Telecommunications: Characteristics and Choices of Internet Users
Published: 2001-02-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Americans' use of the Internet has grown dramatically during the last few years. Nationally, more than half of all households have a computer and more than 80 percent of those households have access to the Internet. Yet, during the last few years, even as Internet usage has continued to expand, concerns have arisen about whether access to the Internet and other advanced telecommunications services is limited for Americans in lower socioeconomic classes or who live in rural areas.
section_title: What GAO Found
paragraphs: GAO found that Internet users are more likely to be white and well-educated and have higher-than-average household incomes. There is no noticeable difference between the genders when it comes to Internet usage. GAO also found that the availability of some services is limited by location. Some of this information points to the existence of the "digital divide," but the evidence is not clear. It is important, however, to ensure that the differences in Internet availability do not adversely affect existing societal divisions.

section_title: Letter
paragraphs: Americans’ use of the Internet has grown dramatically in the past few  years. Today, there are well over 100 million Americans online. Nationally,  more than half of all households have a computer and over 80 percent of  those households have access to the Internet. A small but growing  percentage of online households have a “broadband” connection to the  Internet—a high-speed, high-capacity connection that provides better  access to sophisticated forms of Internet content, such as streaming video.  Yet during the past few years, even as Internet usage has continued to  expand, concerns have arisen about whether a “digital divide” is occurring  in America—that is, whether access to the Internet and other advanced  telecommunications services is limited for Americans in lower  socioeconomic classes or who live in rural areas. These concerns have  arisen because the Internet offers Americans a gateway to a vast array of  content and applications, and is expected to become a primary medium for  communications, commerce, education, and entertainment in the 21st  century.
The Department of Commerce has studied and reported on consumers’ use  of the Internet, while the Federal Communications Commission (FCC) has  monitored and reported on the deployment of broadband services. To  respond to your concerns about the possible emergence of a digital divide  as well as your ongoing interest in telecommunications issues, we surveyed  Internet users to gain a deeper understanding of issues related to Internet  usage—such as which Internet access methods Internet users thought were  available to them, why users chose their providers, and how various  applications (e.g., e-mail) and content (i.e., information sources or Web  pages) available from their Internet service provider (ISP) or on the  Internet were used. This information can aid understanding of how  advanced telecommunications services are being deployed throughout the  United States. As agreed with your office, we examined (1) the  demographic characteristics of Internet users compared with those of the  general U.S. population, (2) the characteristics of areas where broadband  Internet transport is available and of consumers who selected a broadband  transport provider, and (3) the factors influencing consumers’ choice of an  ISP and how consumers rate the importance of content and applications  offered by their ISP or over the Internet.
Because we were primarily interested in the choices made by those with  access to the Internet, we surveyed current Internet users only.  Specifically, we contracted with a market research firm to sample a panel  of Internet users over the Internet. The firm sampled two groups of Internet  users: (1) a group intended to be representative of the U.S. Internet-user  population and (2) a group living in geographic areas that we believed had  at least one broadband option available. In both instances, survey  participants were 18 years and older. Because we sampled a panel of  Internet users, the survey results presented in this report are estimates of  the population values for that panel. Throughout this report, all references  to “Internet users” denote members of that panel of Internet users. Since  panel members were volunteers, they may represent a set of users that is  somewhat more sophisticated than the general Internet-user population.
Unless otherwise noted, the survey results presented in this report are from  the group intended to be representative of the U.S. Internet-user  population. Demographic information about respondents was provided by  the market research firm and was compared with Census Bureau data.  Unless otherwise indicated in the text, the sampling error is plus or minus  no more than 5 percentage points. Also, unless otherwise noted, all survey  results are statistically significant at the 95-percent confidence level and  refer to home Internet usage. The percentages from our survey are  rounded to the nearest whole number. See appendix I for more detailed  information about our research methods.
subsections: section_title: Background
paragraphs: To reach the Internet, a consumer needs service from two types of  providers: (1) a communications company (i.e., a telephone, cable  television, or wireless company) providing a transport service to physically  transmit data to and from the consumer’s home and (2) an ISP (e.g.,  America Online or EarthLink) providing access to the Internet. Usually,  consumers buy these services separately, but some providers (particularly  cable companies) sell transport and ISP services as an integrated package.  Some wireless providers also offer an integrated ISP as part of their  Internet transport services.
Different transport providers, depending on the physical makeup of their  network, can supply different amounts of “bandwidth,” or data  transmission capacity. A “narrowband” connection, such as that provided  by a conventional telephone line, offers limited capacity resulting in  relatively slow rates of data transmission. A “broadband” connection, such  as that provided by cable modem service or by a telephone technology  known as digital subscriber line (DSL), has greater capacity, giving the user  faster data transmission rates and better access to sophisticated,  “bandwidth-intensive” content. While many Internet users enjoy fast  Internet transport at their place of work or school, no substantial  commercial deployment of broadband connections to homes took place  until the late 1990s. To date, the two most widely used broadband  technologies in homes are cable modem service and DSL. Increased  deployment of and subscription to competing broadband transport  methods, such as satellite, terrestrial wireless, and optical fiber  technologies, is expected in the future.
An ISP is the consumer’s “on-ramp” to the Internet, and once connected to  the ISP, the consumer actually becomes part of the Internet. ISPs have  routers, switches, and other equipment necessary to transmit traffic to and  from the long-haul networks—known as the Internet “backbone”—which  connect the computers and communications networks that are part of the  Internet. ISPs differ in the features and functions they offer to  subscribers. While some only provide access to the Internet and an e-mail  application, others offer a “home page” with direct links to specific  content on the Internet, as well as proprietary content and additional  applications available only to the ISP’s subscribers.
Through section 706 of the Telecommunications Act of 1996, the Congress  directed the FCC and the state commissions to “encourage the deployment  on a reasonable and timely basis of advanced telecommunications  capability to all Americans….” In its most recent report on the  deployment of advanced telecommunications capability (released in  August 2000), FCC identified certain categories of Americans who may  have difficulty obtaining access to advanced services. These categories  include low-income consumers, those living in sparsely populated areas,  minority consumers, Native Americans, persons with disabilities, and those  living in U.S. territories. In particular, FCC concluded that several barriers  might hinder the ability of low-income, inner-city residents to obtain  advanced services. Such barriers include the poor quality of the  telecommunications plant or of the inside wiring in multiple-tenant  buildings, the relatively high price of advanced services, the lower rates of  computer ownership among inner-city residents, and the lack of marketing  by providers of advanced services to low-income populations. FCC also  found that for the majority of Americans who live in rural areas, lowest- cost access to advanced services was not readily available, and that some  rural areas still lacked basic access to the Internet through a local  telephone call.
Similarly, the Department of Commerce stated in a recent report that  although a sharp upward trend in the number of Americans connecting to  the Internet from their homes exists (a trend Commerce found to  encompass every income category, education level, racial group, and family  type and to include both urban and rural areas), some demographic groups  are nevertheless still connecting to the Internet far less than others.  However, Commerce pointed out that there was a higher expansion rate of  Internet use among these “lower usage” groups. Over time, this suggests  that the digital divide may narrow.
section_title: Significant Demographic Differences Exist Between Internet Users and the General U.S. Population
paragraphs: Much attention has been directed recently to the question of whether a  “digital divide” is occurring in our country—that is, whether Internet  access is unevenly distributed across socioeconomic divisions within our  society. Our survey results support the perception that access to and use of  the Internet are influenced by a person’s race, education, and income level.  Geographically, however, we did not find that Internet use—when both  narrowband and broadband users were measured together—was related to  a person’s residence in a small or large metropolitan area or rural area.
subsections: section_title: Internet Users Were More Likely to Be White, Well- Educated, and Have a Higher-Than-Average Household Income
paragraphs: One of the most important statistical findings of our survey was that  Internet users tended to have a higher household income and more  education than the general U.S. population. For example, Internet users  were more likely than the general population to be in a household with an  income of $35,000 or more per year (see fig. 2). Internet users over the age  of 24 were also significantly more likely to be college graduates or to have a  graduate degree than the general population. Additionally, our survey  found that Internet users, compared with the general U.S. population,  represented a higher percentage of whites and a lower percentage of  African-Americans and Hispanics.
Other demographic findings from our survey include the following:  The proportion of men and women online mirrored that of the general  population. Surveys from just a few years ago, however, showed women  lagging behind men in Internet usage. Thus, our survey suggests that  women have caught up in their use of Internet technology and are now  just as likely to be online as men.
Compared with the percentage of the general population in various age  categories, users who accessed the Internet from home were more likely  to be between 25 and 54 years old and less likely to be aged 55 and older.
section_title: Internet Usage Rates Were Similar in Urban Areas and Rural Areas
paragraphs: Another concern embodied in the digital divide concept is that people  living in rural areas might have less access to the Internet than their more  urban counterparts. Our analysis considered Internet use in five types of  geographic areas across the United States: nonmetropolitan areas (areas  with populations of less than 50,000) and four categories of metropolitan  statistical areas (MSA), the largest of which included populations of 2.5  million or more. We found the proportion of Internet users living in each  type of geographic area to approximate the breakdown of the overall U.S.  population across these areas. This implies that people living in less  populated areas are just as likely to obtain some form of Internet access as  those in more populated areas. This analysis, however, was based on  whether users obtained any form of Internet access—narrowband or  broadband. Special concerns surround the issue of whether deployment of  broadband in rural areas will match that in urban areas. This issue is  addressed in the section below.
section_title: Broadband Transport Via DSL and Cable Modem Was Most Prevalent in Large Metropolitan Areas and Wealthy Areas
paragraphs: Our survey of Internet users found that 12 percent of the respondents had a  broadband connection to the Internet. At the same time, over 52 percent of  the survey respondents reported that broadband transport via DSL or cable  modem was available to them. The reported availability of broadband,  however, was uneven across local areas and was greatest in large  metropolitan markets and in wealthy areas. Regardless of these geographic  differences, narrowband and broadband subscribers shared many  demographic characteristics. The reasoning behind their choice of an  Internet transport provider often differed, however.
subsections: section_title: Approximately 12 Percent of Internet Users Subscribed to Broadband Transport to the Internet
paragraphs: We found that 12 percent of the respondents had a broadband method of  transport to the Internet—9 percent used a cable modem and 3 percent  used DSL. The conventional telephone line was still the most common  method of transport to the Internet, with about 88 percent of respondents  using narrowband telephone transport. Figure 3 presents the distribution  of the means of physical transport to the Internet based on our survey  results. Although the vast majority of Internet users still rely on  narrowband transport, there has been substantial growth in broadband  usage. This point is illustrated by reports from two financial services firms,  showing that as recently as 1998 only about 2 percent of Internet users  subscribed to a broadband service.
section_title: Broadband Technology Was More Prevalent in Large Metropolitan Areas and Wealthy Areas
paragraphs: Section 706 of the Telecommunications Act of 1996 directs FCC to initiate  regular inquiries into the availability of advanced services (which include,  but are not limited to, broadband Internet transport) to all Americans. In its  most recent section 706 report, FCC gathered data from companies  providing high-speed service lines and conducted case studies to examine  the deployment and use of advanced services in different communities.  FCC generally found significant investment in the facilities needed to  provide advanced services, steadily rising subscription rates for advanced  services, and a proliferation of providers in the marketplace. However,  FCC stated that less than 20 percent of sparsely populated areas had high- speed subscribers and concluded that many rural Americans are  “particularly vulnerable to untimely access to advanced services if left to  market forces alone.” Likewise, the Commerce Department, which based  its report on a survey of U.S. households, found the percentages of Internet  users with a broadband transport method to be 12.2 percent in central  cities and 11.8 percent in urban areas, but only 7.3 percent in rural areas.
To further gauge the level of broadband deployment, we asked current  Internet users about the availability of DSL and cable modem services  where they live. Among all survey respondents, 52 percent reported that  one or more broadband service was available to them: 17 percent reported  that only cable modem service was offered, 10 percent reported that only  DSL service was available, and 25 percent reported that they could choose  from both cable modem and DSL services (see fig. 4). This slightly greater  prevalence of cable modem services accords with the findings of FCC and  the Commerce Department, both of which found cable to have a greater  market share than DSL at this time.
To determine whether the availability of broadband varies by community  size, we examined the relationship between the population of the area  where respondents live and whether they reported that DSL and cable  modem services were obtainable. Similar to the other studies, our survey  found the availability of broadband technology to be most prevalent in  large metropolitan areas (see fig. 5). For example, more than 32 percent  of the survey respondents in a metropolitan area with a population of 2.5  million or more reported having both DSL and cable modem service  available where they lived. The corresponding figure for rural areas was  less than 8 percent.
While nationwide and metropolitan area-level data provide insights on  broadband deployment, additional insights can be gained by analyzing data  at a more localized level. To examine the characteristics of local areas  with and without broadband availability, we used Census Bureau  demographic data for areas designated by zip code. Within each zip code  we looked at several variables including income, poverty rates, home  values, and education levels. Using survey respondents’ answers to  whether DSL and cable modem services were available where they lived,  we examined whether these Census Bureau variables differed between zip  codes where users reported the availability or unavailability of broadband  transport services.
The data in table 1 suggest that residents of local areas where survey  respondents reported broadband service to be available were, on average,  wealthier than residents of local areas where survey respondents said  broadband service was unavailable. Specifically:  Median household income was higher where broadband service was  available than where it was unavailable. Local areas where both DSL  and cable modem service were available had an average median  household income approximately 28 percent higher than areas where  neither service was available.
Poverty rates were lower in local areas where both DSL and cable  modem service were available compared with local areas where neither  was available.
The average median home value was over 63 percent higher in local  areas where both DSL and cable modem services were available than  where neither was available.
Another notable characteristic of local areas where broadband service was  reported to be available was the educational level of the residents. As  shown in table 2, a larger percentage of the population had attained some  amount of postsecondary education in local areas where respondents said  broadband service was available. For example, 27 percent of people (aged  25 and older) in local areas where both DSL and cable modem service were  said to be available had a college or advanced degree, compared with 19  percent in areas where neither service was reported to be available.
section_title: Narrowband and Broadband Subscribers Shared Many Characteristics, Yet Differed in Their Reasoning for Selecting Transport Providers
paragraphs: Little difference existed in the demographic characteristics of survey  respondents subscribing to narrowband service compared with those  subscribing to broadband service. We found no differences in marital  status, household size, race, Hispanic origin, education, or employment,  between narrowband and broadband subscribers. However, we did find a  statistically significant difference with respect to income: 40 percent of  broadband subscribers had an annual household income of $75,000 or  more, compared with only 20 percent of narrowband users.
While narrowband and broadband subscribers shared many demographic  attributes, they differed in their reasons for selecting their method of  transport to the Internet. Among narrowband users, the most commonly  reported reason for selecting narrowband service—cited by 38 percent of  respondents—was its relatively low price. Survey respondents using  narrowband transport reported spending less for both one-time initial fees  and recurring monthly fees. For example, only 18 percent of narrowband  subscribers reported spending over $100 for one-time initial fees, whereas  39 percent of broadband subscribers reported spending this much for  initial installation and setup. The same pattern emerges for monthly fees  (see fig. 6). Among narrowband subscribers, less than 18 percent reported  spending more than $30 per month to access the Internet while the  corresponding figure for broadband subscribers was 74 percent. These  pricing patterns held consistent across geographic areas: the monthly fees  consumers encountered in rural areas, small metropolitan markets, and  large metropolitan markets were similar.
Although most narrowband users based their selection of transport  provider on price, many others were narrowband users by default—that is,  almost 29 percent of narrowband subscribers reported the lack of a  broadband alternative as their most important reason for choosing a  narrowband transport provider. In fact, 19 percent of narrowband Internet  users had made some attempt to obtain broadband service but were  unsuccessful, often because companies were unable to or had elected not  to provide broadband service in their area at that time. Additionally, 12  percent of narrowband respondents reported that they were unaware of  any choices other than a narrowband connection. Seven percent of  narrowband respondents stated that they chose a narrowband connection  so they would be able to choose their ISP; 6 percent said they chose  narrowband because it was the easiest type of connection to use.
Among broadband users, the most commonly reported reason for selecting  their transport mode—cited by 40 percent of these respondents—was  that the speed was appropriate for the services and applications they used  most frequently. An additional 18 percent of broadband respondents said  that they chose this kind of connection in order to free up their telephone  line, which is in use during a dial-up Internet session unless the consumer  purchases a second telephone line. Finally, 10 percent of broadband users  said they chose this type of connection because it was the most user- friendly.
section_title: Internet Users Most Often Consider Price and Content When Selecting an ISP and Rank E-Mail and Web Surfing as the Most Important Internet Applications
paragraphs: Just as Internet users often based their selection of transport provider on  price, they often based their selection of ISP on price. Broadband users,  however, were more likely to consider other factors, such as whether the  ISP offered the various content and applications that were important to  them. Once online, all users rated the importance of various Internet  features and applications roughly the same. Narrowband and broadband  users spent a similar amount of time accessing their ISP’s content  compared with surfing the Internet. However, we found that infrequent  users and new users tended to rely more on the content provided to them  by their ISP.
subsections: section_title: Most Narrowband Users Based Their ISP Selection on Price, Whereas Broadband Users Based Their Choice on a Variety of Factors
paragraphs: As the Internet industry continues to evolve, so does the role of the ISP. In  our prior report on Internet competition, we noted that many ISPs now  serve as “content aggregators”—that is, they provide subscribers with  applications, proprietary content, and direct links to content on the  Internet. Concerns have been raised about how ISPs choose the content  they offer subscribers—in particular, whether ISPs might favor material  from affiliated content providers or discriminate against unaffiliated  content providers. Consumer choice among ISPs is thus seen as important  to enhancing consumers’ access to varied content. In our survey, we  examined how Internet users selected their ISP and how they used the  services provided by their ISP.
In the case of narrowband users, the most common reason given for their  choice of ISP—cited by almost 35 percent of respondents—was price,  while only 13 percent of broadband users identified price as the most  important reason why they chose their particular ISP (see fig. 7). Among  broadband users, the most common answer to this question—cited by 23  percent of respondents—was that they selected their ISP because it was  the company that provided the features and applications of most interest to  them. Nearly 13 percent of broadband users reported that the most  important reason they chose their ISP was that they effectively had no  choice—the ISP came bundled with their transport provider. Among  survey respondents in areas where broadband service was thought to be  available, this response was the most frequent, cited by 24 percent of  broadband users.
Because of concerns that ISPs might influence or restrict consumers’  content choices, we asked users how much time they spent accessing  content available on their ISP’s Web site (or available through a direct link  from the ISP’s Web site) compared with the time they spent accessing  content that they searched for on the Internet. Overall, users reported  spending more time surfing the Internet for content or accessing sites  already familiar to them than accessing ISP-provided content. We found  that, on average, respondents spent 35 percent of their time online using  applications or content available from their ISP’s site. Narrowband users  spent slightly more time on their ISP’s site or accessing ISP-provided  content than broadband users—36 percent versus 29 percent—although  the difference was not statistically significant.
The amount of time users spent online was a more important determinant  of how long they spent on their ISP’s site. Users whose households were  online less than 10 hours per week (this included 18 percent of total  respondents) spent an average of almost 43 percent of their time  accessing their ISP’s content or linked content. However, for households  with usage of 40 hours or more per week (this included 13 percent of total  respondents), time spent on their ISP’s content dropped to 26 percent. For  respondents from areas where broadband service was thought to be  available, the number of years a respondent had been accessing the  Internet was another factor associated with the time spent on their ISP’s  site. For example, new users (those online for less than 2 years, which  constituted 18 percent of respondents) spent nearly 41 percent of their  time on their ISP’s site while long-term users (those online for 5 or more  years, which constituted 39 percent of respondents in this group) spent  only 30 percent of their time accessing content and applications on their  ISP’s site. Respondents to our survey said the biggest advantage to using  ISP-provided content was that it was readily available and, thus, easier to  use than content that required searching on the Internet.
section_title: Little Difference Between How Narrowband and Broadband Users Rate the Various Features and Applications Available Online
paragraphs: Both narrowband and broadband Internet users rated e-mail and Web  surfing as the most important applications available to them online, with 89  percent of users rating e-mail as “extremely important” or “very important,”  and 78 percent of users placing Web surfing in those categories (see fig. 8).  Almost 80 percent of users said chat rooms were “not that important” or  “not at all important,” and almost 70 percent said the same about posting  and maintaining a personal Web page. The results for e-commerce (such as  online shopping), an Internet application that receives considerable  attention, were mixed. Among all survey respondents, 22 percent said that  e-commerce was “extremely important” or “very important.” However, 39  percent of respondents said that e-commerce was “not that important” or  “not at all important.”
The general absence of appreciable differences in how broadband users  and narrowband users rated the features and applications available to them  online may illustrate that, at this time, both narrowband and broadband  subscribers are using the Internet in the same fashion, mostly for e-mail  and Web surfing. This is likely due to the fact that little broadband-specific  content is currently available. As more bandwidth-intensive content and  applications are introduced in the market, consumers may begin to  perceive narrowband and broadband Internet transport as distinct  products with different capabilities. In turn, broadband users may begin to  use the Internet in new and different ways.
section_title: Agency Comments
paragraphs: We provided a draft of this report to FCC and to the Department of  Commerce’s National Telecommunications and Information Administration  (NTIA) and Economics and Statistics Administration (ESA) for their review  and comment. NTIA and ESA provided written comments that are included  in appendix IV. Also, FCC, NTIA, and ESA officials provided technical  comments that were incorporated as appropriate.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 14 days after the  date of this letter. At that time we will provide copies to interested  congressional committees; the Honorable Michael K. Powell, Chairman,  Federal Communications Commission; the Honorable John F. Sopko,  Acting Assistant Secretary for Communications and Information,  Department of Commerce; James Lee Price, Acting Under Secretary for  Economic Affairs, Department of Commerce; and other interested parties.  We will also make copies available to others on request.
If you or your staff have any questions about this report, please contact me  at (202) 512-7631. Key contributors to this report are listed in appendix V.
section_title: Scope and Methodology
paragraphs: We conducted various statistical tests on the data from our survey of  Internet users (conducted in April and May 2000) and reviewed relevant  reports from the Federal Communications Commission (FCC) and the  Department of Commerce. In our survey, we asked questions about what  method of Internet transport consumers used, why consumers selected  their method of Internet transport, why they selected their Internet service  provider (ISP), what applications consumers believed were important, how  consumers used the Internet, what costs consumers incurred for Internet  services, and to what extent consumers found broadband Internet access  available and easy to purchase. Participants were notified about the survey  and responded to the survey over the Internet. We selected this approach,  rather than a traditional mail or telephone survey, because we sought  information only from current users of Internet services.
To provide the sample frame, draw the sample, and manage the survey  operations, we contracted with NPD Group, Inc. (NPD), a market research  firm. NPD maintains a panel of approximately 400,000 Internet users that is  intended to be representative of the Internet population. The panel consists  of Internet users who have volunteered to respond to surveys NPD  conducts for its clients over the Internet. Factors influencing the degree to  which the panel is deemed representative include demographic  information and usage patterns. We did not evaluate whether NPD’s panel  is representative of the Internet population.
We used information from existing documentary evidence and preliminary  interviews from our earlier report to develop the survey instrument. We  conducted two rounds of pretests. First, we conducted pretests in person  to assess whether the survey instrument was understandable and unbiased.  Second, the survey instrument was pretested by 34 randomly selected  members of NPD’s panel using NPD’s Internet-based application. This  allowed us to assess whether the performance of the online survey  instrument was acceptable and to further identify any unclear portions of  the survey and any potentially biased questions.
To detect any differences between users residing in areas where broadband  Internet access may be available and the general U.S. Internet population,  we asked NPD to draw two samples from its panel of Internet users. The  first sample frame was intended to be representative of the U.S. Internet  population, 18 years or older. The second sample frame was intended to be  representative of the U.S. Internet population, 18 years or older, who reside  in areas where broadband Internet access was likely to be available. NPD  developed this second sample frame using zip code information that we  had developed.
We used a three-step process to identify zip codes where broadband  Internet access was likely to be available. First, we consulted an industry  publication to get a preliminary list of geographic areas where cable  modem service was deployed. Second, we developed a list of zip codes  that corresponded to these geographic areas. We gathered the zip code  information from the U.S. Postal Service’s Web site and one additional  commercial Web site. Third, we checked the Web sites of cable companies  identified by the industry publication to confirm the geographic locations  where they provide cable modem service. We excluded all geographic  locations that we could not confirm as having cable modem service  available; we also added geographic locations to the list if the cable  company reported providing cable modem service in those areas. Because  broadband service is generally available on a neighborhood-by- neighborhood basis in a given geographic area, we probably included zip  codes where broadband service was not available to all consumers.  However, our approach did identify areas where broadband service was  available or was available in the immediate geographic area. NPD used the  final list to develop the second sample frame.
The survey was available to participants over an 18-day period (Apr. 21,  2000, through May 8, 2000) on NPD’s secure Web site. Participants were  notified by e-mail that a survey was available to be completed; they could  complete it any time during the period. At our request, NPD sent a follow- up e-mail to increase the response rate for both samples. For the first  sample, a total of 1,225 people were notified. A total of 604 people  responded to the survey (a 49.3-percent response rate). Of the respondents,  97 were excluded because they did not make the household’s primary  decisions about Internet access and therefore did not complete the entire  survey. Additionally, 11 observations were removed because the  respondent provided inconsistent answers to questions 2 and 4 (see app. II  for the questions in the survey). This left 496 complete responses (40.5  percent of the sample). For the second sample, 2,525 people were notified  of the survey. A total of 1,209 people responded to the survey (a 47.9- percent response rate). We excluded 409 responses (16.2 percent of the  sample) as recommended by NPD to ensure that the sample was  representative of the target population. Of the remaining respondents, 140  were excluded because they did not make the primary decisions about  Internet access and therefore did not complete the entire survey.  Additionally, 21 observations were removed because the respondent  provided inconsistent answers to questions 2 and 4 (see app. III for the  questions in the survey) or because the respondent was under 18 years old.  This left 639 complete responses (25.3 percent of the sample).
The sample frame determines the population to which we can generalize  the survey results. For the first sample, the sample frame was intended to  be representative of the U.S. Internet user population 18 years or older. The  second sample frame was intended to be representative of the U.S. Internet  user population, 18 years or older, who reside in areas where broadband  access was likely to be available. While demographic and usage patterns  for survey participants were intended to be representative of the U.S.  Internet user population, some biases might be present because  participants were volunteers.
Because we used a sample to develop the estimates of Internet  characteristics presented throughout this report, each estimate has a  measurable precision, or sampling error, that may be expressed as a plus or  minus figure. A sampling error indicates how closely we can reproduce  from a sample the results that we would obtain if we were to take a  complete count of the population we are analyzing using the same  measurement methods. By adding the sampling error to and subtracting it  from the estimate, we can develop upper and lower bounds for each  estimate. This range is called a confidence interval. Sampling errors and  confidence intervals are stated at a certain confidence level—in this case,  95 percent. For example, a confidence interval at the 95-percent confidence  level means that in 95 out of 100 instances, the sampling procedure used  would produce a confidence interval containing the universe value we are  estimating.
To assess the demographic characteristics of Internet users and of local  areas where broadband service was expected to be available, we relied on  a number of Census Bureau data sets. We compared the proportion of  Internet users in various categories of each demographic variable with the  proportion of the general population in the same categories using the most  recent Census Bureau data available. This permitted us to assess whether  Internet users were more or less prevalent in certain categories of  demographic variables than the general population. To assess the  demographic characteristics of local areas where broadband service was  reported to be available, we relied on Census Bureau zip code data. For  each respondent, NPD provided a corresponding zip code for the area  where the respondent lived. We gathered demographic data for each zip  code from the Census of Population and Housing, 1990: Summary Tape File  3B, Tables P57, P80A, P117, and H61A (the most recent data available). On  the basis of respondents’ answers about the availability of broadband  service, we made inferences about the demographic characteristics of local  areas with and without broadband service as indicated by Census Bureau  data at the zip code level.
section_title: Survey Results for Sample Intended to Be Representative of the U.S. Internet Population
paragraphs: The following tables show the questions included in our survey of Internet  users and the responses, by percentage of respondents.  For this sample,  we randomly surveyed 1,225 Internet users and received 604 responses (a  49.3-percent response rate).  Question 1—which asked whether the  respondent was the primary decisionmaker for Internet purchases in the  household—was asked of all survey participants.  Only those participants  who responded “Yes” to this question (507 participants) continued with the  remainder of the survey.  Additionally, 11 observations were removed  because the respondent provided inconsistent answers to questions 2 and  4.  This left 496 responses for questions 2 through 18.
For this sample, the sample frame—that is, the entire panel of potential  survey respondents—consisted of 389,593 individuals.  This is the  population to which the survey results can be generalized.  With a 49.3- percent response rate, our survey results can thus be interpreted as  estimates for the 192,096 potential individuals that we estimate would have  responded to our survey if we had contacted all individuals in the panel.   For questions 2 though 18, the relevant population estimate was 157,748  because observations from respondents who did not make the household’s  primary decisions about Internet purchases were excluded.
Unless otherwise noted in footnotes to the questions, there were no  missing observations.
Question 1: Are you the primary decisionmaker for your household  regarding what form of Internet access to purchase for your home?  (Select one)
Question 2: Which of the following do you most frequently use to  access the Internet from your home? (Select one)
Conventional dial-up telephone service provided by a telephone  company (this includes ISDN service)
High-speed “digital subscriber line” (or “DSL”) telephone service High-speed cable modem service (this includes using the cable modem  as the downlink and a telephone line for the return path or uplink)
Wireless service (for example, satellite service such as DirecPC, fixed  wireless service such as Winstar or Teligent, or other wireless service)
Question 3A: What is the most important reason you use  conventional dial-up telephone service for your Internet access  from home?
No choice; only method of Internet access available to me Not aware of other choices of Internet access Company’s service quality reputation and/or experience Most appropriate for the applications/services I use most frequently Ability to select the Internet service provider I wanted Other (Please specify)
Information based on respondents who indicated that they use conventional dial-up telephone service  in question 2.
Among “Other,” 0.9% of respondents reported free as the most important reason for selecting  conventional dial-up telephone service.
Question 3B: What is the most important reason you use (high- speed DSL service, high-speed cable modem service, or wireless  service) for your Internet access from your home? (Select one)
Company’s service quality reputation and/or experience Ability to select the Internet service provider I wanted Speed appropriate for the applications/services I use most frequently Speed equivalent to the access I have at work or at other locations where  I have Internet access To free up my regular telephone line for voice call Other (Please specify)
Question 4: In addition to conventional dial-up telephone Internet  access, is any other form of Internet access available in the area  where you live? (Select one for each row)
Wireless service (e.g., satellite, fixed wireless, other wireless)
Question 5: For those methods of Internet access that are not  available in your area, or not available to you, do either of the  following reasons describe why such methods are not available?  (Select one in each row)
Question 6: Which of the following is the most important reason you  selected your current Internet service provider (e.g., AOL,  Excite@Home, MindSpring, etc.)? (Select one)
Previous experience/was familiar with my ISP prior to subscribing Provided the best access to the content/applications that I use and/or  want most Did research on my ISP prior to subscribing Recommended to me by family, friends, co-workers, etc.
Part of a promotion with the purchase of my computer (e.g., a cash rebate,  a free trial, etc.)
Offered as part of a package of services by a telecommunications  company My Internet service provider came bundled with my Internet access Other (Please specify)
Missing observation = 0.2%.
Is (are)  _____ available to you through your Internet service  provider (you don’t necessarily have to be using the  application)?  (Select one for each row)
Question 8: Thinking about a typical Internet session, what  percentage of your time is spent on your ISP’s home page accessing  content or service applications, such as e-mail, as opposed to the  percentage of time spent surfing the Internet for content and  applications?  (Please enter appropriate percentage)
Percentage of time spent on ISP’s home page content 5.5 (Continued From Previous Page)
Question 9: What are the advantages to using applications or  accessing content that appear on your ISP’s home page? (Select all  that apply)
Question 10A: How interested would you be in purchasing a  package of communications services from a single company (for  example, telephone, cable television, Internet access, etc.)?  (Select one)
Question 11: In addition to your home, from which other locations  do you access the Internet?  (Select all that apply)
A remote location using my laptop (for example, a hotel, an airport, etc.)
A remote location using my mobile wireless device (for example, Palm  Pilot)
Other (Please specify)
Question 12: On average, how many hours per week do you and all  members of your household spend on the Internet from your home  using any and all applications (for example, e-mail, Web surfing,  working, shopping, etc.)?  (Select one)
Question 13: Including your work experience, how long have you  been accessing the Internet?  (Select one)
Question 14A: About how much did you initially pay to obtain  Internet access from your home?  Please include in your amount  such items as  the purchase of an external modem,  any initial fee for your Internet service provider, and   any installation charge for a second phone line if you purchased  one to be used primarily for your Internet use.
Do not include in your amount the purchase of a computer.  (Select  one)
Question 14B: About how much do you pay per month to access the  Internet from your home?  Please include in your amount such  items as  access (via telephone, cable, etc.),  the monthly charge for a second phone line if you purchased one  to be use primarily for your Internet use,  the monthly charge for your Internet service provider, and   any equipment leasing.(Select one)
Question 15: About how much more would you be willing to pay  over and above what you are currently paying per month for high- speed Internet access (for example, high-speed DSL service, high- speed cable modem service, or wireless service)?  (Select one)
Question 16: About how much more per month would you be willing  to pay over and above what you are currently paying per month for  your high-speed Internet access before you would either  discontinue the service and/or change to a conventional dial-up  telephone line for Internet access?  (Select one)
Question 17: Overall, how easy or difficult was the process of  purchasing high-speed Internet access from your home (for  example, the amount of time, the number of calls made to the  Internet access provider, the number of visits made to your home by  the provider’s technician, etc.)?  (Select one)
Question 18: Have you ever tried to get high-speed Internet access  (high-speed DSL service, high-speed cable modem service, or  wireless service) but been unable to?  (Select one)
section_title: Survey Results for Sample Representative of the U.S. Internet Population in Areas Where Broadband Is Believed to Be Available
paragraphs: The following tables show the questions included in our survey of Internet  users and the responses by percentage of respondents. For this sample, we  surveyed 2,525 Internet users who lived in areas of the country that we had  determined were very likely to have at least one broadband choice  available to them. We received 1,209 responses (a 47.9-percent response  rate). Question 1—which asked whether the respondent was the primary  decisionmaker for Internet purchases in the household—was asked of all  survey participants. Only those participants who responded “Yes” to this  question (1,069 participants) continued with the remainder of the survey.  We also excluded 409 responses (16.2 percent of the sample) as  recommended by NPD to ensure that the sample was representative of the  target population. Additionally, 21 observations were removed because the  respondent provided inconsistent answers to questions 2 and 4 or because  the respondent was under 18 years old. This left 639 responses for  questions 2 through 18.
For this sample, the sample frame consisted of 72,600 individuals; this is  the population to which the survey results can be generalized. For  questions 2 through 18, the relevant population estimate was 57,989  because of the excluded observations mentioned above.
Unless otherwise noted in footnotes to the questions, there were no  missing observations.
Question 1: Are you the primary decisionmaker for your household  regarding what form of Internet access to purchase for your home?  (Select one)
Question 2: Which of the following do you most frequently use to  access the Internet from your home? (Select one)
Conventional dial-up telephone service provided by a telephone  company (this includes ISDN service)
High-speed “digital subscriber line” (or “DSL”) telephone service High-speed cable modem service (this includes using the cable modem  as the downlink and a telephone line for the return path or uplink)
Wireless service (for example, satellite service such as DirecPC, fixed  wireless service such as Winstar or Teligent, or other wireless service)
Question 3A: What is the most important reason you use  conventional dial-up telephone service for your Internet access  from home? (Select one)
No choice; only method of Internet access available to me Not aware of other choices of Internet access Company’s service quality reputation and/or experience Most appropriate for the applications/services I use most frequently Ability to select the Internet service provider I wanted Other (Please specify)
Question 3B: What is the most important reason you use (high- speed DSL service, high-speed cable modem service, or wireless  service) for your Internet access from your home? (Select one)
Company’s service quality reputation and/or experience Ability to select the Internet service provider I wanted Speed appropriate for the applications/services I use most frequently Speed equivalent to the access I have at work or at other locations where  I have Internet access To free up my regular telephone line for voice call Other (Please specify)
Question 4: In addition to conventional dial-up telephone Internet  access, is any other form of Internet access available in the area  where you live? (Select one for each row)
Wireless service (e.g., satellite, fixed wireless, other wireless)
Question 5: For those methods of Internet access that are not  available in your area, or not available to you, do either of the  following reasons describe why such methods are not available?  (Select one in each row)
Question 6: Which of the following is the most important reason you  selected your current Internet service provider (e.g., AOL,  Excite@Home, MindSpring, etc.)? (Select one)
Previous experience/was familiar with my ISP prior to subscribing Provided the best access to the content/applications that I use and/or  want most Did research on my ISP prior to subscribing Recommended to me by family, friends, co-workers, etc.
Part of a promotion with the purchase of my computer (e.g., a cash rebate,  a free trial, etc.)
Offered as part of a package of services by a telecommunications  company My Internet service provider came bundled with my Internet access Other (Please specify)
Is (are) _____ available to you through your Internet service  provider (you don’t necessarily have to be using the  application)? (Select one for each row)
Question 8: Thinking about a typical Internet session, what  percentage of your time is spent on your ISP’s home page accessing  content or service applications, such as e-mail, as opposed to the  percentage of time spent surfing the Internet for content and  applications? (Please enter appropriate percentage)
Percentage of time spent on ISP’s home page content 0.2 (Continued From Previous Page)
Question 9: What are the advantages to using applications or  accessing content that appear on your ISP’s home page?(Select all  that apply)
Question 10A: How interested would you be in purchasing a  package of communications services from a single company (for  example, telephone, cable television, Internet access, etc.)? (Select  one)
Question 10B: Which best describes why you would be interested in  purchasing a package of communications services? (Select one)
Question 11: In addition to your home, from which other locations  do you access the Internet?(Select all that apply)
A remote location using my laptop (for example, a hotel, an airport, etc.)
A remote location using my mobile wireless device (for example, Palm  Pilot)
Other (Please specify)
Question 12: On average, how many hours per week do you and all  members of your household spend on the Internet from your home  using any and all applications (for example, e-mail, Web surfing,  working, shopping, etc.)? (Select one)
Question 13: Including your work experience, how long have you  been accessing the Internet? (Select one)
Question 14A: About how much did you initially pay to obtain  Internet access from your home? Please include in your amount  such items as  the purchase of an external modem,  any initial fee for your Internet service provider, and  any installation charge for a second phone line if you purchased  one to be used primarily for your Internet use.
Do not include in your amount the purchase of a computer. (Select  one)
Question 14B: About how much do you pay per month to access the  Internet from your home? Please include in your amount such items  as  access (via telephone, cable, etc.),  the monthly charge for a second phone line if you purchased one  to be use primarily for your Internet use,  the monthly charge for your Internet service provider, and  any equipment leasing. (Select one)
Question 15: About how much more would you be willing to pay  over and above what you are currently paying per month for high- speed Internet access (for example, high-speed DSL service, high- speed cable modem service, or wireless service)? (Select one)
Question 16: About how much more per month would you be willing  to pay over and above what you are currently paying per month for  your high-speed internet access before you would either  discontinue the service and/or change to a conventional dial-up  telephone line for Internet access? (Select one)
Question 17: Overall, how easy or difficult was the process of  purchasing high-speed Internet access from your home (for  example, the amount of time, the number of calls made to the  Internet access provider, the number of visits made to your home by  the provider’s technician, etc.)? (Select one)
Question 18: Have you ever tried to get high-speed Internet access  (high-speed DSL service, high-speed cable modem service, or  wireless service) but been unable to? (Select one)
section_title: Comments From the Department of Commerce
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to those named above, Michael Clements, Faye Morrison, and  Luann Moy made key contributions to this report.
section_title: Ordering Information
paragraphs: The first copy of each GAO report is free. Additional copies of  reports are $2 each. A check or money order should be made out to  the Superintendent of Documents. VISA and MasterCard credit  cards are accepted, also.
Orders for 100 or more copies to be mailed to a single address are  discounted 25 percent.
Orders by mail: U.S. General Accounting Office P.O. Box 37050 Washington, DC  20013 Orders by visiting: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders by phone: (202) 512-6000 fax: (202) 512-6061 TDD (202) 512-2537 Each day, GAO issues a list of newly available reports and  testimony. To receive facsimile copies of the daily list or any list  from the past 30 days, please call (202) 512-6000 using a touchtone  phone. A recorded menu will provide information on how to obtain  these lists.
section_title: To Report Fraud, Waste, or Abuse in Federal Programs
paragraphs: Web site: http://www.gao.gov/fraudnet/fraudnet.htm  e-mail: fraudnet@gao.gov  1-800-424-5454 (automated answering system)