According to a new report out of Minnesota-based ID Insight, Hawaii is the second least competitive state in the country when it comes to broadband Internet access. Only Rhode Island had less competition. And the most competitive state? Arkansas.
The company’s “BroadBand Scout” report found that low-income states actually have the most competition… at least by the criteria used in its survey, which was based on “the usage and carrier information for roughly 20 percent of U.S. households.”
ID Insight surveyed the top ten Internet service providers in each state and their relative market share, and found that the Arkansas market was relatively flat. It’s top six carriers had over ten percent market share each, the largest holding only 30 percent of the broadband customers.
By comparison, Rhode Island’s top carrier, Cox Communications, has 78 percent of the market, followed by Verizon with 17 percent. Those two companies represent approximately 95 percent of the broadband market.
Although no details were provided for Hawaii, the picture is probably similar to that in Rhode Island, with leading carriers Oceanic Time Warner Cable and Hawaiian Telcom holding the lion’s share of broadband Internet customers.
Of more than 100 attributes included in the survey, median home values and median household income had the strongest inverse relationship with broadband competitiveness. Indeed, the higher the number of people using the Internet, and the faster the speeds available, competition was lower.
“This may at a certain level be counter-intuitive,” the report notes. “However, when you look at this one layer deeper, it begins to make sense. In more prosperous states where there are many users, and more wealth, this tended to attract the largest providers. As infrastructure was enabled and larger providers began to dominate markets, it became increasingly difficult for new entrants to establish themselves.”
If the most lucrative markets tend to become less competitive, it’s fair to question whether the larger providers will be motivated to increase their network speeds. Certainly food for thought in developing a National Broadband Plan.