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The Broadband Tipping Point

  |  April 19, 2004   |  Comments

Propelled by a surge in DSL subscriptions, more than half of American Internet users have high-speed access.

Dialing up is on the downswing, as 55 percent of all adult Internet users have high-speed access either at home or work, and 39 percent of adult surfers have a broadband connection at home. DSL is largely responsible for home broadband growth, as Pew Internet & American Life Project reports that DSL subscriptions have catapulted from 28 percent of market share in March 2003 to 42 percent in 2004.

DSL, the distant second to cable modem in the American broadband revolution, is gaining on the high-speed connection leader. The number of DSL subscriptions doubled over the year, while the number of cable modem subscriptions only grew about 24 percent. Cable modem is still commanding 54 percent of the market, however.

Pew Internet & American Life Project's John Horrigan, senior research specialist and author of the report, says that the study didn't specifically address the reasons why DSL is becoming popular but he believes DSL appeals to consumers on a number of levels.

"...just in talking with people in the industry, it appears that availability has improved, and customer service. With respect to customer service, the phone companies have done a better job in filling orders, as have competitive entrants such as Earthlink or Covad. DSL is a bit less expensive – users estimate their monthly bill at $38 versus $41 for cable modems, so that price advantage does help DSL," says Horrigan.

The Pew report identified a number of trends among the broadband population. More than half (54 percent) of work broadband users are college educated, and 37 percent have annual household incomes above $75,000. Furthermore, among Internet users who have been online for 10 or more years, 56 percent are broadband users.

Online Activities on a Typical Day, February 2004
Activity Dial-up Broadband
Work-related research 14% 26%
Research a product 11% 24%
Get map or driving directions 5% 12%
Get news online 22% 40%
Source: Pew Internet & American Life Project

Broadband users continue to be among the more active Internet surfers, engaging in activities that are conducive to high-speed access. More than one-third (36 percent) of broadband users cited a slow or frustrating connection for the reason behind their switch from dial-up, while 21 percent wanted to download files faster.

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