NEW YORK, NY – A new comScore study on broadband growth in rural, micropolitan and metropolitan areas in the United States finds that broadband has experienced the most significant gains in rural areas during the past two years.

Rural markets (population less than 10,000) in the U.S. experienced a 16-percentage point increase in broadband penetration from Q2 2007 to Q2 2009, making it the fastest growing geographic market segment in the nation. Comparatively, micropolitan areas (population between 10,000-50,000) grew 14 percentage points during the same period, while metropolitan areas (population 50,000+) grew 11 percentage points.

Brian Jurutka, vice president of telecommunications at comScore, notes that "... with low-speed DSL priced at about the same level as dial-up in many areas, there is little incentive for households to remain on dial-up."

Broadband penetration of 75% in rural markets remains well below the national average of 89%. Lower broadband penetration in rural areas is compounded by lower Internet usage overall of 63% of all rural households with at least one member access the Internet, compared with 73% of urban households.

The fastest growing local markets in broadband adoption were all smaller, ranking at or below #50 in terms of size. Ft. Myers - Naples was the fastest growing market with a 12-percentage point increase in broadband penetration from Q1 2008 to Q1 2009.

In comparison, the nation's largest markets are closer to reaching saturation and experienced low single-digit growth.

While large broadband providers such as AT&T and Comcast have a presence in rural areas, smaller and more localized providers such as Cincinnati Bell, Insight, PenTeleData, Mediacom and Bresnan Communications are proving tough competition in the battle for market share.

And, the Leichtman Research Group study found that the nineteen largest cable and telephone providers in the US, representing about 93% of the market, acquired 634,000 net additional high-speed Internet subscribers in the second quarter of 2009. Net broadband additions in the quarter were the fewest of any quarter in the eight years LRG has been tracking the industry.

Other broadband findings for the quarter include:

• The top phone companies added about 385,000 subscribers, representing 61% of the net broadband additions for the quarter versus the top cable companies

• Overall, broadband additions in 2Q 2009 amounted to 71% of those in 2Q 2008, with Telcos having 178% as many additions as a year ago, and cable 37% as many adds as a year ago

• The top broadband providers now account for 69.9 million subscribers - with cable companies having 38 million broadband subscribers, and telephone companies having about 31.9 million subscribers

• The top cable broadband providers have a 54% share of the overall market

Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc., summarizes by saying "The second quarter has proven to be traditionally weak for broadband growth, but with the market becoming more mature, broadband (additions) further waned in 2Q 2009... In a reverse of last year's second quarter, when cable operators got three-quarters of the net broadband adds, Telcos earned over 60% of the broadband net adds in 2Q 2009."

Copyright 2009 Cable News Network. All rights reserved. From http://www.cnn.com. By John D. Sutter.
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