FALLING THROUGH THE NET:
TOWARD DIGITAL INCLUSION
A Report on Americans' Access to Technology Tools
October 2000
U.S. Department of Commerce
Economic and Statistics Administration
National Telecommunications and Information Administration
THE SECRETARY OF COMMERCE
Washington, DC 20230
The digital economy is moving our Nation toward greater prosperity. Our goal at the Commerce
Department is to ensure that all Americans - regardless of age, income, race, ethnicity, disability,
or geography - gain access to the technological tools and skills needed in the new economy.
Falling Through the Net: Toward Digital Inclusion is a key part of the Department's ongoing
efforts to promote full participation in the digital economy. It is important for our Nation to
measure and analyze how the digital economy is affecting its citizens.
I am pleased that the data in this report show that, overall, our Nation is moving toward full
digital inclusion. The number of Americans who are utilizing electronic tools in every aspect of
their lives is rapidly increasing. However, a digital divide still remains. The report shows that not
everyone is moving at the same speed, and identifies those groups that are progressing more
slowly. The report also is rich with insights into how Americans are gaining access to key
technologies, and how they are using such tools. With this information, we can better target and
enact policies and programs to close the disparities in access to computers and the Internet that
still are being experienced by some in our Nation.
I applaud the many public and private sector efforts that are helping Americans achieve greater
access to the tools of the digital economy. We are rapidly becoming a digital Nation. We know
that to not have access to such tools means to miss out on tremendous economic and educational
opportunities. This report shows us that much work is left to be done.
The Commerce Department looks forward to continuing to work with the many public and
private sector organizations that are striving to ensure greater digital inclusion for everyone.
Norman Y. Mineta
FALLING THROUGH THE NET:
TOWARD DIGITAL INCLUSION
National Telecommunications Economic and Statistics Administration
and Information Administration
Gregory L. Rohde, Assistant Secretary Robert Shapiro, Under Secretary for
for Communications and Information Economic Affairs
JOINT PROJECT TEAM
for NTIA for ESA
Kelly K. Levy, Associate Administrator, Lee Price, Deputy Under Secretary for
Office of Policy Analysis and Development Economic Affairs
James McConnaughey, Senior Economist Patricia Buckley, Senior Policy Advisor
Wendy Lader, Senior Policy Advisor Sabrina Montes, Economist
Art Brodsky, Director of Communications George McKittrick, Economist
Sandra Laousis, Telecommunications Gwendolyn Flowers, Chief Economist
Policy Analyst
Jeffrey Mayer, Director of Policy Development
JOINT PROJECT CONTRIBUTORS
for NTIA for ESA
Kathy Smith, Chief Counsel Jane Molloy, Director, Office of Policy Analysis
Milton Brown, Deputy Chief Counsel Laurence Campbell, Senior Regulatory Policy
Economist
Steve Saleh, Program Officer
Sandra Cooke, Economist
Wayne Ritchie, Management and Program Analyst
Lan Chu, Law Clerk
U.S. Bureau of the Census
Demographic Surveys Division Technologies Management Office Population Division
Ronald R. Tucker Adelle Berlinger Judith Eargle Andrew Stevenson Eric Newburger
Greg Weyland L. Dinah Flores John M. McNeil
Tim J. Marshall Aileen Bennett
TABLE OF CONTENTS
INTRODUCTION xiii
EXECUTIVE SUMMARY xv
PART I: HOUSEHOLD ACCESS TO COMPUTERS AND THE INTERNET 1
Overall Household Findings: The Nation Moves Toward Digital Inclusion 2
Digital Inclusion Proceeds Unevenly 2
Geography 4
Income 8
Education 10
Race and Ethnicity 12
Household Type 17
Households With Computers and Internet Access, by State 20
A New Dimension: High Speed Internet Access 23
Non-Internet Households 25
Why Households with Computers Have Never Had Internet Access 26
Why Households with Computers Have Discontinued Internet Access 27
PART II: USE OF THE INTERNET BY INDIVIDUALS 33
Internet Use Among Individuals 36
Income 36
Race and Ethnicity 37
Gender 39
Educational Attainment 40
Age 41
Location of Internet Access 45
Locations of Internet Access Outside the Home 46
Online Activities 47
Online Activities of Home Internet Users 48
Online Activities of Outside the Home Internet Users 49
PART III: INTERNET ACCESS AND COMPUTER USE AMONG PEOPLE WITH
DISABILITIES 61
Definitions 62
Exploring the Populations with Disabilities 67
Income 69
Race and Ethnicity 70
Age 71
Employment Status 72
Gender 73
Access, Use, and Disability: 16-24 Year Olds 75
Access, Use, and Disability: 25-49 Year Olds 78
Access, Use, and Disability: 50-64 Year Olds 81
Access, Use, and Disability: 65 Year Olds and Older 83
CONCLUSION - A LOOK AHEAD 89
METHODOLOGY 91
Current Population Survey 91
Survey of Income and Program Participation 92
BOXES
Box II-1 The Relationship Between the Household- and Person-based Measures 35
Box III-1 The Survey on Income and Program Participation 62
Box III-2 Building a Disability Category 64
FIGURES
Figure I-1 Percent of U.S. Households with a Computer and Internet Access, Selected Years 1
Figure I-2 An Illustrative S Curve 3
Figure I-3 Percent of U.S. Households with Internet Access, by U.S., Rural, Urban, and Central
Cities,
1998 and 2000 4
Figure I-4 Percent of Rural Households with Internet Access, by Income, 1998 and 2000 5
Figure I-5 Percent of U.S. Households with a Computer, by U.S., Rural, Urban, and Central City
Areas, 1994, 1997, 1998, 2000 7
Figure I-6 Percent of U.S. Households with Internet Access, by Income, 1998 and 2000 8
Figure I-7 Percent of U.S. Households with a Computer, by Income, 1998 and 2000 10
Figure I-8 Percent of U.S. Households with Internet Access, by Education, 1998 and 2000 11
Figure I-9 Percent of U.S. Households with Home Internet Access by Income and Education,
1998 and 2000 12
Figure I-10 Percent of U.S. Households with Internet Access, by Race/Hispanic Origin, 1998 and
2000 13
Figure I-11 Rate of Growth of Internet Penetration, by Race/Hispanic Origin, 1998 and 2000 14
Figure I-12 Income and Education Differences Account for Half of the Gap between Blacks and
Hispanics
and the National Average 15
Figure I-13 Percent of U.S. Households with a Computer, by Race/Hispanic Origin, 1998 and
2000 16
Figure I-14 Percent of U.S. Households with a Computer, by Family Type, 1998 and 2000 18
Figure I-15 High Speed Internet Access, 2000 24
Figure I-16 High Speed Internet Access, By U.S., Rural, Urban, and Central Cities, Percent of
U.S. Households with Internet Access 24
Figure I-17 Reasons for U.S. Households with a Computer/Web TV Never Accessing the
Internet,
Percent Distribution, 2000 26
Figure I-18 Reasons for U.S. Households Discontinuing Internet Use, Percent Distribution, 2000
28
Figure II-1 Different Perspectives on Internet Access and Use 35
Figure II-2 Broad Increases in Internet Use Since 1998 36
Figure II-3 Internet Use by Income 37
Figure II-4 Internet Use by Race/Ethnicity 38
Figure II-5 Household Access Rates by Race/Ethnicity Do Not Closely Track Internet Use by
Persons 38
Figure II-6 Internet Use by Gender and Age 39
Figure II-7 Internet Use by Gender and Race/Ethnicity 40
Figure II-8 Internet Use Rates by Educational Attainment 41
Figure II-9 Internet Use by Age Group 41
Figure II-10 Internet Use by Income, Age 18-24 43
Figure II-11 Internet Use Age 25-49 and Labor Force Status 44
Figure II-12 Internet Use Age 50+ and Labor Force Status 45
Figure II-13 Internet Access by Location 46
Figure II-14 Internet Use by Location and Race/Ethnicity 46
Figure II-15 Online Activities 48
Figure II-16 The Percent of Internet Users Searching for Jobs on the Internet Declines as Income
Increases 50
Figure III-1 Internet Access by Disability Status, 1999 65
Figure III-2 Personal Computer Use Experience by Disability Status, 1999 66
Figure III-3 Regular Users of PCs by Location and Disability Status, 1999 66
Figure III-4 Income Distribution for Persons with a Disability 68
Figure III-5 Income Distribution for Persons without a Disability 68
Figure III-6 Age Distribution for Persons with a Disability 68
Figure III-7 Age Distribution for Persons without a Disability 68
Figure III-8 Employment Status Distribution for Persons with a Disability 68
Figure III-9 Employment Status Distribution for Persons without a Disability 68
Figure III-10 Internet Access at Home, by Income and Disability Status, 1999 69
Figure III-11 Regularly Uses a PC, by Income and Disability Status, 1999 69
Figure III-12 Internet Access at Home, by Race/Ethnicity and Disability Status, 1999 70
Figure III-13 Regularly Uses a PC, by Race/Ethnicity and Disability Status, 1999 70
Figure III-14 Internet Access at Home, by Age and Disability Status, 1999 71
Figure III-15 Regularly Uses a PC by Age and Disability Status, 1999 71
Figure III-16 Internet Access at Home, by Employment and Disability Status, 1999 72
Figure III-17 Regularly Uses a PC, by Employment and Disability Status, 1999 72
Figure III-18 Internet Access at Home by Gender and Disability Status, 1999 73
Figure III-19 Regularly Uses a PC by Gender and Disability Status, 1999 73
Figure III-20 Internet Access Among 16-24 Year Olds, by Disability Status 76
Figure III-21 Personal Computer Use Experience Among 16-24 Year Olds, by Disability Status,
1999 76
Figure III-22 Internet Access Among 25-49 Year Olds, by Disability Status, 1999 78
Figure III-23 Personal Computer Use Experience Among 25-49 Year Olds, by Disability Status,
1999 78
Figure III-24 Internet Access Among Employed 25-49 Year Olds, by Disability Status, 1999 79
Figure III-25 Personal Computer Use Experience Among Employed 25-49 Year Olds, by
Disability Status, 1999 79
Figure III-26 Internet Access Among 50-64 Year Olds, by Disability Status, 1999 81
Figure III-27 Personal Computer Use Experience Among 50-64 Year Olds, by Disability Status,
1999 81
Figure III-28 Internet Access Among 65 and Older, by Disability Status, 1999 83
Figure III-29 Personal Computer Use Experience Among 65 and Older, by Disability Status, 1999
83
TABLES
Table I-A Percent of Households with Computers, by State: 2000 21
Table I-B Percent of Households with Internet Access, by State: 2000 22
Table I-1 Percent of Households with a Computer 30
Table 1-2 Percent of Households with Internet Access 31
Table II-1 Internet Use Individuals Age 3 and Older 51
Table II-2 Internet Use Individuals Age 3-8 Years 53
Table II-3 Internet Use Individuals Age 9-17 54
Table II-4 Internet Use Individuals Age 18-25 55
Table II-5 Internet Use Individuals Age 25-49 In the Labor Force 56
Table II-6 Internet Use Individuals Age 25-49 Not in the Labor Force 57
Table II-7 Internet Use Individuals Age 50+ In the Labor Force 58
Table II-8 Internet Use Individuals Age 50 + Not in the Labor Force 59
Table II-9 Reconciliation of Household Access and Person Internet Use Rates for 2000 60
Table III-1 Disability Status of Persons 16 and Above 63
Table III-2 Population Distribution, by Age and Disability 74
Table III-3 Internet Access and Computer Use by 16-24 Year Olds 77
Table III-4 Internet Access and Computer Use by 25-49 Year Olds 80
Table III-5 Internet Access and Computer Use by 50-64 Year Olds 82
Table III-6 Internet Access and Computer Use by 65 Year Olds and Older 84
Table III-7 Individuals 16 and Over 85
Table III-8 Internet Access and Computer Use 86
Table III-9 Disability, by Age 87
APPENDIX
Figure A1 Percent of U.S. Households with a Computer and Internet Access 1994, 1997, 1998,
2000 94
Figure A2 Percent of U.S. Households with a Computer By U.S., Rural, Urban, and Central City
Areas, 1994, 1997, 1998, 2000 94
Figure A3 Percent of U.S. Households with a Computer By Income, By U.S., Rural, Urban, and
Central City Areas, 2000 95
Figure A4 Percent of U.S. Households with a Computer By Race/Hispanic Origin, By U.S.,
Rural, Urban, and Central City Areas, 2000 95
Figure A5 Percent of U.S. Households with a Computer By Income, By Race/ Hispanic Origin,
2000 96
Figure A6 Percent of U.S. Households with a Computer By Education, By U.S., Rural, Urban,
and Central City Areas, 2000 96
Figure A7 Percent of U.S. Households with a Computer By Household Type, By U.S., Rural,
Urban, and Central City Areas, 2000 97
Figure A8 Percent of U.S. Households with Internet Access By U.S. Rural, Urban and Central
City Areas,
1998 and 2000 97
Figure A9 Percent of U.S. Households with Internet Access By Income, By U.S., Rural, Urban,
and Central City Areas, 2000 98
Figure A10 Percent of U.S. Households with Internet Access By Race/Hispanic Origin, By U.S.,
Rural, Urban, and Central City Areas, 2000 98
Figure A11 Percent of U.S. Households with Internet Access By Income, By Race/Hispanic
Origin, 2000 99
Figure A12 Percent of U.S. Households with Internet Access By Education, By U.S., Rural,
Urban, and
Central City Areas, 2000 99
Figure A13 Percent of U.S. Households with Internet Access By Household Type, By U.S.,
Rural, Urban, and Central City Areas, 2000 100
Figure A14 Percent of U.S. Households with Internet Access By Age, By U.S., Rural, Urban, and
Central City Areas, 2000 100
Figure A15 Percent of U.S. Households with High-Speed Internet Access, 2000 101
Figure A16 Percent of U.S. Households with High-Speed Internet Access By Technology and
Age, 2000 101
Figure A17 Percent of U.S. Households with High-Speed Internet Access By Region, 2000 102
Figure A18 Percent of U.S. Households with High-Speed Internet Access By Income, 2000 102
Figure A19 Percent of U.S. Households with High-Speed Internet Access By Education, 2000
103
Figure A20 Percent of U.S. Households with High-Speed Internet Access By Age, 2000 103
Figure A21 Percent of U.S. Households with High-Speed Internet Access By Race/Hispanic
Origin, 2000 104
Figure A22 Percent of U.S. Households with High-Speed Internet Access By Type of Household,
2000 104
Figure A23 Percent of U.S. Persons Using the Internet By Location, 2000 105
Figure A24 Percent of U.S. Persons Using the Internet By Income, By Location, 2000 105
Figure A25 Percent of U.S. Persons Using the Internet By Race/Hispanic Origin, By Location,
2000 106
Figure A26 Percent of U.S. Persons Using the Internet At Home By Race/Hispanic Origin, By
U.S., Rural, Urban, and Central City Areas, 2000 106
Figure A27 Percent of U.S. Persons Using the Internet Outside the Home By Race/Hispanic
Origin, By U.S., Rural, Urban, and Central City Areas, 2000 107
Figure A28 Percent of U.S. Persons Using the Internet By Education, By Location, 2000 107
Figure A29 Percent of U.S. Persons Using the Internet, By Household Type, By Location, 2000
108
Figure A30 Percent of U.S. Persons Using the Internet, By Age, By Location, 2000 108
Figure A31 Percent of U.S. Persons Using the Internet, By Gender, By Location, 2000 109
Figure A32 Percent of U.S. Persons Using the Internet Outside the Home By Selected Places, By
U.S., Rural, Urban, and Central City Areas, 2000 109
Figure A33 Percent of U.S. Persons Using the Internet Outside the Home By Income, By
Selected
Places, 2000 110
Figure A34 Percent of U.S. Persons Using the Internet Outside the Home By Race/Hispanic
Origin, By Selected Places, 2000 110
Figure A35 Percent of U.S. Persons Using the Internet Outside the Home at Schools (K-12) By
U.S., Rural, Urban, and Central City Areas By Race/Hispanic Origin, 2000 111
Figure A36 Percent of U.S. Persons Using the Internet Outside the Home at Work By U.S.,
Rural, Urban, and Central City Areas, By Race/Hispanic Origin, 2000 111
Figure A37 Percent of U.S. Persons Using the Internet Outside the Home By Education, By
Selected
Places, 2000 112
Figure A38 Percent of U.S. Persons Using the Internet Outside the Home By Household Type,
By Selected
Places, 2000 112
Figure A39 Percent of U.S. Persons Using the Internet Outside the Home By Gender, By
Selected
Places, 2000 113
Figure A40 Percent of U.S. Persons Using the Internet Outside the Home By Selected Places, By
Employment Status, 2000 113
Figure A41 Reasons for Households with a Computer/WebTV Not Using the Internet at Home,
By Income, 2000 114
Figure A42 Reasons for Households with a Computer/WebTV Not Using the Internet at Home,
By Race/Hispanic Origin, 2000 114
Figure A43 Reasons for Households with a Computer/WebTV Not Using the Internet at Home,
By Education, 2000 115
Figure A44 Reasons for Households with a Computer/WebTV Not Using the Internet at Home,
By Household Type, 2000 115
Figure A45 Reasons for Households with a Computer/WebTV Not Using the Internet at Home,
By Age, 2000 116
Figure A46 Percent of U.S. Persons Using the Internet At Home By Type of Use, 2000 116
Figure A47 Percent of U.S. Persons Using the Internet At Home By Income, By Type of Use,
2000 117
Figure A48 Percent of U.S. Persons Using the Internet At Home By Race/Hispanic Origin, By
Type
of Use, 2000 117
Figure A49 Percent of U.S. Persons Using the Internet At Home By Education, By Type of Use,
2000 118
Figure A50 Percent of U.S. Persons Using the Internet At Home By Type of Use, By
Employment
Status, 2000 118
Appendix Table 1 Reasons for Discontinuing Home Internet Use, by Selected Characteristics of
Reference Person,
Total, Urban, Rural, Central City, 2000 119
INTRODUCTION
Robert J. Shapiro
Under Secretary for Economic Affairs
Administrator, Economics and Statistics Administration
Gregory L. Rohde
Assistant Secretary for Communications and Information
Administrator, National Telecommunications and Information Administration
This is the fourth report in the Commerce Department series of studies, Falling Through the Net.
The previous three were focused on the theme of the "Digital Divide," the concept that the
society should not be separated into information haves and information have-nots.
With this report, we move into a new phase of our information-gathering and policy-making by
recognizing the phenomenal growth that has taken place in the availability of computing and
information technology tools, tempered by the realization that there is still much more to be done
to make certain that everyone is included in the digital economy. Thus, the theme for this year,
Toward Digital Inclusion, recognizes each element of the equation -- the progress made and the
progress yet to be made.
Measuring the growth and use of the Internet is, like the Internet itself, a complex endeavor. This
report reflects our attempt to capture three of the key benchmarks. Part I looks at Internet and
computer access of households. We do this because the household is the traditional standard by
which access is defined, in the United States and around the world. The examination of
household access includes such factors as geography, income, race, and household type.
In looking at the results and trying to determine the progress from year to year, it is important to
understand that there is more than one way to interpret the results. When looking at computer
and Internet access, it is clear that certain groups have far higher levels of Internet access and
computer ownership. These groups have generally exhibited greater percentage point changes in
their penetration rates from one survey to the next. On the other hand, they exhibit slower
expansion rates from one survey to the next. At the same time, groups with lower penetration
rates are exhibiting smaller percentage point changes but higher expansion rates because they are
starting from a much lower base and have more opportunity for rapid and greater expansion.
Part I also includes a new facet to the survey. For the first time, we survey household access to
high-speed Internet services, primarily through cable TV and Digital Subscriber Line services.
There are large differences in high-speed access based on income and other variables, and these
initial data will enable us to track the increases and diffusion of high-speed access as broadband
infrastructure is widely adopted.
Part II provides a different way of looking at the penetration of Internet access and computers.
Instead of looking at households, this section of the report examines computer and online access
by individuals. Many households, for example, include people who do not use the Internet, and
the rate or degree at which this occurs differs among groups. By focusing on individuals, we are
also able to capture important differences in Internet use based on people's age, gender, and labor
force status. We can also look at how people use the Internet, for example, for e-mail or to look
for a job, as well as where they use it, whether at home or at a library, for example.
Part III, for the first time, examines the use of computers and the Internet among people with
disabilities that adversely affect their ability to walk, to see, to hear, to use their hands and fingers,
or to learn. In general, Internet access is half as common among people with disabilities as among
other people, and computer access is even more skewed. To some degree this may reflect the fact
that on average, disabled people are older and less likely to be employed, and also have lower
incomes than people without disabilities. All of these variables are associated with lower
computer and Internet use.
By preparing and issuing this report, we hope to establish an objective baseline so the American
people can understand the critical issue of access to the information technologies that are
transforming the economy and our lives. In this way, this report can provide a basis for the
continuing public debate about how best to ensure that every American can participate in the
digital economy.
EXECUTIVE SUMMARY
The Internet is becoming an increasingly vital tool in our information society. More Americans
are going online to conduct such day-to-day activities as education, business transactions,
personal correspondence, research and information-gathering, and job searches. Each year, being
digitally connected becomes ever more critical to economic and educational advancement and
community participation. Now that a large number of Americans regularly use the Internet to
conduct daily activities, people who lack access to these tools are at a growing disadvantage.
Therefore, raising the level of digital inclusion by increasing the number of Americans using the
technology tools of the digital age is a vitally important national goal.
This report, Falling Through the Net: Toward Digital Inclusion, is the fourth in the Falling
Through the Net series. In this report, we measure the extent of digital inclusion by looking at
households and individuals that have a computer and an Internet connection. We measure the
digital divide, as we have before, by looking at the differences in the shares of each group that is
digitally connected. For the first time, we also provide data on high-speed access to the Internet,
as well as access to the Internet and computers by people with disabilities.
The data show that the overall level of U.S. digital inclusion is rapidly increasing:
The rapid uptake of new technologies is occurring among most groups of Americans, regardless
of income, education, race or ethnicity, location, age, or gender, suggesting that digital inclusion
is a realizable goal. Groups that have traditionally been digital "have nots" are now making
dramatic gains:
Nonetheless, a digital divide remains or has expanded slightly in some cases, even while Internet
access and computer ownership are rising rapidly for almost all groups. For example, our most
recent data show that divides still exist between those with different levels of income and
education, different racial and ethnic groups, old and young, single and dual-parent families, and
those with and without disabilities.
-- The divide between Internet access rates for Black households and the national average rate
was 18 percentage points in August 2000 (a 23.5% penetration rate for Black households,
compared to 41.5% for households nationally). That gap is 3 percentage points wider than the 15
percentage point gap that existed in December 1998.
-- The Internet divide between Hispanic households and the national average rate was 18
percentage points in August 2000 (a 23.6% penetration rate for Hispanic households, compared
to 41.5% for households nationally). That gap is 4 percentage points wider than the 14
percentage point gap that existed in December 1998.
-- With respect to individuals, while about a third of the U.S. population uses the Internet at
home, only 16.1% of Hispanics and 18.9% of Blacks use the Internet at home.
-- Differences in income and education do not fully account for this facet of the digital divide.
Estimates of what Internet access rates for Black and Hispanic households would have been if
they had incomes and education levels as high as the nation as a whole show that these two
factors account for about one-half of the differences.
-- The August 2000 divide between Black households and the national average rate with regard to
computer ownership was 18 percentage points (a 32.6% penetration rate for Black households,
compared to 51.0% for households nationally). That gap is statistically no different from the gap
that existed in December 1998.
-- Similarly, the 17 percentage point difference between the share of Hispanic households with a
computer (33.7%) and the national average (51.%) did not register a statistically significant
change from the December 1998 computer divide.
30.0% for female-headed households). In central cities, only 22.8% of female-headed households
have Internet access.
Americans are using the Internet in the following ways:
Internet access is no longer a luxury item, but a resource used by many. Overall, the findings in
this report show that there has been tremendous progress in just 20 months, but much work
remains to be done. Computer ownership and Internet access rates are rapidly rising nationwide
and for almost all groups. Nonetheless, there are still sectors of Americans that are not digitally
connected.
PART I
HOUSEHOLD ACCESS TO COMPUTERS AND THE INTERNET
Americans bought home computers and hooked them up to the Internet at a remarkable rate
between December 1998 and August 2000. In just 20 months, the share of households with
Internet access soared by 58%, from 26.2% to 41.5%, while the share of households with
computers rose from 42.1% to 51.0%.(1) More than 80% of households with computers also have
Internet access today, up from little more than 60% in 1998.
Virtually every group has participated in the sharp upward trend of Americans connecting their
homes to the Internet. Large gains occurred at every income category, at all education levels,
among all racial groups, in both rural and urban America, and in every family type. As
documented since 1997, certain groups are much further ahead than others in establishing Internet
connections from home. This year, however, we found that households in the middle income and
education ranges are gaining ground in connecting to the Internet at a rate as fast or faster than
those at the top ranges.
The rapid growth in computer and Internet use among those in the middle income and education
ranges and among relatively disadvantaged populations suggests that, in some cases, the digital
divide has begun to narrow or will do so soon, and that we are entering a period of fuller digital
inclusion. In general, groups with very low adoption levels in 1998 experienced some of the
highest expansion or growth rates over the last two years, even though they may not have
experienced a high percentage-point change.(2) (See Tables I-1 and I-2 on pages 30 and 31.)
This section of the report examines the prevalence of households with home computers and
Internet access by various demographic and geographic breakdowns, and also discusses reasons
why some households with computers chose not to go online. We also look at the penetration of
higher speed Internet access. Although still modest -- 11% of Internet users and 4% of all
households -- these broadband connectivity rates establish a benchmark for future comparisons.
OVERALL HOUSEHOLD FINDINGS: THE NATION MOVES TOWARD
DIGITAL INCLUSION
Between December 1998 and August 2000, U.S. households' access to computers and the
Internet grew dramatically. According to the latest survey, 43.6 million households (or 41.5% of
all households) had Internet access.(3) The percentage of homes with household Internet access
registered an impressive 58% gain from the 26.2% penetration rate in December 1998.
Computer ownership has also continued to soar. In August 2000 53.7 million households had
computers. The percentage of homes with computers rose by 21%, from 42.1% to 51.0%, from
December 1998 to August 2000. Taking a slightly longer view, since 1997, computer penetration
has risen by almost 40%, while Internet access has soared by 123%.
The rapid uptake of the Internet is perhaps best revealed by examining the growing percentage of
households with computers or other devices that connect to the Internet. In 1997, just over half
of all households with computers had Internet access. By 2000, that figure had surged to four out
of five households.
DIGITAL INCLUSION PROCEEDS UNEVENLY
The tremendous growth in household computer and Internet use has occurred across all
demographic groups, including income and education levels, races, locations, and household
types. Nevertheless, some Americans are still connecting at far lower rates than others, creating a
digital divide (i.e., a difference in rates of access to computers and the Internet) among different
demographic groups.
Certain groups (such as Whites, Asian Americans and Pacific Islanders, and those with higher
income and education levels) have higher than average levels of computer ownership and Internet
access. These groups have generally exhibited greater percentage point changes (that is, the
change in penetration rate from one survey to the next). On the other hand, they exhibit slower
expansion or growth rates (i.e., growth in the percentage rate). At the same time, groups with
lower penetration rates (such as Blacks, Hispanics, and those with lower income and education
levels) are exhibiting smaller percentage point changes but higher expansion rates because they
are starting from a much lower base and have more opportunity for rapid, and greater, expansion.
For example, a group that had a penetration rate of 10% in December 1998 and 20% in August
2000 would exhibit a 100% expansion rate but only a 10 percentage point change.
A case in point centers on households with both high income and high education levels. These
households made substantial percentage point gains in Internet access over 20 months. They had
already achieved relatively high levels of penetration by December 1998. Their expansion rates
since that date, however, have been matched or surpassed by those with mid-range incomes and
levels of education.
The pattern exhibited thus far by household access to both computers and the Internet accords
with the "S-curve" pattern typically observed in the adoption of new technologies. Historically,
when a new technology is first introduced, the number of users expands rapidly but from a low
base. Over time, as a group reaches the middle range of the S-curve, the growth rate tends to
slow while the point change continues to increase. Once the penetration nears its saturation point
(at the higher end of the S-curve), both the percentage point change and the expansion rate begin
to decrease.
The adoption rates along these curves depend on a number of factors, including the awareness of
the new technology, the affordability of that technology, adaptations to the technology to widen
its potential market, and the attraction for people to use the technology as its usage becomes
widespread. The purchase of computers for the home has been spurred not only by falling prices
and more user-friendly software, but also by public policy decisions not to regulate or otherwise
impede the rapid expansion of the Internet. For Internet access itself, the continuation of public
policies to promote competition (that lowers prices and improves quality) and to make new
technologies more accessible will substantially influence the uptake rates of the current groups of
information "have-nots," and will help move these groups to greater digital inclusion.
Below we examine variations in household Internet and computer access, looking at differences in
geography, income, race/ethnicity, education, and household type.
GEOGRAPHY
One of the most dramatic shifts that has occurred since December 1998 has been the increase in
Internet access by rural households. Rural areas narrowed the divide when compared to the
national average. In contrast, central cities had significant increases in access, but fell behind
other parts of the country in terms of the gains in access. Urban areas, even though they include
central cities, continue to have a greater percentage of households with Internet penetration than
rural areas.(4) Data relating to Internet access by geography can be found in the Appendix,
Figures A8-A10, A12-A14.
Rural Households Narrow the Gap
Rural households, which historically trailed those in central cities and urban areas, are showing
significant gains in Internet access. The gap between households in rural areas and households
nationwide that access the Internet has recently narrowed. There was a 4.0 percentage point
difference in 1998, narrowing to a 2.6 point difference in 2000.
In rural areas this year, 38.9% of households had Internet access, an increase of 75% from 1998's
access rate of 22.2%. In October 1997, just 14.8% of rural households had online access.
Rural Black households, which have historically had the lowest rates of Internet access, made
significant gains. In December 1998, 7.1% of those households had Internet access. By 2000,
the figure jumped to 19.9%.
The growth in rural Internet household access has come at all income levels, with the lowest
levels showing some of the highest growth rates. As a result, the Internet access rates for rural
households now approximate those of households across the country.
In the lowest income category, households with income below $15,000, Internet access for rural
households rose from 4.6% to 11.3%. At most of the other income levels, rural households now
come close to the nationwide figures, having doubled their access rates through the middle
income levels. Growth rates have been slower at the highest income levels, but the access rates
are only slightly below the national average.
Slower Growth in Central Cities
In contrast to the strong growth in rural areas, households in central cities have experienced much
lower rates of increase for their Internet penetration. In August 2000, 37.7% of central city
households had Internet access, contrasted with the national figure of 41.5%-a gap of 3.8
percentage points. In December 1998, central city households had a 24.5% access rate, 1.7
percentage points lower than the national rate. In terms of the national figures, the gap appears
to be growing, rather than narrowing, and central cities have slipped below the rural areas in
terms of household access.
Although households in central cities experienced double-digit growth in household Internet
access, their access rate was below that of the national average. The increase for central city
households from December 1998 to August 2000 was 13.2 percentage points (an expansion of
54%). This compares to an increase over the 14 months between the 1997 and 1998 surveys of
7.2 points (a growth rate of 42%).
Every income category for central city households showed double-digit percentage growth
between 1998 and 2000. At the lowest income level, below $15,000, household Internet access
nearly doubled, from 7.7% in 1998 to 13.5% in 2000 (an increase of 75%).
Black households in central cities registered a 20.1% access rate, about double the 1998 rate of
10.2%, but slightly below the national average for Blacks of 23.5%. The Hispanic households in
central cities had a 21.5% access rate, a little more than double the 1998 figure of 10.2%, but
slightly below the national average for Hispanic households of 23.6%.(5) White central city
households had a 47.1% Internet access rate, up from 32.3% in December 1998.
Urban Areas Continue Above-Average Internet Access
Urban areas continue to have the highest household Internet penetration rates. The rate of
growth in household Internet access in urban areas between 1998-2000 was about the same as it
was for central cities, about 57%. However, the level of Internet access in urban areas started
from a high level, and continues to exceed the national average.
In urban areas, 42.3% of households had Internet access, contrasted with 41.5% of households
nationally in 2000. Urban households have seen a steady increase over the last three years. In
1997, the Internet penetration rate for urban households was 19.9%. It grew to 27.5% in 1998.
The lowest income levels saw a 72% increase between 1998 and 2000, which translated to a 5.5
percentage point increase to the current level of 13.2% access for households with incomes under
$15,000. The $75,000+ category had a household access rate of 78.0%, the highest single
category rate for the geographic regional breakdown.
Each racial and ethnic group had higher household Internet penetration rates in urban areas than
in rural areas. Urban Black households registered a 24.0% access rate, up from 11.7% in
December 1998, and contrasted with the rural figure of 19.9% for Black households. Hispanic
households had a 23.9% rate, up from 12.9% in December 1998, and above the 19.9% rural rate
for Hispanic households. The White household rate in urban areas was 48.3%, up from 32.4% in
December 1998, and above the national average of 46.1%.
Snapshot from Geographical Regions
The West continues to be the most on-line region of the country, with household Internet access
of 46.6%, followed by the Northeast (43.0%), Midwest (40.9%), and South (37.9%). Rural
areas in the Northeast registered the highest access rate (49.9%), followed by urban areas in the
West (47.2%). Northeast central city regions had the lowest household access rate (33.1%),
followed by rural regions in the South (33.8%).
Computer Ownership by Geography
Nationally, just over half (51%) of households own computers, up from 42.1% in December
1998. Urban areas had the highest rate of ownership (51.5%), increasing 8.6 points in the last 20
months. Rural areas, tracking the growth in Internet access, increased 9.7 percentage points, to
reach a household ownership level of 49.6%. Central cities had a 46.3% ownership rate, up 7.8
points since December 1998. All data relating to computer ownership by geography can be found
in the Appendix, Figures A2-A4, A6-A7.
Households in all regions at all income levels also showed improvement in computer ownership.
In both central cities and in urban areas, 20% of households with less than $15,000 in income now
own computers, contrasted with 17% of rural households in the same income bracket. Nationally,
19.2% of households with less than $15,000 owned a computer in August 2000, up from 14.5%
in December 1998.
INCOME
Although computers and Internet access are coming down in price, they are still sufficiently
expensive that household income remains an important factor in home Internet access.
Nevertheless, households across all income levels and throughout the country have made
significant gains in Internet access since December 1998. Some of the biggest gains have come at
every income level in rural areas. In addition, gains have been made at all income levels by
different racial and ethnic groups. Data relating to Internet access by income can be found in the
Appendix, Figures A9 and A11.
Internet Penetration Rises Across Income Levels
Household Internet access continues to correlate closely with income. Across the United States,
however, households in the lower income bands registered increases in Internet access much
faster than the national 58% gain. Households with less than $15,000 in income had a 12.7%
Internet penetration rate, 79% higher than in December 1998.(6) Between 1997 and 1998, the
income band improved 82%, from 3.9% penetration to 7.1%. At the $15,000-$24,999 income
levels, 21.3% of households had Internet access. The rate of increase between 1998 and 2000
was 93%, as the penetration rate increased steadily from 8.1% in 1997, to 11.0% in 1998, to
21.3% in 2000. In August 2000, the penetration rate for households with incomes between
$25,000 and $34,999 stood at 34.0%, an increase of 78% over the 19.1% penetration rate in
1998.
All three income ranges beyond $35,000 had the same 17 point gain from 1998 to 2000.
Households with income between $35,000 and $49,999 achieved a 46.1% Internet penetration
rate in 2000, up from 29.0% in 1998. Households with incomes between $50,000 and $74,999
went from 43.9% to 60.9%, while those at $75,000 and above climbed from 60.3% to 77.7%.
With the same point gain but starting from much lower initial levels, the $35,000-$49,999 and the
$50,000-$74,999 income groups had larger expansion rates than the highest income group.
Geographic Areas Show Different Rates of Increase
Different areas of the country showed different rates of growth in household Internet penetration
at incomes below $75,000. At the highest income level ($75,000 and higher) household
penetration was relatively equal in all geographic areas at 77%.
For households earning less than $15,000 annually, rural households had the lowest penetration
rate at 11.3%. However, that rate is more than double what it was for the same group of
households in 1998 (at 4.5%). In other locations, however, the household penetration rate for the
lowest income group is higher, even if the rate of growth is lower. In urban areas, for example,
13.2% of lowest-income households had Internet access, an increase of 5.5 percentage points
(72% higher than 1998 levels). Central city households with incomes below $15,000 achieved a
13.5% penetration rate in 2000, a 75% increase from 1998.
Rural areas at all income levels showed the highest percentage increases in penetration rates. In
addition to the 146.5% for the lowest income group, households with incomes between $15,000
and $24,999 achieved increases of almost 120%. Increases in Internet access across all income
levels in other areas were lower, but all showed improvement. In urban areas, for example,
Internet access among households with incomes between $15,000 and $24,999 grew 87% in 2000
over their 1998 access rates. Central city households, however, had lower increases than rural
areas. The household income brackets with the highest percentage increases were the group with
less than $15,000 income, which achieved a 75% increase, to a 13.5% penetration level, and the
group between $15,000 and $24,999, which had a 61% increase, achieving a 20.7% access level
for 2000.
Low-Income Households Show Computer Ownership Gains
Almost one-fifth (19.2%) of households in the lowest income bracket (under $15,000 per year)
now own computers, an increase of 4.7 percentage points from the 14.5% figure in December
1998. Overall, households at the lowest income levels increased their ownership of computers by
approximately one-third in August 2000 over the December 1998 levels.
At other income levels, 30.1% of households in the $15,000-$24,999 bracket had computers in
2000, a 27% increase over 1998. The next fastest growing income bracket for computer
penetration was $25,000-$34,999. In that group, 44.6% of households owned a computer, an
increase of 25% from the 35.8% penetration rate in 1998. In August 2000, 17.0% of rural
households at the lowest income level owned a computer, contrasted with 19.9% of households
with less than $15,000 income in urban areas and in central cities.
At income levels of more than $75,000, 86.3% of households had a computer, up from 79.9% in
1998. The ownership rate in central cities (83.7%) trailed the national average at that income.
For all three income categories above $35,000, rural households were as likely as their urban
peers to have a computer at home.
Data relating to computer ownership by income can be found in the Appendix, Figures A3 and A5.
EDUCATION
Home computer and Internet access rates vary by the education level of the reference person or
householder (a person residing in the housing unit who owns it or is responsible for its rent).
Better educated adults are more likely to use and become familiar with computers and the Internet
at work or through their school experiences. In December 1998, 53.0% of households headed by
a person with education beyond college had Internet access. That surpassed the access rate for
households headed by a person with a bachelor's degree (46.8%), those with some college
experience (30.2%), those with some college experience (16.3%), and those with less than a high
school diploma (5.0%).
The same patterns existed in August 2000, although rates have soared for all educational levels in
the last 20 months. Of households headed by someone with post-college education, 69.9% had
Internet access. That compares to households headed by someone with a college degree alone
(64.0%), those with some college experience (49.0%), those educated beyond high school but no
college degree (29.9%), and those with less than a high school degree (11.7%).
The 1998-2000 expansion rates were highest for those at lower levels of education. For example,
Internet access expanded by 135% for those with less than a high school education, by 62% for
those with some college, and by 32% for those with post college education.
The median level of education among adult family heads is some college. This group had a larger
point gain over the last 20 months 19 points than households in the two higher education
categories with 17 point gains each. Data relating to Internet access and computer ownership by
education level can be found in the Appendix, Figures A6 and A12.
The interplay between education and income levels is worth examining more closely. Although
both of these factors correlated with Internet access, as we have seen, they are also linked to each
other. In terms of home Internet access rates, the ratio of the highest group to the lowest is more
than five to one for both the income and education categories in Table I-2. Since the two are so
correlated, we have examined whether just one factor is dominant and the other represents a
misleading correlation, or whether both are independently associated with Internet access.
Figure I-9 presents some evidence that both income and education are independently associated
with Internet access. Although the average Internet access rate for incomes of $75,000 and
greater is 77.7%, it ranges from 82% for those with a college degree or more down to 51% for
those with less than a high school education. Likewise, households with incomes between
$15,000 and $34,999 had an average access rate of 28%, ranging from 46% for college or more
down to 11% for less than high school. The same wide disparities occur within education
categories. For example, among households in which the householder had some schooling
beyond high school but not a college degree, home Internet access reached 76% in the over
$75,000 income group but only 26% in the under $15,000 income group. Among households
with incomes below $15,000 and less than a high school education, only 4% had Internet access
at home.
Once again, groups with higher initial penetration rates generally had large point gains but lower
than average expansion rates, as shown in Table I-2. Those with the lowest incomes and
education had much lower initial home Internet rates in 1998; however, they had the largest
expansion rates. Although the expansion rate for the country was 58%, no group with post high
school education and incomes above $35,000 had expansion rates that large. Among those with
at least a college degree, only those with the lowest household incomes had expansion rates above
the national average.
The largest point gains (between 20 to 22 points) were registered by those with incomes above
$75,000 and less than a college degree and those with $35,000 to $74,999 in income and some
college education. Indeed, households with incomes more than $75,000 and at least a college
degree have reached the flattening stage of the "S-Curve." Their 16.3 point gain leaves that
group so close that they would hit 100% in less than two years if they continued at the recent
pace.
RACE AND ETHNICITY
Between December 1998 and August 2000, there has also been a surge in uptake of Internet and
computer access among households of different ethnic and racial origins.
Households of Asian Americans and Pacific Islanders have maintained the greatest Internet
penetration at 56.8% in 2000. This group has also experienced the most dramatic growth in
home Internet access in the last two years: an increase of 20.8 percentage points (from 36.0% in
1998). White households continued to have the second highest rate of access at 46.1% and
experienced a growth of 16.3 percentage points (from 29.8% in 1998).
At the other end of the spectrum, Black and Hispanic households continue to experience the
lowest Internet penetration rates (at 23.5% and 23.6%, respectively). Internet uptake by Black
and Hispanic households has been strong in the last two years, however, as shown in Figure I-11.
Between December 1998 and August 2000, access among Black households doubled from 11.2%
in 1998 to 23.5% in 2000, a gain of 12.3 percentage points. Hispanic households' access
increased 11 percentage points (from 12.6% in 1998 to 23.6% in 2000).
There is significant variation in Internet access and computer ownership within subgroups of these
broad categories. For example, although Asian Americans and Pacific Islanders have high rates of
connectivity as a group, there are subgroups that have lower rates of access due to lower income
levels, educational attainment, or other reasons. By the same token, Blacks and Hispanics have
high levels of connectivity despite lower rates overall.
This report does not include separate data on American Indians, Aleuts, and Eskimos (AIAE)
because the sampled population from that group is too small for credible results.(7)
Although the percentage point change for Blacks and Hispanics was not as high as that for Asian
Americans and Pacific Islanders or Whites, their rates of growth between 1998 and 2000 were
striking. Internet access among Black households more than doubled (a 110% increase) between
1998 and 2000, while Hispanic households' access grew 87% in the same period. This compares
to a growth rate of 55% for White households and 58% for Asian American and Pacific Islanders
households.
Internet access among racial and ethnic groups continues to differ by geography and income level.
With regard to geography, almost all groups have a slightly higher Internet penetration rate in
urban areas (48.3% for Whites, 24.0% for Blacks, and 23.9% for Hispanics). Groups in rural
areas, on the other hand, have experienced significantly lower penetration rates (40.9% for
Whites, and 19.9% for Blacks and Hispanics). The survey's sample of rural Asian Americans and
Pacific Islanders is too small for valid comparisons with their urban counterparts.
Income also affects whether households of different ethnic and racial backgrounds have Internet
access. Households earning above $75,000 are highly likely to have Internet access (78.6% for
Whites, 70.9% for Blacks, 63.7% for Hispanics, and 81.6% for Asian Americans and Pacific
Islanders). The rates of connectivity decline significantly as income declines, although less so for
Asian Americans and Pacific Islanders households. While Hispanics and Blacks are particularly
unlikely to have Internet access at incomes below $15,000 (5.2% and 6.4%, respectively), 33.2%
of Asian Americans and Pacific Islanders households in that lowest income bracket have Internet
access.
Because income and education are so highly correlated with whether households have Internet
access, the question arises as to whether those factors might fully explain the observed gaps
between the national average and the rates for Blacks and Hispanics. Those two groups as a
whole have lower incomes and lower education levels than the national average.
Differences in overall income and educational levels of Blacks and Hispanics do not fully account,
however, for their lower levels of home Internet access. After adjusting for the effects of lower
average income and educational attainment with shift-share analysis,(8) we observe that: (1)
roughly half of the gap remains; (2) both groups made roughly the same gains over the last 20
months as the national average; and (3) both groups, on this adjusted basis for August 2000, had
substantially surpassed the national average for December 1998. Figure I-12 depicts the results of
this shift-share analysis. In August 2000, both Blacks and Hispanics had home Internet access 18
points below the national average. The effects of having levels of income and education lower
than the national average, however, accounted for 8 percentage points of the gap for Blacks and
for 11 percentage points of the gap for Hispanics.
Over the 20 months from December 1998 to August 2000, the share of homes online rose by 12
points for Blacks, by 11 points for Hispanics and by 15 points for the country as a whole.
However, on an income- and education-adjusted basis, Blacks and Hispanics each rose by 14
points, which is essentially equivalent to the national gain. The 32% penetration rates for Blacks
and the 35% for Hispanics on an adjusted basis for August 2000, while far short of the national
average of 42%, were both well above the national rate of 26% in December 1998.
Data relating to Internet access among households of different races and ethnic origins can be
found in the Appendix, Figures A10-A11.
The Internet Divide Continues
Substantial disparities have continued to widen, both when comparing Blacks and Hispanics
against the national average and when comparing them against Whites. The divide between the
Black household Internet access rates and the national average rate increased 3.0 percentage
points, from 15.0 percentage points in December 1998 to 18.0 percentage points in August 2000.
The divide between Hispanic households and the national average rate increased 4.3 percentage
points, from 13.6 percentage points in December 1998 to 17.9 percentage points in August 2000.
A similar widening occurred between racial groups. Between October 1997 and December 1998,
the gap between White and Black households grew 5.1 percentage points, from a 13.5 percentage
point difference in 1997 to a 18.6 percentage point difference in 1998. In the 20- month period
between December 1998 and August 2000, the divide between White and Black households
increased 4 percentage points, resulting in a percentage point difference of 22.6 points between
White and Black households. The gap between White and Hispanic households grew 4.7
percentage points between 1997 and 1998, and then continued to widen even further (by 5.3
percentage points) between 1998 and 2000.
Between Asian Americans and Pacific Islanders and Whites, the gap grew from 6.2 percentage
points in 1998 to 10.7 percentage points in 2000. No 1997 data are available for Asian
Americans and Pacific Islanders.
While this measure of the Internet divide continued to widen, the high rates of expansion for
Blacks and Hispanics suggest that, in time, this widening will subside. If computer ownership
provides any pattern, we may soon see some stabilization and perhaps even narrowing of the
Internet divide.
The Computer Divide Has Stabilized
Households of different ethnic and racial backgrounds also had disparate rates of ownership of
computers. As with Internet access, households of Asian Americans and Pacific Islanders
continue to exhibit the highest penetration rates (65.6%), followed by White households (55.7%),
Hispanics (33.7%), and Blacks (32.6%).
All ethnic groups experienced comparable increases in computer penetration since 1998:
ownership in 2000 was 10.6 percentage points higher for Asian Americans and Pacific Islanders,
9.4 percentage points higher for Blacks, 9.1 points higher for Whites, and 8.2 points higher for
Hispanics.
As with Internet access, computer ownership is strongly influenced by income. Households
earning more than $75,000 are consistently likely to own computers: 87.0% for White
households, 86.9% for those of Asian Americans and Pacific Islanders, 83.4% for Blacks, and
76.1% for Hispanics. The computer divide becomes more pronounced at lower income levels,
although less so for households of Asian Americans and Pacific Islanders. At incomes less than
$15,000, Black households and Hispanic households are particularly unlikely to have computers
(11.5% and 12.5%), compared to White households (22.8%) and Asian American and Pacific
Islander households (39.4%).
Geography also plays a role in a household's likelihood of owning a computer. In general, those
in rural areas are less likely to own computers (51.8% for Whites, 28.8% for Hispanics, and
27.5% for Blacks), while households in urban areas exceed the national average (57.3% for
Whites, 34.2% for Hispanics, and 33.3% for Blacks).
Perhaps most significantly, the data show that digital divide regarding computer penetration has
stabilized. Large gaps remain between the share of Black and Hispanic households with a
computer and the national average, but the gaps did not widen from 1998 to 2000. The divide
between the percent of Black households with a computer and the national average rate declined
0.5 percentage points, from 18.9 percentage points in December 1998 to 18.4 percentage points
in August 2000. The divide between the percent of Hispanic households with a computer and the
national average rate increased 0.7 percentage points, from 16.6 percentage points in December
1998 to 17.3 percentage points in August 2000.
Because computer penetration for White, Black, and Hispanic households increased by
comparable amounts, the gaps in computer penetration when comparing these groups of
households have also stabilized. The gaps widened from 1994 to 1998, but did not widen further
from 1998 to 2000.
Data relating to computer ownership among households by race and ethnic origin can be found in
the Appendix, Figures A4-A5.
HOUSEHOLD TYPE
The makeup of a household -such as the presence or absence of children, and whether there are
one or two parents- is also associated with that household's likelihood of having computer and
particularly Internet access. Even here, however, single-parent households have made great
strides since December 1998, and are catching up to dual-parent households at higher income
levels. Data relating to Internet access and computer ownership by household type can be found
in the Appendix, Figures A7 and A13.
Internet Access is Highest for Households with Two Parents, Although Single Parent Households
are Making Gains
Households with two parents and children have much higher rates of Internet access than other
family types. As in 1998, married couples with children under 18 are far more likely to have
Internet access (60.6%) than married couples without children (43.2%). This high connectivity
rate for couples with children holds true regardless of whether they live in urban areas (61.5%),
rural areas (58.3%), or central cities (55.1%). Those in "non-family households" (single or
unmarried people), on the other hand, are the least likely to have Internet access (at 28.1%). Of
all household types, non-family households in rural areas are the least likely to have Internet
access (20.2%).
Having one or two parents is also related to whether a family has Internet access. Two-parent
households are nearly twice as likely to have Internet access as single-parent households (60.6%
for dual-parent, versus 35.7% for male-headed households with children less than 18 years of age,
and 30.0% for female-headed households with children less than 18 years of age). Female-headed
households in central cities are particularly unlikely to have Internet access (22.8%), as are male-headed households in rural areas (30.3%).
The differences among household types are most distinct at the middle income levels. At incomes
below $15,000, on the other hand, the disparities diminish somewhat: 19.7% for dual-parent
households; 14.5% for male-headed households; 12.6% for female-headed households; 13.5% for
family households without children; and 11.4% for non-family households. Similarly, the gap
narrows at incomes above $75,000: 84.4% for dual-parent households; 69.4% for male-headed
households; 67.9% for female-headed households; 74.5% for family households without children;
and 68.4% for non-family households.
While single parents trail significantly behind two-parent households in Internet access, they have
shown the most change since 1998. Connectivity among female-headed households doubled
between 1998 and 2000 (from 15.0% to 30.0%). Connectivity among male-headed households
also grew substantially (by 83%) from 19.5% in 1998 to 35.7% in 2000. In time then, the gap
between single and dual-parent households may close, as is already becoming apparent at the
highest income level.
Computer Penetration Highest for Dual-Parent Households at Highest Income Level
As with Internet access, computers are far more likely to be in households with children and two
parents. Married couples with children under 18 years of age own computers at much higher
rates (73.2%) than married couples without children (52.5%), male-headed households (45.6%),
female-headed households (42.9%), or "non-family" (single or unmarried) households (34.6%).
Despite these differences, the disparities among these groups are less dramatic than with Internet
access, perhaps because computers are more prevalent as an older and more widely-adopted
technology. As with Internet access, single-parent families have also shown the greatest rate of
growth in the last two years (30.3% for male-headed households, and 35.3% for female-headed
households), suggesting that the gap between dual-parent and single-parent families may begin to
close in time.
Again, we find differences by location. Female-headed households and male-headed households
in central cities are much less likely to own computers (34.9% and 43.1%, respectively) than
those in rural or urban areas. By contrast, computer penetration declines in rural areas for
households without children (48.0% for family households without children, and 26.2% for
single/unmarried households).
Computer ownership also varies by income. Particularly notable is the high penetration rate of
computers in families earning $75,000 or more. Dual-parent families in this high-income bracket
have a 93.1% penetration rate. That is, nearly every household falling into this group has a
computer. Computer penetration is also high for other household types at this income level:
84.2% for male-headed households; 82.3% for female-headed households; 82.8% for households
without children; and 76.6% for non-family households.
Computer penetration drops dramatically at the lowest income levels for almost all households
types. The significant exception is for married couples with children: one-third (33.3%) of these
families still own computers even at incomes below $15,000. This relatively high penetration rate
suggests that computers are becoming an affordable and desirable purchase for many families,
even for those in the lowest income bracket.
HOUSEHOLDS WITH COMPUTERS AND INTERNET ACCESS BY STATE
The figures on home computer and Internet access at the state level also show wide disparities but
remarkably strong growth throughout the country. (Tables I-A and I-B) The gap between the top
tier of states and the bottom tier has narrowed for computers and it has remained roughly stable
for Internet access.
In December 1998, computer ownership ranged from percentages in the low 60s for the top tier
of states to the 26% to 28% range for the bottom tier of states. By August 2000, a few states had
reached computer ownership percentages in the mid-60s while no state was estimated to have
fewer than 37% of homes with computers. Thus, the range between the highest states and the
lowest states narrowed by about 10 percentage points, from the high 30s to the high 20s.
Internet penetration rates for December 1998 were estimated as low as the 14% to 18% range
(Arkansas, Mississippi, Louisiana, and West Virginia), while four states (Colorado, New
Hampshire, Utah, and Washington) had reached the 35% to 37% range. Alaska was even
estimated at 44%. By August 2000, estimates for six states had reached at least 50% (Alaska,
Colorado, Connecticut, Delaware, New Hampshire, and Oregon) and only two states were
estimated below 30% (Arkansas and Mississippi). As found for the groups with the lowest
penetration rates in terms of income, education, and race/ethnicity, some of the lowest state
penetration rates were found to have doubled over this 20 month period.
Table I-A. Percent of Households with Computers, by State: 2000
(Numbers in thousands.)
Table I-B. Percent of Households with Internet Access, by State: 2000
(Numbers in thousands.)
State
Total Households
Percent with
90% Confidence
Alabama
1,742
44.2
2.83
Alaska
219
64.8
2.96
Arizona
1,832
53.5
2.70
Arkansas
1,041
37.3
2.72
California
12,129
56.6
1.20
Colorado
1,636
62.6
2.73
Connecticut
1,235
60.4
3.29
Delaware
290
58.6
3.21
Florida
6,235
50.1
1.48
Georgia
3,066
47.1
2.52
Hawaii
386
52.4
3.61
Idaho
491
54.5
2.71
Illinois
4,566
50.2
1.74
Indiana
2,347
48.8
2.86
Iowa
1,136
53.6
2.95
Kansas
1,010
55.8
2.96
Kentucky
1,614
46.2
2.82
Louisiana
1,650
41.2
2.78
Maine
508
54.7
3.13
Maryland
2,076
53.7
3.04
Massachusetts
2,407
53.0
2.17
Michigan
3,709
51.5
1.86
Minnesota
1,799
57.0
2.91
Mississippi
1,059
37.2
2.81
Missouri
2,155
52.6
2.98
Montana
360
51.5
2.79
Nebraska
637
48.5
3.04
Nevada
690
48.8
2.99
New Jersey
3,091
54.3
1.92
New York
6,971
48.7
1.34
New Hampshire
474
63.7
3.22
New Mexico
667
47.6
2.89
North Carolina
3,047
45.3
2.07
North Dakota
246
47.5
3.01
Ohio
4,351
49.5
1.81
Oklahoma
1,338
41.5
2.69
Oregon
1,280
61.1
2.99
Pennsylvania
4,720
48.4
1.68
Rhode Island
402
47.9
3.23
South Carolina
1,557
43.3
2.98
South Dakota
289
50.4
2.87
Tennessee
2,220
45.7
2.90
Texas
7,353
47.9
1.52
Utah
707
66.1
2.76
Vermont
242
53.7
3.21
Virginia
2,722
53.9
2.74
Washington
2,323
60.7
2.93
Washington, DC
254
48.8
2.97
West Virginia
744
42.8
2.65
Wisconsin
2,031
50.9
2.86
Wyoming
193
58.2
2.91
State
Total Households
Percent with Internet
90% Confidence
Alabama
1,742
35.5
2.73
Alaska
219
55.6
3.08
Arizona
1,832
42.5
2.68
Arkansas
1,041
26.5
2.49
California
12,129
46.7
1.21
Colorado
1,636
51.8
2.82
Connecticut
1,235
51.2
3.37
Delaware
290
50.7
3.26
Florida
6,235
43.2
1.46
Georgia
3,066
38.3
2.46
Hawaii
386
43.0
3.58
Idaho
491
42.3
2.69
Illinois
4,566
40.1
1.71
Indiana
2,347
39.4
2.79
Iowa
1,136
39.0
2.88
Kansas
1,010
43.9
2.96
Kentucky
1,614
36.6
2.72
Louisiana
1,650
30.2
2.59
Maine
508
42.6
3.11
Maryland
2,076
43.8
3.03
Massachusetts
2,407
45.5
2.16
Michigan
3,709
42.1
1.84
Minnesota
1,799
43.0
2.91
Mississippi
1,059
26.3
2.56
Missouri
2,155
42.5
2.95
Montana
360
40.6
2.74
Nebraska
637
37.0
2.93
Nevada
690
41.0
2.94
New Hampshire
474
56.0
3.33
New York
6,971
39.8
1.31
New Jersey
3,091
47.8
1.92
New Mexico
667
35.7
2.78
North
3,047
35.3
1.99
North Dakota
246
37.7
2.93
Ohio
4,351
40.7
1.78
Oklahoma
1,338
34.3
2.59
Oregon
1,280
50.8
3.07
Pennsylvania
4,720
40.1
1.64
Rhode Island
402
38.8
3.15
South
1,557
32.0
2.81
South Dakota
289
37.9
2.78
Tennessee
2,220
36.3
2.80
Texas
7,353
38.3
1.48
Utah
707
48.4
2.92
Vermont
242
46.7
3.22
Virginia
2,722
44.3
2.73
Washington,
254
39.6
2.90
Washington
2,323
49.7
3.00
West Virginia
744
34.3
2.54
Wisconsin
2,031
40.6
2.81
Wyoming
193
44.1
2.93
A NEW DIMENSION: HIGH-SPEED INTERNET ACCESS One of the bonanzas of rapid technological change has been the development of infrastructure
featuring wider bandwidth and faster transmission speeds. This diffusion of the higher-speed
access services, generally classified as "broadband," has only just begun.(9) This year's report
presents the results from the first systematic data collection on user access to high-speed
broadband service that has been undertaken in a large scale personal interview survey with a very
high response rate.(10)
In August 2000, 10.7% of online households (about 4.5% of all U.S. households) had broadband-speed access. The remaining 89.3% of online households (37.0% of all U.S. households) connect
to the Internet by regular dial-up phone service.
Among total broadband households, the overwhelming majority either procure cable modems
(50.8%) or DSL (33.7%) (See Figure I-15). Wireless and satellite (4.6%) and other telephone-based technologies such as ISDN (10.9%) account for much lower percentages. Broadband
preferences can vary, however, by demographic characteristics. For example, the youngest
householders prefer DSL (50.1%) over cable modems (42.7%), whereas other age groups use
relatively more cable modems than DSL. Location also matters: in central cities, DSL (38.2%)
and cable modem (44.2%) penetrations are relatively close; this contrasts with urban broadband
households (which includes central cities and the suburbs), where the cable modem rate (51.1%)
significantly exceeds that for DSL (33.6%). Regions also produce some wide variations. For
example, the West demonstrates a balance between its DSL (43.1%) and cable modem (41.9%) diffusion; this contrasts with the
Northeast's clear preference for cable modems (62%) over DSL (24.5%).(11)
Broadband penetration differs by location as shown in Figure I-16: central city (12.2%) vs. urban
(11.8%) vs. rural (7.3%) vs. U.S. (10.7%). Regional variations occur, as well: the West (11.9%)
surpasses the Midwest (9.2%), while the Northeast (11.0%) and South (10.7%) rank between the
two. The West has both the nation's highest rate for central city areas (13.0%) and the lowest
rate for rural environs (5.9%).
The penetration rate generally rises as household income increases because broadband access
costs more than regular dial-up Internet access. Among those online households with family
income of less than $15,000, only 7.7% selected faster access modes, the lowest rate of any
income bracket. Conversely, the most affluent households (with incomes $75,000 and greater)
exhibit the highest proportion of broadband at 13.8%, or more than double the above low-income
penetration rate. The lowest bracket (under $5,000) breaks the pattern, yielding one of the
highest percentages (9.9%); this may reflect the presence of students who desire higher
transmission speeds for school or simply attach a higher priority to faster access.
Educational attainment above the level of high school also affects broadband percentages. Those
with college degrees (12.5%) exceed the national penetration rate for all households (10.7%).
The households where education levels were high school or less trailed substantially with rates
less than 9%. Householders with at least some college (9.9%) ranked in between the two
extremes but below the national average.
Purchase of faster transmission rates tends to be inversely related to age. The youngest
householders boast the highest broadband penetration (12.3%) -perhaps reflecting the student
factor- while seniors rank the lowest (9.0%). Interestingly, the age group between 45 and 54 can
claim one of the highest penetration rates (11.2%). Internet access speeds vary by race and
origins as well, with minorities registering both the highest and lowest diffusion rates. Asian
American and Pacific Islander households have the highest broadband rate (11.7%), followed by
Whites (10.8%). Blacks (9.8%) and Hispanics (8.9%) rank lowest.
Both the number of parents and gender type are correlated with broadband access rates. Thus,
male householders with children rank highest (12.6%), while female-headed families rank lowest
(8.2%). Two-parent families and families without children both exhibit broadband penetrations
(10.6%) approximating the national average; non-family households (11.7%) exceed this average
by a full percentage point.
NON-INTERNET HOUSEHOLDS As of August 2000, 41.5% of the Nation's 105 million households, or 43.6 million homes, had
Internet access. Thus, 58.5% of households (61.6 million) were not connected electronically. In
contrast, in December 1998 there were 76.5 million unconnected households (73.8%). This
movement represents a substantial decline in both the proportion (15.3 percentage points) and
number (a drop of 14.9 million) of non-Internet households relative to 20 months earlier.
As of August 2000, the number of households that had computers but no Internet access was
10.8 million, down from 16.9 million in December 1998, a decline of 36%. During that time
frame, the proportion of PC households without access fell from 38.4% to 19.8%.
A household may not be connected to the Internet for a number of reasons. In terms of its
historical experience, a household may have never been connected, or it may have decided to
discontinue its Internet use. We address these situations below.
WHY HOUSEHOLDS WITH COMPUTERS HAVE NEVER HAD INTERNET ACCESS
Within computer households, there are a number of households that have never had an Internet
connection. In August 2000, these households totaled 8.7 million. This figure represents a
sizeable decline from December 1998, when the count equaled 14.4 million, or 66% higher than
the 2000 figure.
During the 2000 survey, "never-connected" households provided a number of reasons for not
accessing the Internet at home (See Figure I-17). The most dominant reason was "don't want it"
(30.8%). The second most common response: "cost, too expensive" (17.3%). Other leading
reasons for non-access included "can use elsewhere" (10.4%), "not enough time" (9.1%), and
"computer not capable" (6.7%). These data are similar to the breakdown reported from the
December 1998 data, which found the reasons to be: don't want (25.7%) followed by reasons of
cost (16.8%), use elsewhere (9.6%), and no time (8.7%). In fact, the proportions for these major
categories remained basically the same, with the notable exception of the top (don't want it)
category, which increased by 5 percentage points.
Not surprisingly, for low-income households, cost prevails as the most important reason for never
connecting. For those households under $15,000, one-third of respondents (32.6%) cited cost,
and slightly more than one-quarter cited "don't want it" (26.6%). In contrast, the over-$75,000
bracket reversed the order of importance: "don't want it" (30.8%) surpassed cost (9.4%). The
cost/don't-want-it nexus occurred at $20,000: those brackets below this threshold ranked cost
number one, while those above placed "don't want it" first.
Cost affects other groups that have a computer but never had online access, as well. For example,
more than one in four (26.1%) of the youngest householders (under 25 years of age) regard
Internet connectivity as too expensive, rating it over "don't want it" (19.1%) as the primary
reason for non-access in their households. Female householders with children also point to cost
as the most important reason for non-access, with 29.9% of respondents citing this factor versus
22.5% stating that they "don't want it."
Unlike youngest householders, those in other age brackets regard "don't want it" as more
important than cost; this is particularly true for seniors (55 years and older), where "don't want it"
(40.4%) significantly outranks cost (14.5%). All major race/ethnic groups regard "don't want it"
as more important than the cost factor. This pattern holds for Whites (31.5% vs. 16.4%), Asian
Americans and Pacific Islanders (30.4% vs. 13.0%), and Blacks (31.4% vs. 18.2%); it also holds
for Hispanics but the differential is much less (25.5% vs. 23.7%).
The same relative rankings of "don't want it" vs. cost occur when viewed by levels of educational
attainment: the difference is most pronounced for those householders with college degrees
(29.3%, 11.6%), some high school (36.9%, 20.4%), or a high-school diploma (32.9%, 17.4%),
and least for some college (28.3%, 20.4%). All household types except female-headed families
have the same relative rankings, with male householders with children (36.5%, 22.5%)
dramatically reversing the order from the 1998 survey (18.7%, 23.2%). While employed
households (27.8%, 17.7%) continued the pattern established in December 1998 (23.5%, 16.5%),
unemployed households (30.9%, 28.9%) experienced a major swap of rankings compared to the
previous survey (13.3%, 38.2%).
Data relating to households with computers not using the Internet can be found in the Appendix,
Figures A41-A45.
In sum, the number and proportion of never-connected households with computers have
decreased since December 1998. Overall, the most important reasons are "don't want it" and
"cost, too expensive." The former has grown in importance for a number of groups, while cost
remains the paramount reason for lower-income households and a few other groups.
WHY HOUSEHOLDS WITH COMPUTERS HAVE DISCONTINUED INTERNET ACCESS
In August 2000, there were 4.0 million Internet "drop-offs" (i.e, those households that once had
but do not currently have electronic access). That number is essentially unchanged from the 4.1
million "drop-offs" in December 1998.
Respondents to the August 2000 survey cited several principal reasons for their households'
decisions to discontinue their Internet access (See Figure I-18). The leading factor noted was "no
longer owns computers" (17.0%). Next in importance were "can use anywhere" (12.8%) and
"cost, too expensive" (12.3%). The other key reasons were "don't want it" (10.3%), "not enough
time" (10.0%), and "computer requires repair" (9.7%). Also provided as reasons were "moved"
(6.1%), "not useful" (4.2%), "problems with ISP" (2.9%), "concern with children" (2.3%), "not
user friendly" (1.5%), and "computer capacity issues" (1.2%). "Other" reasons - those that are
too heterogeneous to be included elsewhere- were also given by respondents (9.8%).
These results reflect changes from the answers given in the December 1998 survey. In 1998,
respondents identified "cost, too expensive" (15%) as the most important reason for dropping off
the network. In 1998, the reason "no longer owns computer" ranked second (14%) and "can use
anywhere" ranked fourth (9%). "Not enough time to use it" registered higher percentage (10%
vs. 9%) in 2000 but slipped from third in 1998 to fourth in 2000. Respondents accorded
"computer requires repair" about double the response rate from December 1998 (5%) to August
2000 but had the same ranking (sixth). "Don't want it" was the fifth most popular reason in 1998
(7%).
A more disaggregated look at the August 2000 survey results reveals additional insights. Data
relating to discontinued Internet access can be found in the Appendix Table 1.
As a reason for discontinuing Internet access, "no longer owns a computer" ranks number one
and cost is the number two reason for all income brackets except the highest ($75,000+). The
most affluent income category respondents led with "can use elsewhere," "computer requires
repair," "don't want it," and "not enough time."
Looking at different race and ethnic groups, "no longer owns computer" ranked highest for White
households, followed by "can use elsewhere" and "cost." For Blacks, the ranking was "cost," "no
longer owns," and "use elsewhere." Hispanic households cited "elsewhere," "no longer owns,"
and "cost."
Focusing on the level of educational attainment, the elementary education, some high school
education, and some college education groups all identified the same two top reasons: "no longer
owns computer" and "cost." The other two groups saw it differently. The high-school-degree
group ranked cost first and "no longer owns" second. The college-degree group picked out "use
elsewhere," followed by "no longer owns."
An examination of household types reveals some distinct differences. Married couples with
children ranked "cost" and "not enough time" at the top of their list of major reasons. This
contrasts with other household types, whose number one reason was "no longer owns computer":
male householders with children, female householders with children, and non-family households.
All age categories except 35-44 year olds (for whom cost ranked first) rated "no longer owns
computer" as the most important reason for disconnecting. The second-ranked reasons varied
greatly: "can use elsewhere" for under-25 and 25-34 year olds; "computer requires repair" for 45-54 year olds; and "don't want it" for those householders at least 55 years old.
Thus, although variations exist for some specific demographic groups, August 2000 survey
respondents generally identified an absence of a computer, reliance on other locations, and cost as
the most important reasons for their households discontinuing their home Internet access. These
reasons contrast with the responses of never-connected households, who cited "don't want it" as
the most compelling reason for their non-access.
Table I-1
Percent of Households with a Computer
December
1998
August
2000
Point
change
Expansion
rate
All
42.1
51.0
8.9
21.1
White Non-Hispanic
46.6
55.7
9.1
19.5
Black Non-Hispanic
23.2
32.6
9.4
40.5
Asian Amer. & Pac.
Isl.
55.0
65.6
10.6
19.3
Hispanic
25.5
33.7
8.2
32.2
Less than $15,000
14.5
19.2
4.7
32.4
$15,000 - 24,999
23.7
30.1
6.4
27.0
$25,000 - 34.999
35.8
44.6
8.8
24.6
$35,000 - 49,999
50.2
58.6
8.4
16.7
$50,000 - 74,999
66.3
73.2
6.9
10.4
$75,000 and above
79.9
86.3
6.4
8.0
Less than High
School
12.5
18.2
5.7
45.6
High School
Graduate
31.2
39.6
8.4
26.9
Some College
49.3
60.3
11.0
22.3
College Graduate
66.9
74.0
7.1
10.6
Post Graduate
72.2
79.0
6.8
9.4
Rural
39.9
50.4