Top U.S. ISPs by Subscriber:
How We Count

The incumbents are doing well, while other ISPs tread water.

by Alex Goldman ISP-Planet Managing Editor [September 2, 2004]

This table shows subscriber growth rates at the ISPs we watch:

United Online is seeing very rapid adoption of accelerated dialup. On the other hand, it has also seen a one-time rapid increase in free accounts, which is a surprise.

ALLTEL is primarily an ILEC and wireless provider.

Subscriber numbers across the industry continue to be in question. For example, in its SEC filing, Qwest admits that the SEC is investigating its methods of counting subscribers, but says that the SEC is probably investigating almost everyone else too:

On June 17, 2004, in connection with an informal investigation, QCII received a letter from the SEC requesting certain information concerning the methodologies used to calculate its number of customers, subscribers and access lines. QCII believes that similar requests have been made to various other companies in the telecommunications sector. QCII is cooperating with the SEC in this matter. On July 23, 2004, QCII received from the FCC a letter stating that the request by the SEC has raised concerns about the accuracy of certain information periodically submitted to the FCC by QCII. The FCC has requested that QCII review information it submitted to the FCC for 2003 and affirm its accuracy or file appropriate revisions of these submissions. QCII believes that similar requests from the FCC have also been made to other telecommunications companies.

Unique subscribers
In order to calculate the number of subscribers in the rest of the U.S., we have to take the number of subscriber in the U.S., provided by Jupiter Research, and subtract the number of unique subscribers in the ISPs in our list.

Jupiter Research estimates that there were 80.1 million residential subscribers in the U.S on June 30, 2004.

The ISPs in our rankings account for approximately 49,098,767 unique subscribers. We try not to count any subscriber twice. For example, a subscriber to EarthLink DSL may also be counted in Covad's DSL numbers and in the ILEC's DSL numbers as well. We therefore do not count EarthLink and Covad broadband towards our total.

We count EarthLink's dialup base as not unique as a tool of convenience to address concerns with numbers reported by other ISPs.

We suspect that at least 5 percent of the broadband subscribers listed for DSL and cable providers have not been connected or have tried to cancel their contract, and the number may be higher, but we do not have accurate churn data, and so discount the rest of EarthLink's subscriber base instead of discounting an arbitrary percentage of the monopoly providers' subscribers.

We assume that 20 percent of AOL's subscriber base obtains access through another ISP, either as BYOA, or in a more traditional broadband arrangement. As AOL and Road Runner work together more and more, we expect the subscriber bases to overlap more than they do today, and hope that AOL, which is very good about disclosure, will reveal the extent of the subscriber overlap.

This leaves us with the following unique subscriber numbers:

Here's how we calculate the number of subscribers of the rest of the ISPs in the U.S. We substract the number of unique subscribers, 49,090,246, from the 80.1 million total individual subscribers. That gives us 31,009,754, or approximately 31.0 million subscribers for the rest of the ISPs in the U.S., which is 33.0 percent of the market, a decrease over previous quarters.

Market share calculation
So how many subscribers were not unique subscribers? The total subscribership of our ISPs is 63,075,446. Of this, we believe that 49,090,246 are unique subscribers. The remainder, 13,985,200, we believe appear in the numbers of more than one ISP on our list.

In order to calculate market share, we add the remainder, 13,985,200, to the Jupiter Research subscriber total, 80,100,000, to get 94,085,200, which we use to determine the market share of each ISP. This is the total number of unique subscribers in the United States plus the number of double-counted subscribers in the ISPs listed in our table.

Here is a sample market share calcluation: AOL's apparent ISP total (including non-unique subscribers) is 23,354,000 (23.4 million on our table). We divide 23,354,000 by 94,085,200 to obtain the market share percentage shown on our table, 24.8 percent.

Transparency
In building this subscriber rankings, we are constantly frustrated by the quality of the data we are forced to work with. We have, in contrast, endeavored to make our sources plain and our calculations obvious. We welcome feedback.

Also note that almost all companies on the list are public companies. We would like to list all providers, including non-facilities based companies, but most ISPs are privately held and do not disclose subscriber numbers at all (certainly not on a quarterly basis).

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Online Resources:
	Jupiter Research: Broadband
	Subscriber Ranking History
	Subscriber Value by Category