Demand for Broadband Exists at the Right Price

One-third of U.S. households currently subscribing to dial-up Internet service are interested in upgrading to broadband service in the next 12 months, according to a survey by Parks Associates. Additionally, 28 percent of broadband subscribers intend to purchase home networking solutions in the same period, indicating that subscriber growth for these advanced technologies will be modest but steady in the coming months.

Parks Associates estimates that as of the end of June 2001 there were 8.6 million U.S. households subscribing to broadband service and 5.5 million home networks deployed in U.S. households. The latest data confirms that, despite general economic uncertainty, and the downturn in technology-related ventures, consumers are very interested in purchasing new technologies such as broadband and home networking but at a price that says “value.”

“The early adopting consumer is ready to purchase networks and adopt broadband but must wait on excellent product with rational pricing,” said Tricia Parks, president of Parks Associates. “It’s more important than ever to have a complete understanding of what consumers want and how much they will pay.”

According to data compiled by the FCC, high-speed Internet access in the United States has hit 7.1 million users. The data was compiled from qualifying providers on March 1 and includes data as of Dec. 31, 2000. At the end of the 2000, the presence of high-speed service subscribers was reported in all 50 states, the District of Columbia, Puerto Rico and the Virgin Islands. Subscribers were reported present in 75 percent of the nation’s zip codes, compared to 56 percent at the end of 1999.

High-speed lines connecting homes and businesses to the Internet increased by 63 percent during the second half 2000, and the rate of growth for the full year was 158 percent. Of the total 7.1 million high-speed lines, 5.2 million were residential and small business subscribers.

High-speed subscribers are reported present in 97 percent of the most densely populated zip codes. The comparable figure is 45 percent among zip codes with the lowest population densities, compared to 24 percent a year earlier.

About 4.3 million of the high-speed lines provided services at speeds of over 200 kbps in both directions, meeting the FCC’s definition of advanced services, an increase of 51 percent during the last six months of 2000, and a growth rate for the full year of 118 percent.

DSL lines showed the greatest growth with an increase of 108 percent to 2 million lines. High-speed Internet connections over coaxial cable systems increased by 57 percent to a total of 3.6 million. Although the provision of high-speed lines by satellite and fixed wireless technology represents a small fraction of the total high-speed lines in use, the number of lines grew from 50,000 in December 1999 to 112,000 in December 2000.

Qualifying providers file the data twice a year under the FCC’s local competition and broadband data gathering program. The local competition and broadband data gathering program was adopted by the Commission in March 2000 to assist the FCC in its efforts to monitor and further implement the pro-competitive, deregulatory provisions of the Telecommunications Act of 1996.

internet.com’s dc.internet.com contributed to this report.

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