U.S. Broadband Lines Jump 15 Percent

UPDATED:The number of home and business broadband lines in the United
States jumped 15 percent to 32.5 million during the first half of 2004,
according to new data released by the Federal Communications Commission
(FCC).

The adoption rate was off slightly from the preceding six months, when
broadband lines soared 20 percent, from 23.5 million to 28.2 million, the
agency said.

But that should be seen as a sign of market weakness, said Mark Wigfield, an
FCC spokesman. “More subscribers were added in the last six months than in
the prior,” he said. “But the increase is less because the base was
larger.”

From June 2003 to June 2004, lines increased 38 percent as ISPs, telecoms
and cable operators cut prices and bundled with other high-speed services
to tempt customers to upgrade from dial-up to broadband.

The agency collects the broadband numbers twice a year from service
providers.

As for the method of access, asymmetric digital subscriber line (define)
technologies gained 20 percent during the first half of 2004, from 9.5
million to 11.4 million lines. That’s a dip from the 24 percent jump during
the last six months of 2003.

Cable modem service, which has been stronger in the United States than most
other countries, increased 13 percent, from 16.4 million to 18.6 million
lines. That too is down slightly from the second half of 2003, when cable
broadband gained 20 percent.

The remaining 2.5 million connections are satellite or wireless, wireline
other than ADSL, and fiber high-speed connections.

Fiber-to-the-premise could be primed for growth as Baby Bells,
including Verizon and SBC , invest billions in fiber
deployments and ready services for 2005.

In a recent interview with internetnews.com, Lee Rainie, director of the Pew
Internet & American Life project, said the greatest hindrance to widespread
broadband adoption in the United States is that “we’re not growing new
Internet users anymore.”

“Part of it is we might have reached close to a saturation point for
available interested people,” Rainie said. “Thirty-seven percent of adults
don’t use the Internet; half say they won’t.”

The adoption rate could accelerate again, however, with new technologies
that could make it less expensive to bring broadband to rural areas, as
well as applications, such as Voice over IP , which could convince
dial-up users to make the switch, he said.

The FCC’s Wigfield said the agency doesn’t delve into the reasons why
Americans upgrade to broadband, but “we certainly believe that VoIP will
result in more consumers signing up for high-speed services.”