Study: Bright outlook for broadband

The number of U.S. homes with a broadband connection is likely to grow by 8.5 million, to 33.5 million, households by the end of 2004, according to new data released Thursday.

That would put broadband access in about 31 percent of all households and in 44 percent of homes with PCs and Internet access, a report by market researcher Strategy Analytics showed. Cable modems will account for 5.2 million of the new broadband connections, while 2.9 million households will add DSL (digital subscriber line) service, the research firm said.

Lower prices and branded content have helped DSL attract first-time customers who are switching from dial-up to broadband. But cable companies continue to dominate in selling broadband in the United States, luring consumers with higher access speeds, multiservice bundles and video-on-demand.

The triple combination of video, data and telephony being offered by cable companies like Time Warner Cable, Comcast and Cox Communications is compelling to customers seeking simplicity and savings, Strategy Analytics said. But telecom companies can keep pace by nabbing their own deals and postponing costly strategies like fiber rollouts.

"Regional phone companies, like SBC and Verizon, must make the most of their partnerships with satellite TV operators," James Penhune, director at Strategy Analytics, said in a statement. "Previous telco-satellite partnerships often failed to produce the simplicity and reliability that bundling is meant to deliver."