2006 Broadband Ohio Study
Availability and Cost of Broadband Internet Service in Ohio
Click here for the full report [pdf]
The ECom-Ohio Study, completed in the spring of 2000, sought to evaluate the current use and demand for broadband services and assess the availability of fiber throughout the state as an indicator of Ohio’s future readiness to enter the digital age. The study involved tabulating data on available access to high tech applications and services, and was based on the level of technology at that time. This primarily included traditional phone lines, potentially public and private fiber-optic cable plants, and the emerging residential-based broadband services of cable modem and Asymmetric Digital Subscriber Line (DSL or ADSL).
Since that time, a number of developments have greatly altered the landscape of broadband services for applications and services. Newer technologies and applications have made it possible to use highcapacity networks for many aspects of business development including sharing large databases, videoconferencing, direct sales, and disaster recovery services. Higher-capacity broadband services are fast replacing cable modem and DSL services in medium-to large-business applications. They are also leading to innovative network uses for education and training that are increasing economic opportunities for Ohio's workforce.
Additionally, many private providers are offering businesses in many areas of the state more competitive rates for higher-capacity broadband services. Demand is continually growing for bandwidth based on service convergence and high-capacity networks for businesses, government organizations, and educational institutions. Extra bandwidth is needed to serve typical business applications for data transfer, Internet transactions, videoconferencing, and other emerging applications. Broadband services will give Ohio an economic development advantage in competing with other states for employers, improving the quality of life for our citizens, and maintaining and growing our population and potential workforce.
In contrast to the 2000 report, the purpose of the new 2006 Broadband-Ohio study was to determine the availability and relative cost of broadband service options for government, health care, and business use in all 88 Ohio counties. The study provides an overview of the current market for highercapacity broadband services that are used by business, government, and other large customers as well as the geographic distribution of those services and relative costs throughout the state. The two highercapacity broadband services focused on in this study are the Time Division Multiplexing (TDM) Circuit-based (DS3/43 Mbps, OC3/155 Mbps and OC12/622 Mbps) and Ethernet-based (10 Mbps, 100 Mbps, and 1 Gbps) services. Study results can be used as the basis for evaluating the potential impacts of service availability and cost on economic development efforts as well as opportunities for public/private partnerships that improve services in markets that might otherwise be too small to attract sufficient private investment.
The data reported here should not be used as an indicator of the delivered prices of broadband services to any particular location. The actual price quoted on a specific project may vary from the costs reported here because each project will involve a different combination of services and capacities. In addition, the broadband market has been changing rapidly over the past several years. This has resulted in major drops in prices as new technologies and services become available. Consequently, current pricing may be significantly different than that reported here. However, the report does give a snapshot of the availability and relative costs for higher-capacity broadband services across the state policies.
Data for the study were obtained through a standardized survey of 94 telephone, cable, and independent Internet service providers in Ohio. Service availability and cost was requested for 236 sample locations spanning all of the 88 Ohio counties. Responses were received from 91 of the companies. Seventy-five respondents either offered no service or no standard service at this bandwidth. Sixteen service providers, including all of the state’s largest service providers, replied with standard pricing.
DS3 service (45 Megabits per second or Mbps) with Internet is available throughout the state and is available at 100% of the sample locations. The average cost in the six largest counties (Cuyahoga, Franklin, Hamilton, Lucas, Summit, and Montgomery) is significantly lower than in other locations. In the lowest density rural counties, prices were more than twice the lowest available cost. There is a wide variation in cost from $6,600 to $9,000 per month found in the highest population counties, to almost $16,000 per month in some of the rural counties. This is expected given the smaller number of customers to be served in rural areas.
As we move from DS3 to higher-capacity OC3 (155 Mbps) and OC12 (622 Mbps) services, availability declines and costs increase. OC3 services are available in all counties but costs range from a low of $15,000 per month to a high of almost $95,000 per month. OC12 services are not available in 20 Ohio counties. Where the OC12 service is available, costs range from around $30,000 to almost $155,000 per month.
Ethernet services (10 Mbps, 100 Mbps, and 1 Gpbs) are less costly but are not yet as universally available as the TDM Circuit services. Where Ethernet services are available, their cost is much lower than TDM circuits, making Ethernet services more affordable at all levels.
Conclusions:
Ohio's major metropolitan areas are well provisioned with multiple broadband service providers, service choices, and more competitive pricing. As one moves to medium and low-density population counties, the number of service providers declines as does the availability, resulting in higher costs for services. The private sector is unlikely to invest as rapidly in these areas because the market is limited, and therefore, will yield much lower returns on investment. The number of providers in many urban areas is a good indication of significant competition to provide telecommunications services. Ethernet services are more widely available than was expected. Their availability is potentially important to contribute to economic development since Ethernet services are lower in cost and easier to deploy. Where there are significant public facilities and the potential for economic growth in low-density counties, there is an opportunity for public/private partnerships to make investments in the network infrastructure to improve the potential for economic development in those areas. Such investments would improve public service delivery and the business climate, providing market opportunities for telecommunications companies and other employers. Consideration should be given to new approaches in Ohio to provide our communities with competitive advantages for economic growth by encouraging rapid installation of high-speed broadband services.
