November 13, 2014). 
Technical Appendix

U. S. Department of Commerce, Office of the Chief Economist Page 9

Data and Methodology

This report uses data from the December, 2013 National Telecommunications and Information 

Administration’s (NTIA) State Broadband Initiative (SBI) dataset and the Census Bureau’s 2010 Decennial 

Census Summary Files, which are described in David Beede and Anne Neville, “Broadband Availability in 

the Workplace” National Telecommunications and Information Administration and Economics and 

Statistics Administration, Broadband Brief No. 3 (November 2013). A new feature of the December 31, 

2013 SBI dataset is that it has nearly complete (covering 90.5 percent of the population) information 

about the class of end-user served by wireline ISPs: residences only, businesses only, or both. (Mobile 

service is assumed to be offered to both residences and businesses.) 

These two datasets were merged by Census block to obtain the following data for each block:

 2010 population

 ISP identification numbers

 Maximum advertised download speed level offered by each ISP in that block

 Technology used by each ISP in that block

 The class of end-user served by the ISP in that block 

To understand how the estimates in Figures 2 and 3 (and the more complete set of estimates in 

Appendix Table 1) were developed, the steps for calculating a particular number are outlined below. For 

example, in order to obtain the percent of population with two or more fixed technology ISP providers 

offering speeds of 10 Mbps or greater (37.3 percent), the following was done:

 For each Census block, the number of fixed technology providers offering speeds of 10 Mbps or 

greater to residences was counted.

 The population for the subset of Census blocks with two or more such ISPs was summed.

 The total subpopulation in the preceding step was divided by total US population and the result 

multiplied by 100 to arrive at the share of the population with two or more fixed technology ISP 

providers offering speeds of 10 Mbps or greater.

The preceding list of steps was repeated for each combination of 

 Maximum speed level (there were 9 different speed levels ranging from 0.768 megabit per 

second to 1,000 megabits – i.e., 1 gigabit – per second)

 Technology class (fixed or mobile)

 End-user class (residence or business)

 Number of ISPs offering service (zero providers, one or more providers, two or more providers, 

or three or more or more providers)

To reach the estimates in Figures 2 and 3, it was assumed that mobile and terrestrial fixed wireless ISP 

service is available to all consumers and businesses, and that all wireline (i.e., fixed excluding terrestrial 

fixed wireless) ISPs with missing end-user class information served residences. In contrast, treating all 

the fixed ISPs with unknown end-user class as not serving residences reduces the population shares with 

various levels of competition by roughly five percentage points (both sets of estimates are shown for 

mobile and fixed technologies in Appendix Table 1). We also show estimates for wireless (i.e., mobile 

plus terrestrial fixed wireless) and wireline technologies in Appendix Table 2.
Technical Appendix

Page 10 U. S. Department of Commerce, Office of the Chief Economist

Note that the results reported in the main body of this report combined wireline broadband service ISPs 

with terrestrial fixed wireless ISPs to examine competition among fixed ISPs because NTIA suggested 

that fixed terrestrial wireless service was more of a substitute for wireline than for mobile service. In a 

recent speech (“The Facts and Future of Broadband Competition” 1776 Headquarters, Washington, DC, 

September 4, 2014 available at https://apps.fcc.gov/edocs_public/attachmatch/DOC-329161A1.pdf), 

FCC Chairman Tom Wheeler reported estimates on wireline (i.e., not including fixed terrestrial wireless) 

broadband service competition at download speeds of 25 Mbps or greater, based on similar data used in 

this (ESA’s) report. The FCC estimates show less competition than the results we report in Figure 2 and 

the middle panel of Appendix Table 1 for fixed ISPs (in which we assume ISPs with missing end-user class 

information served residences). The main reason for the different estimates is the inclusion or exclusion 

of fixed terrestrial wireless. However, the FCC estimates are within one percentage point of ESA’s

estimates of wireline competition shown in the bottem panel of Appendix Table 2 (assuming ISPs with 

missing end-user class information do not serve residences). These remaining differences are due to the 

fact that ESA looked at population shares and did not take upload speeds into account, while the FCC 

looked at housing unit shares and did take upload speeds into account. All this is summarized in the 

following table:

Competition Estimates at Download Speeds of 25 Mbps or Greater

(in percents of population or housing units)

ESA

(Figure 2 and 

Middle Panel of 

Appendix Table 1)

ESA

(Bottom Panel of 

Appendix Table 2) FCC

No ISPs 14.1 20.0 19.4

One or more ISP 85.6 80.0 80.6

Two or more ISPs 37.3 26.3 25.3

Three or more ISPs 8.7 2.5 2.4

Main Difference in 

Methodology

Fixed ISP technologies 

(includes fixed 

terrestrial wireless 

service)

Wireline ISP technologies 

(does not include fixed 

terrestrial wireless 

service)

Wireline ISP 

technologies (does not 

include fixed terrestrial 

wireless service)

Minor Differences in 

Methodology

 Looks at percent of population

 Does not take upload speeds into account

 Looks at percent of 

housing units.

 Takes upload 

speeds into 

account (3 Mbps or 

greater)

 
Technical Appendix

U. S. Department of Commerce, Office of the Chief Economist Page 11

Appendix Table 1

December 2013 Population Shares by Numbers of Available Mobile and Fixed Broadband 

Providers By Maximum Available Advertised Download Speeds in Mbps*

(in percents)

Number of 

Residential 

Service 

Providers

Greater 

than or 

equal to 

0.768 

Mbps

Greater 

than or 

equal to 

1.5 Mbps

Greater 

than or 

equal to 

3 Mbps

Greater 

than or 

equal to 

6 Mbps

Greater 

than or 

equal to 

10 Mbps

Greater 

than or 

equal to 

25 Mbps

Greater 

than or 

equal to 

50 Mbps

Greater 

than or 

equal to 

100 

Mbps

Greater 

than or 

equal to 

1,000 

Mbps

Mobile Service

None 0.2 0.2 0.4 0.9 1.0 96.9 97.0 97.0 100.0

>=1 99.8 99.8 99.6 99.1 99.0 3.1 3.0 3.0 0

>=2 99.2 98.5 97.6 92.0 89.9 0 0 0 0

>=3 94.6 87.8 85.4 80.6 71.2 0 0 0 0

Median 5 4 4 4 3 0 0 0 0

Fixed Service: Residential Service Providers (including providers with unspecified end user categories)

None 1.5 1.8 2.4 3.7 5.8 14.1 17.3 40.6 97.4

>=1 98.5 98.2 97.6 96.3 94.2 85.9 82.7 59.4 2.6

>=2 92.5 91.4 88.3 80.5 70.1 37.3 23.8 7.7 0.2

>=3 62.8 60.8 56.2 44.0 28.0 8.7 4.3 0.9 0.1

Median 3 3 2 2 2 1 1 1 0

Fixed Service: Residential Service Providers (excluding providers with unspecified end user categories)

None 4.6 5.0 5.7 7.2 9.3 18.3 21.5 44.0 97.8

>=1 95.4 95.0 94.3 92.8 90.7 81.7 78.5 56.0 2.2

>=2 87.4 86.4 83.5 76.2 66.2 35.0 21.8 7.2 <0.05

>=3 57.1 55.2 51.2 40.9 25.8 8.0 3.8 0.7 0

Median 3 3 3 2 2 1 1 1 0

*Megabits per second.

Sources: December 2013 National Telecommunications and Information Administration’s State Broadband Initiative dataset, the Census 

Bureau’s 2010 Decennial Census Summary Files, and ESA calculations.

Appendix Table 2

December 2013 Population Shares by Numbers of Available Wireless and Wireline Broadband 

Providers By Maximum Available Advertised Download Speeds in Mbps*

(in percents)

Number of 

Residential 

Service 

Providers

Greater 

than or 

equal to 

0.768 

Mbps

Greater 

than or 

equal to 

1.5 Mbps

Greater 

than or 

equal to 

3 Mbps

Greater 

than or 

equal to 

6 Mbps

Greater 

than or 

equal to 

10 Mbps

Greater 

than or 

equal to 

25 Mbps

Greater 

than or 

equal to 

50 Mbps

Greater 

than or 

equal to 

100 

Mbps

Greater 

than or 

equal to 

1,000 

Mbps

Wireless Technologies*

None 0.1 0.2 0.3 0.7 0.9 82.0 89.5 92.1 99.9

>=1 99.9 99.8 99.7 99.3 99.1 18.0 10.5 7.9 0.1

>=2 99.5 99.1 98.5 94.2 90.8 2.8 1.1 0.3 0

>=3 96.8 93.0 90.6 84.5 74.6 0.7 0 0 0

Median 5 5 4 4 3 0 0 0 0

Wireline Technologies: Residential Service Providers (including unknown end users)

None 3.5 3.9 4.7 5.9 7.5 15.8 17.9 41.1 97.5

>=1 96.5 96.2 95.3 94.1 92.5 84.2 82.1 58.9 2.5

>=2 86.0 84.6 79.8 71.5 63.0 28.7 18.8 3.7 0.2

>=3 27.6 27.0 24.6 17.7 12.4 3.2 1.7 0.3 0.1

Median 2 2 2 2 2 1 1 1 0

Wireline Technologies: Residential Service Providers (omitting unknown end users)

None 8.2 8.5 9.3 10.5 12.0 20.0 22.0 44.5 97.8

>=1 91.8 91.5 90.7 89.5 88.0 80.0 78.0 55.5 2.2

>=2 80.3 78.9 74.6 67.0 59.2 26.3 16.8 3.2 <0.1

>=3 21.8 21.3 19.5 14.8 10.6 2.5 1.3 0.1 <0.0001

Median 2 2 2 2 2 1 1 1 0

*Megabits per second.

Sources: December 2013 National Telecommunications and Information Administration’s State Broadband Initiative dataset, the Census 

Bureau’s 2010 Decennial Census Summary Files, and ESA calculations.
Technical Appendix

Page 12 U. S. Department of Commerce, Office of the Chief Economist

Appendix Table 3

Broadband Service Technologies Covered in this Report19

Technology Fixed20

or 

Mobile

Wireline 

or 

Wireless

Definition

Asymmetric 

xDSL 

Fixed Wireline Digital Subscriber Line (DSL) is a fixed wireline 

transmission technology that transmits data over 

traditional copper telephone lines to homes and 

businesses (using separate lines to carry voice traffic). 

Users are able to connect to the high-speed Internet via a 

modem without disrupting their telephone service. DSL is 

the technology most commonly used by local telephone 

companies to provide high-speed data services. 

Asymmetric DSL, used primarily by residential consumers, 

typically provides faster download speed for receiving 

data than upstream speed for sending data. This means 

that it may be faster to download webpages, data or 

media than it would be to upload this information. 

Transmission capacity declines with length of wire, so it 

requires signal boosting, which is costly. But new DSL 

technologies (e.g., hybrid copper-fiber loops and VDSL) 

may close the gap between wireline telephone company 

and cable company speed offerings

Symmetric xDSL Fixed Wireline Symmetric DSL is intended to provide equal speed for 

uploading and downloading data. This arrangement is 

standard for businesses that move large files among 

various users and between multiple sources.

Other Copper 

Wireline 

Fixed Wireline These are other technologies that use phone lines to 

transmit data. Examples include T-1 and ISDN lines.

Optical Carrier -

Fiber to the End 

User

Fixed Wireline This refers to a fiber-optic-based broadband network. 

Fiber optic technology converts electrical signals carrying 

data to light and then sends the light through transparent 

glass fibers about the diameter of a human hair. Fiber has 

the capacity to transmit data at speeds surpassing any 

other broadband technology.

Cable Modem -

DOCSIS 3.0

Fixed Wireline Cable modem service enables high-speed Internet access 

using the same cable television infrastructure, including 

coaxial cables, which deliver cable TV programming and 

Internet service on separate lines. Users can access the 

Internet without disrupting cable TV service. "DOCSIS 3.0" 

refers to Data Over Cable Service Interface Specifications. 

It is the current technological standard for cable modems 

and offers faster broadband service than older standards.

Cable Modem –

Other 

Fixed Wireline Cable modem service which utilizes versions of DOCSIS 

(Data Over Cable Service Interface Specifications) other 

than the current standard, DOCSIS 3.0.
Technical Appendix

U. S. Department of Commerce, Office of the Chief Economist Page 13

Appendix Table 3

Broadband Service Technologies Covered in this Report19

Technology Fixed20

or 

Mobile

Wireline 

or 

Wireless

Definition

Terrestrial Fixed 

Wireless –

Unlicensed 

Fixed Wireless This technology enables wireless broadband service to a 

specific geographic location using spectrum that is shared 

among Internet service providers. This wireless service 

includes WiFi and other similar technologies such as

WiMAX (Worldwide Interoperabililty for Microwave 

Access). This technology requires unimpeded line of sight 

for transmission of data.

Terrestrial Fixed 

Wireless –

Licensed 

Fixed Wireless This technology is similar to unlicensed Terrestrial Fixed 

Wireless except that it uses spectrum licensed to the 

Internet service provider. 

Terrestrial 

Mobile Wireless 

– Licensed 

Mobile Wireless This technology enables wireless broadband services in a 

specific geographic location using spectrum that is 

dedicated to an Internet service provider and targeted for 

mobile use by consumers within the area. This wireless 

service is generally offered by cellular phone providers, 

and includes technologies such as LTE, mobile WiMAX, 

CDMA2000 (EVDO), and UMTS (HSPA). It is constrained in 

providing high-speed broadband service by limited 

spectrum availability and congestion.

 

19 This table quotes extensively from National Broadband Map. “Broadband Classroom: Technology” and also uses 

information from Jonathan E. Neuchterlein and Philip J. Weiser (2013) Digital Crossroads: Telecommunications 

Law and Policy in the Internet Age, 2nd ed. MIT Press. 

20 Note that dial-up and satellite are fixed Internet services that are not included in data used in this report.
Acknowledgements

The author would like to thank the following for their comments and suggestions. Any remaining errors 

are the responsibility of the author.

U.S./Department of Commerce

Economics and Statistics Administration

Office of the Chief Economist

 Sue Helper, Chief Economist

 Robert Rubinovitz, Deputy Chief Economist

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Economics and Statistics Administration

Office of the Chief of Staff

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Policy

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Analysis and Development

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Director of Internet Policy, Office of Policy Analysis 

and Development

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Applications

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for Telecommunications

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Economic Policy (also at the National Economic 

Council)

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for Economic Analysis

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