Small Biz Loves DSL but U.S. Lags Behind

“Heck no, we won’t go,” say many small U.S. businesses who were asked about reverting to dial-up Internet access from DSL.

In fact, 65 percent of the 550 business DSL subscribers that were surveyed via telephone by the Yankee Group for DSL provider SBC indicated that their broadband connection would be one of the last services eliminated if they needed to cut costs.

The survey revealed that almost all (91 percent) of the business DSL subscribers believe that the productivity benefits of the service meet or exceed their expectations in relation to the monthly cost.

“Businesses truly believe that broadband enables them to service their customers better and more efficiently,” said Mike Lauricella, program manager with the Yankee Group’s Small and Medium Business Technologies Practice. “Businesses will only continue to increase their use of the Internet and continue to extend broadband throughout the company.”

A broadband connection is invaluable for many business applications that require speed and strength. The survey found that 88 percent of respondents use their DSL Internet access service to conduct online research; 83 percent send and receive email with large attachments; 78 percent purchase supplies online; and 69 percent book travel reservations.

Even though many U.S. businesses are increasingly reliant on DSL service, a point-topic report finds that American broadband subscriptions are lagging behind those in Europe.

Measured in terms of DSL lines per 100 population, the U.S. now ranks tenth in the world league table – down from fifth only a year ago. The U.S. with only 1.6 DSL lines per 100 people is failing to build on its early start in the technology.

While the U.S. increased its number of DSL lines by 78 percent, from 2.5 million to 4.4 million, during 2001, other countries grew much faster. The Asia-Pacific countries are still out in front, with South Korea having nearly 11 DSL lines for every 100 people, but European countries such as Germany, Finland, Sweden and Belgium are also showing very rapid growth.

“This looks bad for growth prospects in the U.S.,” says Tim Johnson, publisher of point-topic.com. “Broadband’s a big market in its own right but it’s also the platform for all kinds of new media services, and it’s essential for raising productivity and cutting costs.”

Point-topic theorizes that the lowered U.S. ranking can be attributed to the country’s lack of enforcement of telecom policies, such as the Telecommunications Act of 1996. Instead of stimulating competition, the legislation left the incumbent carriers or regional Bell operating companies comfortably in control of the DSL market.

The demise of many DSL service providers, coupled with non-existent governmental promotion of broadband development, are contributing factors to the U.S. position in rankings. Another reason is that many homes use the competing broadband technology, cable modems. But even when this is taken into account the U.S. is still well down the broadband league table.

The U.S. is not the only country having difficulty in the broadband race. Japan started serious DSL roll-out only in 2001 but it is already 13th in terms of DSL lines per 100 population. France and Italy are 19th and 20th respectively and the UK trails well behind at 26th, with only 0.24 lines per 100 people at the beginning of this year.


World Top Ten for DSL, based on DSL lines per 100 population
Country Jan 2002 Jan 2001 Ranking 2002 Ranking 2001
South Korea 10.95 4.03 1 1
Hong Kong 5.56 3.42 2 2
Taiwan 4.83 0.70 3 7
Canada 3.73 1.43 4 3
Denmark 2.85 0.94 5 6
Belgium 2.76 0.42 6 9
Germany 2.23 0.23 7 12
Sweden 2.18 0.45 8 8
Finland 1.66 0.16 9 13
U.S. 1.59 0.89 10 5
Source: Point Topic


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