The Future of Broadband Lies in DSL

The number of high-speed Internet access subscribers in the US will increase from 2.3 million in 1999 to 42 million in 2005, according to research by Allied Business Intelligence (ABI). Worldwide broadband subscribers will jump from 5 million in 1999 to 91 million in 2005.

Thus far, cable modems have been the clear leader in high-speed Internet access when it comes to low-price, multi-megabit data transfer rates, winning out over DSL. Cable’s early lead is due largely to an earlier market entry, according to the report “The DSL Solution: ADSL/SDSL Equipment and Subscribers” by ABI, which found that at the end of 1999, high-speed cable Internet service had 2.1 million US subscribers, while DSL had only 500,000 US subscribers.

But DSL providers cannot roll out the service fast enough. Due in part to increasing advertising campaigns promoting DSL, some providers were seeing 50 to 60 percent growth in subscription rates, and experiencing significant backlogs in deployment, ABI found.

While residential Internet users in the US are beginning to jump on the broadband wagon, many US businesses still have yet to convert to high-speed Internet access. According to the “Broadband Industry Update” by Vertical Systems Group, installations of broadband access connections from established businesses in the US will first surpass dial-up access in 2003. By that year, DSL installations will exceed all other broadband installations and business access technologies combined, including leased lines, frame relay, ATM, cable modems, wireless, satellite, and optical.

The total number of US Internet-connected businesses is projected to increase significantly in the next three years, jumping from 2.96 million establishments in 2000 to 4.48 million in 2003, according to Vertical Systems Group. During this time, broadband connections will increase by 264 percent while use of dial access will decline 10 percent.

“Emerging technologies like DSL enable businesses to more cost effectively connect to the public Internet at broadband access speeds,” said Rosemary Cochran, Principal of Vertical Systems Group. “This is particularly a boon for small and medium-sized business establishments that have been previously unable to afford dedicated connections.”

Among residential consumers, many questions still exist regarding broadband access. According to a survey of 1,000 members of Greenfield Online’s Internet-based panel by 2Wire, Inc., 51 percent of people in the US do not know if DSL service is available in their neighborhood. Younger users are more likely to know if DSL is offered in their area than older users, the survey found. More than half (53 percent) of Internet users ages 25 to 34 know if DSL is available locally; compared with 37 percent of Internet users age 55 and older. Not surprisingly, the higher the income, the more likely respondents were to be aware of DSL. Sixty-four percent of Internet users making more than $100,000 per year know about local DSL service, compared to only 39 percent of Internet users making less than $35,000 per year.

Reasonable and timely deployment of advanced telecommunications, including broadband Internet access, has been a topic the FCC is keeping a close eye on. While the latest report by the FCC has found deployment to be up to standards, certain groups of consumers have been identified that are vulnerable to not receiving service in a timely fashion, including: rural Americans (especially those outside of population centers); inner city consumers; low-income consumers; minority consumers; and tribal areas.

According to the FCC, there were 2.8 million high-speed speed and advanced services subscribers at the end of 1999. Of those, 1.8 million of these subscribers are residential or small business customers. The FCC also found that 59 percent of the ZIP codes in this country have at least one subscriber to high-speed access services, and 91 percent of the US population lives in those ZIP codes.

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