The Cost to Connect

WHAT SMALL BUSINESSES SHOULD EXPECT TO PAY FOR STAYING CONNECTED Broadband availability is a hot button issue for Americans today. More than a year after Congress passed the economic stimulus package, President Obama announced that $795 million of that money will go toward expanding Internet access across the country to provide jobs and improve communication. Obama's plan, will allocate more than $1 billion for installing broadband Internet across the country. In his 2011 State of the Union, the president stated that he wanted to see broadband wireless available to 80% of the U.S. population within the next couple of years. BROADBAND BASICS WHAT SHOULD THE AVERAGE SMALL BUSINESS EXPECT TO PAY DIGITAL SUBSCRIBER LINE (DSL) FOR A BROADBAND INTERNET SERVICE? • Because DSL uses existing phone company networks, it's more readily available to small| businesses than cable modem Overall, broadband users pay an average of $110 per month for Internet service, though most small businesses pay between $50 and $99 per month. Costs for a small business connedion range from $25 to $3,300 per month; generally, higher-speed services cost more. On average, rural broadband customers pay less than businesses in larger cities and do not have access to the highest speed services available in metro areas. Here's what average metro and rural small businesses pay for the following services: service. • Download Speed Range: 768 Kbps to 24 Mbps CABLE MODEM • Since the mid-1990s, cable TV providers have upgraded their systems to provide Internet service. They construct fiber optics that make it possible for the cable to operate as a two- way system, providing Internet to neighborhoods and businesses. • Download Speed Range: 256 Kbps to 105 Mbps METRO RURAL DSL 50% of metro small businesses using DSL service pay 39% of rural smal businesses using DSL service pay $124 /mo $86 mo WIRELESS BROADBAND • Commercial cellular carriers provide wireless broadband services at speeds that range from 2G to 4G to consumers using smartphones, air cards. CABLE AT&T 3G 30% of metro small businesses using cable service pay 33% of rural small businesses using cable service pay Ma Download Speed Range: 128 Kbps to 300 Kbps for 2G services, 600 Kbps to 1.5 Mbps for 3G services, and 1.5 Mbps to 6 Mbps for 4G services $68 mo /mo Inbox WIRELESS BROADBAND 3% of metro small businesses using wireless broadband service pay 6% of rural smgll businesses using wireless broadband service pay SATELLITE • Satellite broadband is available to any potential customer who can install a satellite dish facing in the correct direction. It is an option for many businesses that cannot obtain fiber, cable, or DSL services. • Download Speed Range: 1 Mbps to 5 Mbps /mo /mo SATELLITE 2% of metro small businesses using satellite service pay 7% of rural small businesses using satellite service pay $163 m $86 mo /mo 48% of rural broadband users and The small business broadband adoption rate increased to 90% in 2010. 37% of metro broadband users report. WE'RE NOT SATISFIED WITH OUR INTERNET SPEED. "Small businesses want both competition and choice (of providers and services) in broadband, and are dissatisfied with the choices they currently have available." Additionally, 7.7% of rural and 3.5% of metro-area respondents say: WE HAVE NO BROADBAND OPTIONS! - Small Business Administration HISTORICAL LOOK AT BROADBAND PRICES PER MONTH FOR U.S. SMALL BUSINESSES (2003-2010) 2003 2010 $115 METRO RURAL 90% increase in estimated average from 2003-2010 49% increase in estimated average from 2003-2010 $77 $71 $80 $66 $68 DSL DSL CABLE $60 $48 CABLE MODEM MODEM $88 $124 $28 $90 $80 WIRELESS WIRELESS BROADBAND $70 BROADBAND $74 $86 SATELLITE SATELLITE $59 $163 $0 $50 $100 $150 $0 $50 $100 $150 $200 The average advertised download speed offered by broadband providers is 1077 Mbps in Japan and 52.7 Mbps in South Korea. By these figures, the United States ranks twenty-fourth globally, with an average advertised broadband download speed of 14.6 Mbps. SMALL BUSINESS BROADBAND SPEED AROUND THE WORLD JAPAN 107.7 mbpa KOREA 52.7 wbps UNITED STATES 14.6 ibps QuickBooks Online intui. SOURCES archive.sba.gov / foc.gov / pcworld.com / huffingtonpost.com INTERNET SEND RECEIVE