The State's Internet Use Out Paces The Country

Recent national surveys show 42 percent of households have computers and only 19 percent are sending and receiving information on the Internet.

The same national studies show westerners have more computers and more Internet usage than the rest of the country. Colorado, with its booming economy, high personal income, and large, well-educated baby boom population, exemplifies the characteristics of the new Internet users.

Computer Facts
U.S. and Colorado Households

	Colorado Households 1999	U.S. Households 1997/98
Home computer	51%	42% (1)
Home computer with modem	38%	21% (2)
On-line with home computer	35%	19% (2)

(1) Electronic Industries Association, 1998
(2) U.S. Department of Commerce, 1997
Ciruli Associates, N800, Residents, 1999

The Internet has become the world's largest communication network. The high level of Internet use among Colorado residents shown in the survey also reflects the recent increase in Internet shopping and business uses. Internet use increased nine percent a year from 1996 to 1998. And the last six months have seen a significant surge in on-line shopping, investing, entertainment and conducting business.

Digital Divide
There are significant differences among Coloradans who use the Internet. Lower income residents and those with a high school education are much less likely to have computers at home or use the Internet than their high income, post college educated fellow citizens. The Colorado on-line user is most likely to be between 35 and 54 years old, have a family income of $80,000 or more, and a college or post-college education.

Rural and Lone Eagle Internet Use
While Internet use is more likely in urban areas and along the Colorado Front Range, there are enclaves of intense Internet use in rural areas and small towns. The survey shows that residential phone lines are often used for business by residents of small towns, cities and in rural areas. Also, there are pockets of significant computer and on-line Internet users outside the Front Range metro area. The users are often farm families and so-called lone eagles (people in small, non-urban communities using the Internet to conduct retail and business activities).

Business, Government and Nonprofit Organizations Computer and Internet Use

The study of telephone usage and basic service was a collaboration between the PUC and the Office of Consumer Council (OCC). A second scientific survey of 285 businesses was authorized by OCC. Also, interviews were conducted by Ciruli Associates with 52 local government agencies and nonprofit organizations from around the state.

Colorado businesses are heavy users of computers and the Internet as are local government and nonprofit organizations. Seventy-five percent of small businesses use desktop or laptop computers at their business and 36 percent are on the Internet. All large businesses reported computer use and 73 percent are on the Internet. Nearly all local government organizations and nonprofits report computer use at the office and 69 percent are on-line.

Computer Facts
Colorado Business, Government and Nonprofits

	Office PC's	Use the Internet
Business
Less than 10 employees	75%	36%
10-99 employees	80%	39%
100 or more employees	100%	73%
Government/Nonprofit
Organizations	96%	69%

Ciruli Associates, N285, Business, 1999
Ciruli Associates, N52, Non-business, 1999

Data Speed
The speed of data transmission on telephone lines is an important element in the quality of Colorado's information infrastructure. On average, 41 percent of residents rate their data transmission speed "slow" or "very slow." Also, a near equal number of the state's businesses (44%) rate data speed "slow" or "very slow."Complaints from the state's regions about on-line data speed range from none among government and nonprofit organizations in the metro area to half the business respondents in non-Front Range areas and Western Slope government and nonprofit organizations. Denver metro residents were least likely to express concern about data speed (36% slow and very slow). Eastern Plains and Western Slope residents were more concerned (41% slow and very slow). The highest "very slow" description of data speed was registered by Western Slope (21%) and small town on-line residents (20%).

Residents, Business, Government and Nonprofit Organizations Rate Computer Internet Data Speeds Slow and Very Slow

Residents	41%
Metro	35%
Front Range	40%
Easern Plains	41%
Western Slope	41%
Business	44%
Metro	43%
Front Range	41%
Eastern Plains	50%
Western Slope	50%
Gov't. / Nonprofit	28%
Metro	0%
Front Range	23%
Eastern Plains	25%
Western Slope	50%

Ciruli Associates, N800, Residents, 1999
Ciruli Associates, N285, Business, 1999
Ciruli Associates, N52, Non-business, 1999

Attitudes on Data Speed and Phone Rates
Residents were asked a series of policy questions about phone service and data speed on telephone lines. Coloradans recognize the importance of fast data speeds. There is near unanimous agreement that "fast telephone data speeds are important for business, local government, schools and hospitals" (strong and somewhat agreement is above 85% for all groups).



Ciruli Associates, N800, Residents, 1999
Ciruli Associates, N285, Business, 1999
Ciruli Associates, N52, Non-business, 1999

Question: Fast telephone data speeds are important for businesses, local government, schools and hospitals.While Coloradans are supportive of providing access to additional features and services to "everyone in the state," they are price sensitive when considering expansion of basic phone service. More than 60 percent of residents and business, government and nonprofit organizations support universal access to caller ID, call waiting, call forwarding and faster data speeds, but believe "we shouldn't raise phone rates" to provide them as basic service for everyone.

Ciruli Associates, N800, Residents, 1999
Ciruli Associates, N285, Business, 1999
Ciruli Associates, N52, Non-business, 1999

Question: Everyone in the state should be able to have caller ID, call waiting, call forwarding and faster data speeds, but we shouldn't raise phone rates.

Review of Policy Issues

The major focus of the survey was to provide information to Colorado telecommunication policymakers; the Public Utilities Commission, the Governor's Office and the State Legislature, concerning the status of Colorado residents, business, government and nonprofit organizations use and satisfaction with telephone basic service, especially data speed.

The primary findings of the study were:

• Colorado residents, business, government and nonprofit organizations are heavy users of the state's telephone infrastructure for receiving and sending information by computer and the Internet.
  
  
• There are complaints about data speed from more than two-fifths of residents and businesses, with higher levels of dissatisfaction in non-metro areas.
  
  
• Coloradans recognize the importance of fast telephone data speed for business, local government and nonprofit organizations.
  
  
• The public believes people and organizations should have access to high quality telephone service and fast data speed, but not raise basic phone rates.

Survey Background The Colorado Public Utilities Commission (PUC) and the Ofice of Consumer Council (OCC) authorized two surveys of Colorado telephone customers in order to review the services and features that shoud be included in the basic service that telephone companies must provide to all customers. The two telephone surveys were conducted in February 1999. A telephone survey authorized by the PUC of 800 residents was conducted with customers of USWest, Century Tel/PTI/Universal and twenty-four small telephone companies. Conducted by Ciruli Associates Data collected February 15 to February 23, 1999 Statistical range of confidence plus or minus 4.3 percent at the 95 percentage accuracy. A second survey authorized by the OCC was conducted with 337 business, nonprofit and government organizations statewide. Two hundred and eighty-five businesses were scientifically selected and stratified by size, activity and geography. The 52 non-business organizations included cities, towns and county governments, elementary and secondary education and junior colleges, social services and criminal justice, hospitals and health organizations, and libraries throughout the state. Public Utilities Commission Office Level 2 1580 Logan St. Denver, CO 80203 303.894.2000 Office of Consumer Council Suite 610 1580 Logan St. Denver, CO 80203 303.894.2118

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