More on broadband access vs usage: Do the math, Ottawa

snake oil, quackeryI’ve said usage trumps access, policy-wise – i.e. sheer access does nothing for the public interest or consumer welfare (though it does a lot for the self-serving proclamations of politicians, policymakers and ISPs: We’re the best!)

How does my principle look in numerical terms? I did some analysis of the Stats Can data mentioned by Karen Fournier (see previous post), and I have a modest suggestion.

Let’s go back to that reference on the Stats Can provincial data:

Prince Edward Island, Nova Scotia and New Brunswick may boast 100 penetration, but according to Statistics Canada, 77, 76 and 73 per cent of residents, respectively, use the Internet.

Before we get to dialing these numbers down, let’s define our terms. The phrase “use the Internet” raises four terminological questions:

  • One, respondents use the Internet on what kind of connection?
  • Two, use it from where?
  • Three, use it how often?
  • And four, what’s the age cutoff?

The answers I propose are:

  • on broadband
  • from home as opposed to business or public institutions like libraries
  • goes online every day
  • 16 years and up.

Canada’s official onliner club is way too big – and too easy to get into

Connectivity. Stats Can makes no mention of what they mean by broadband, a big surprise from an agency that prides itself on rock-solid methodology. (I’ve written them to ask what’s up.) At a later point, I’ll show the effect of pegging broadband down at 1.5 megs, then at 4.0 megs (which happen to be the CRTC and FCC thresholds respectively).

Location. Home and business users are typically separated in large surveys, and I’m arguing for the welfare of home users. The current government needs no advice on how to make life better for business ICTs.

Frequency. Stats Can uses a generous threshold for defining an onliner: “An ‘Internet user’ is someone who used the Internet for personal reasons from any location in the 12 months preceding the survey.” I argue this is not a suitable threshold – and there’s good empirical reason for saying so.

Going online changes people in measurable ways. And using broadband changes online behavior even more significantly. Way back in 2002, the Pew folks made some breakthrough discoveries from a survey they conducted that year, reported in a study called The Broadband Difference: How online behavior changes with high-speed Internet connections.

People in the digital media industry talk a lot about the end-user “experience” – marking the sharp break from old media’s traffic in eyeballs. In survey research, some of this concept is captured by intensity of Internet use. This can be measured in several ways, which together make a pretty good proxy for the end-user’s experience.

In the 2002 study (and in many others since), Pew used i) going online “yesterday,” ii) amount of time spent online on a typical day, and iii) number of Internet activities done in a particular day, as the independent variables. They considered seven dependent (explanatory) variables:  a home broadband connection, number of years online, age, income, education, gender, and race.

On the basis of a thorough technical analysis of the data, the findings were pretty dramatic:

The results show that having a home broadband connection, number of years online, and gender are the only factors that explain intensity of Internet use consistently in all three specifications.  Although numbers are not reported, having home broadband is the largest single factor that explains going online daily, spending two or more hours online daily, or doing a greater number of Internet activities. […] In short, having a home broadband connection and having been online for a long time both increase your chances of using the Internet intensively. But the home broadband connection increases your chances more (emphasis mine).

This is worth spelling out in more mundane terms (from the Pew overview):

Broadband users spend more time online, do more things, and do them more often than dial-up Internet users. They are more likely to create content. Their online world is much more expansive than dial-up users. They also [report] high levels of satisfaction with the way the Internet helps them connect to family and friends, learn new things, pursue their hobbies, do their jobs, and connect to local organizations.

surfing

Stats Can confirms these Pew findings, in part, in its May 2010 results. The agency did not attempt to measure the effects of broadband usage but did find two interesting things about the number of years respondents had been online:

  • “Canadians who had used the Internet for five or more years were less likely to be concerned about online security than those with fewer years of online experience.”
  • “By 2009, 65% of all Canadians reported using the Internet for five or more years, up from 54% in 2007. As well, people who had used the Internet longer also reported a wider range of online activities.”

Two-thirds of Canadians have been on the Internet for five years or more. Their attitudes and behaviors are changing accordingly. Is anyone in Ottawa keeping tabs on this?

Age. The advantage of Stats Can data over most private-sector data is they survey 16- and 17-year-olds, rather than just adults 18 and up (it costs more to interview minors).

Who are the real onliners?

I’m now going to take a whack at the numbers used officially in Ottawa to represent the Canadian online presence. Here’s the CRTC’s take as noted in its current Communications Monitoring 
Report (2010):

Approximately 95% of Canadian households can access broadband services using landline facilities. Satellite facilities extend this reach to virtually all households and are only limited by capacity constraints.

I’ve said my piece on the policymaking value of “access” – roughly zip. (I also note in passing that to say satellite links are “only limited by capacity constraints” is ridiculous. It’s a bit like saying the only problem with dialup is its capacity constraints. Satellite will never provide the speeds necessary for high-bandwidth services, including many, I assume, which will be promoted and subsidized as Canadian content. And satellite subscriptions are more expensive than wireline subscriptions, even when the latter offer faster speeds.)

The Stats Can take: “In 2009, 80% of Canadians aged 16 and older, or 21.7 million people, used the Internet for personal reasons, up from 73% in 2007 when the survey was last conducted.”

Keep in mind that this statement refers to anyone who has used the Internet “for personal reasons from any location in the 12 months preceding the survey.” I’m now going to use three variables to reduce this online population to a meaningful size. These are:

location restricted to home
connectivity broadband (dialup excluded)
going online daily, not once a year

Step one: all locations reduced to home only

S.C. says 96% of respondents reported going online from home. We take that proportion of the original 80%:

80% x .96 = 76.8% (home only)

Step two: high-speed only

S.C. says: “Among people who accessed the Internet from home in 2009, 92% did so with a high-speed connection…” We leave for the moment what they mean by a high-speed connection (it would be very helpful for the federal agencies to adopt a nomenclature like “always-on” connection, since there’s little point in calling, say, a 128 Kbps downlink a “high-speed” connection). We take that proportion of our home-only value:

76.8% x .92 = 70.7% (home, high-speed)

Step three: online daily

S.C. says: “Among those who used the Internet from home, 75% went online every day during a typical month, up from 68% in 2007.” This is slightly trickier, since the proportion of daily users is taken over all users, not just high-speed users. I would suggest adjusting these numbers by discounting for dialup users, since (I assume) high-speed users are much more likely to be online daily than dialup users. But as dialups form only 8% of the home online population, I’m going to leave it at 75%.

70.7% (home high-speed) x .75 = 53% (16+, home, high-speed, online daily)

So by my reckoning, the proportion of Canadians 16+ who can be considered core or mature onliners (with my assumptions about location, connectivity and frequency) is about 53%. My 53% is just a shade over half the size of the Canadian group that the CRTC and other agencies claim are somehow benefitting from broadband.

Just to be conservative, I’m going to assume a margin of error in favor of a larger onliner core, by rounding up the 53% to 60%. I have no real rationale for the 7% margin – just want to fortify my prior assumptions.

This way of looking at Canada’s online population has potential benefits for both business and government, because it doesn’t treat this population like a mass-media audience, where sheer size is what counts. It takes the most experienced and active consumer segment, and separates it out from other onliners whose behavior and attitudes are significantly different.

The next step is to try out my “lost audience” idea on the developers at the IN 10 conference on Tuesday… as in Where the hell is my online audience?

D.E.