US Broadband Update—First Half 2014

Posted By on Jun 2, 2014 | 0 comments

Last week, cable industry vendor Arris published the results of its 2014 Consumer Entertainment Index study.  The study covers a number of areas, but one slide in particular caught our eye: slide 16 reporting survey responses from users in 19 countries to the question “How often do you encounter issues when streaming?”

Only users in Japan reported fewer issues with streaming than users in the US.

Now, with a relatively small sample size (10,500 people, across 19 countries), self-reporting, and very little information regarding the survey methodology, I wouldn’t presume to treat this as a rigorous scientific result.  Nonetheless, it is an interesting contrast to the recurring claims of critics that US broadband badly trails the rest of the world (and that absent strong “net neutrality” regulation, the internet as we know it will cease to exist).

Many of our readers will recall that in February, we published an analysis of real-world broadband performance and cost data, concluding that US broadband performance and cost is very competitive with other world countries, indeed—providing better cost and performance than all but a handful of other countries, while supporting per user utilization rates that are 58% higher than Asian users, and 170% higher than European users.

The Arris study provides an interesting data point supporting the conclusion that the US broadband market is, in fact, performing very well compared to the rest of the world—including performing better than virtually all the world when it comes to video streaming, even as US users stream much more video than users anywhere else.

It turns out, Sandvine published its 1H14 Global Internet Phenomena report last month, also, so it seems like a good time for a quick update on US broadband trends.

Sandvine reports that in the first half of 2014, average downstream utilization per North American user grew from 37.9 GB to 43.8 GB, an increase of 15.6% in 6 months, or a 33.6% CAGR (compound annual growth rate).  Roughly two-thirds of the increase is attributable to Netflix, which grew from 31.62% to 34.21% of peak downstream utilization, reflecting apparent growth in Netflix usage at a 56% CAGR.  (And particularly noteworthy inasmuch as only about one-third of US broadband subscribers actually subscribe to Netflix.)

Utilization in comparison to the rest of the world hasn’t changed much, with North American per user (downstream) utilization reported as 160% higher than Europe, and 66% higher than Asia.

Sandvine included a North American “cord-cutting” breakout analysis, comparing heavy users (top 15% of users, streaming 3+ hours of video per day) to typical users (15th to 85th percentile users, light streaming) and non-streaming users (bottom 15% of users, minimal streaming).


Clearly, there are major disparities among users.  The heaviest 15% of users, together, represent more than 50% of total system usage.  Individually, these heavy users consume 7.3 times the consumption of the middle 70% of users, and almost 50 times the consumption of the lightest 15% of users.

It’s worth noting that self-proclaimed consumer advocates are invariably decrying any attempt by an ISP to introduce any form of usage capping or metering, but from a consumer standpoint, differentials this large beg the question of why typical and light users would want to be so massively subsidizing heavy users—an issue we discussed in our discussion of how broadband users who don’t subscribe to Netflix are actually heavily subsidizing Netflix service.

(In fact, the current flat-rate pricing structure that dominates US broadband ends up being quite disadvantageous to the majority of broadband subscribers, as well as very economically inefficient, as services such as Netflix externalize huge and rapidly increasing costs onto all broadband users, whether they subscribe to Netflix or not.  But we’ll leave a detailed discussion of such to a future article.)