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June 16, 2006 9:43 AM PDT
DSL strikes a chord with frugal shoppers
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On one side are middle-income and price-sensitive households, which tend to favor DSL service offered by phone companies. On the other are more affluent families, which gravitate toward higher-speed cable modem services.
According to a recent report published by Leichtman Research Group, about 21 percent of households earning an annual income of between $30,000 and $75,000 a year subscribe to DSL. About 18 percent of these households subscribe to cable. By contrast, 37 percent of all households with annual household incomes over $75,000 subscribe to cable broadband and 27 percent subscribe to DSL.
"Clearly price is much more important at this point in the game," said Bruce Leichtman, president and principal analyst for Leichtman Research Group. "Middle-income families making the jump from dial-up to broadband are much more price-sensitive, and clearly the phone companies' messaging on low-priced DSL has gotten through loud and clear."
A year-and-a-half ago, pricing of DSL and cable modem service was roughly the same. But over the past year, the phone companies have launched an aggressive assault by dropping prices. At the end of 2005, the average price of DSL service was about $32 per month, roughly $9 less than cable, according to research firm IDC.
AT&T has twice lowered the price of its DSL service and now offers its 1.5Mbps service for $12.99 for the first year. Since AT&T's prices are promotional, after the first year, the price of the service jumps to the company's regular pricing model, which is $29.99 per month. Verizon created a new tier of service, which includes 768Kbps downloads, for $14.95 per month.
Price pressure
Regardless of household income, the promise of lower prices has also convinced some cable subscribers to switch to DSL. Dan Spencer, 38, of Norristown, Pa., had been a Comcast broadband subscriber for over three years. But after he realized his family was paying over $100 per month for high-speed Internet access and TV service, he decided to abandon Comcast for EchoStar's satellite TV and Verizon's DSL service.
"My wife usually pays our bills," he said. "But one day, when I saw how much we were paying Comcast for our cable TV and broadband, I was shocked. It was outrageous."
Spencer said he now pays about $75 per month for TV and Internet access, and he estimates he is saving roughly $45 per month over what he was paying for the Comcast service.
The low cost of DSL has kick-started DSL subscription rates, helping DSL providers increase their total customer base by 39 percent in 2005, according to Forrester Research. Verizon alone signed up 613,000 new high-speed Internet subscribers in the fourth quarter of 2005, a record for the company. It continued the strong growth in 2006, having signed up 541,000 new subscribers in the first quarter.
But the phone companies' success hasn't meant the demise of cable, which in total saw broadband subscriptions grow 21 percent in 2005. In fact, cable companies have also set new records in recent quarters for the number of subscribers they've acquired.
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152 comments
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Note: this does not include hurricanes where EVERYTHING is down. Who cares about Internet when there is no power. :)
I don't really care about the DSL prices, I can't stand local phone companies, doesn't matter who they are. Sprint/Embarq is local here, but whether them, SBC/AT&T, Verizon, they all screw people over on their phone prices. Plus, I regularly download large files, iso images of linux distros & such. DSL speeds top at 3Mbps, compared to standard cable at 5Mbps.
On top of that, DSL services demand a 1-2 year contract, no thanks, they can shove their contracts. I'll stick to Earthlink cable via Time Warner with the basic $14.95 Vonage plan in case I need something other than my cell phone.
For my needs, DSL can't compare.
But either way, most Americans are getting ripped off when it comes to broadband serverices when family households in Japan are getting 10 to 100Mbit FIOS service for $25 to $50 per month.
Note: this does not include hurricanes where EVERYTHING is down. Who cares about Internet when there is no power. :)
I don't really care about the DSL prices, I can't stand local phone companies, doesn't matter who they are. Sprint/Embarq is local here, but whether them, SBC/AT&T, Verizon, they all screw people over on their phone prices. Plus, I regularly download large files, iso images of linux distros & such. DSL speeds top at 3Mbps, compared to standard cable at 5Mbps.
On top of that, DSL services demand a 1-2 year contract, no thanks, they can shove their contracts. I'll stick to Earthlink cable via Time Warner with the basic $14.95 Vonage plan in case I need something other than my cell phone.
For my needs, DSL can't compare.
But either way, most Americans are getting ripped off when it comes to broadband serverices when family households in Japan are getting 10 to 100Mbit FIOS service for $25 to $50 per month.
As for BoP, there is an issue with Ham Radio that needs to be addressed. The issue has presented that there needs to be more research done into what frequencies are being affected. Ham Radio still has a large place in disaster situations.
There are numerous reports of Ham Radio "buzzing" in the test locations for BoP, this brings up worries that it may interfer with emergency response communication systems.
Hopefully they can get both of these worked out quickly so we can have real competition.
<a class="jive-link-external" href="http://www.current.net/WatchTheVideo/" target="_newWindow">http://www.current.net/WatchTheVideo/</a>
Read more about Global Broadband over PowerLines updates especially about ham-friendly BPL technology !!!
<a class="jive-link-external" href="http://broadbandoverpowerlines.blogspot.com/" target="_newWindow">http://broadbandoverpowerlines.blogspot.com/</a>
in many cases it's not very "broad".
Powerline broadband still sounds like pie in the sky
due to all the technical problems.
As for BoP, there is an issue with Ham Radio that needs to be addressed. The issue has presented that there needs to be more research done into what frequencies are being affected. Ham Radio still has a large place in disaster situations.
There are numerous reports of Ham Radio "buzzing" in the test locations for BoP, this brings up worries that it may interfer with emergency response communication systems.
Hopefully they can get both of these worked out quickly so we can have real competition.
<a class="jive-link-external" href="http://www.current.net/WatchTheVideo/" target="_newWindow">http://www.current.net/WatchTheVideo/</a>
Read more about Global Broadband over PowerLines updates especially about ham-friendly BPL technology !!!
<a class="jive-link-external" href="http://broadbandoverpowerlines.blogspot.com/" target="_newWindow">http://broadbandoverpowerlines.blogspot.com/</a>
in many cases it's not very "broad".
Powerline broadband still sounds like pie in the sky
due to all the technical problems.
Cable can keep their fast connections. I refuse to fill their pockets with my hard earned cash just so they can "open the spiggot" a little more for us thirsty people. The way I look at it, they should be paying me to connect. Let them collect from the companies that are benefitting financially from internet sales (etc).
Cable can keep their fast connections. I refuse to fill their pockets with my hard earned cash just so they can "open the spiggot" a little more for us thirsty people. The way I look at it, they should be paying me to connect. Let them collect from the companies that are benefitting financially from internet sales (etc).
Supposedly the cable was faster, but in day-to-day use I can't really tell much difference.
Supposedly the cable was faster, but in day-to-day use I can't really tell much difference.
www.wowway.com
I am sick of Comcast's high prices and network
outages. Their DNS servers seem to go out also
on a regular basis. They seem to be pricing
themselves out of the market.
www.wowway.com
I am sick of Comcast's high prices and network
outages. Their DNS servers seem to go out also
on a regular basis. They seem to be pricing
themselves out of the market.
It used to be that DSL speeds were far slower than cable but that is changing. At the moment, DSL speeds (for the majority of possible DSL connections offered) are about equal. Some cable markets are rolling out 20+Mb/s service and some are even higher. But the same problem will always come back and that is the shared medium. All that bandwidth means nothing when the cable comany oversells the area or little Johnny next door decides to upload 10GB of videos of him playing his XBox.
If you really want reliable broadband service that is not affected by your next door neighbor's surfing habits, go with DSL.
I still favor DSL but must be naked (no dialtone)for me to make the move back from cable.
FYI I worked for an independt ISP that provided DSL in the late 90's - early 00's and used your argument to get people to switch :)
-Metro305
DSL speeds however are always varried depending on where you live. Sure, they only offer you what they can give on approxamation, but if you can only get 1 MBps vs 4 MBps(the standard package for 39.99), which would you take? Besides, with the cable company offering phone, HSI, and tv service, its much easier to take a bundle than get the services from 2 different companies. Why else do you think DSL has dropped its price so much in the past few years. They had to find some way to compete with the cable companies.
It used to be that DSL speeds were far slower than cable but that is changing. At the moment, DSL speeds (for the majority of possible DSL connections offered) are about equal. Some cable markets are rolling out 20+Mb/s service and some are even higher. But the same problem will always come back and that is the shared medium. All that bandwidth means nothing when the cable comany oversells the area or little Johnny next door decides to upload 10GB of videos of him playing his XBox.
If you really want reliable broadband service that is not affected by your next door neighbor's surfing habits, go with DSL.
I still favor DSL but must be naked (no dialtone)for me to make the move back from cable.
FYI I worked for an independt ISP that provided DSL in the late 90's - early 00's and used your argument to get people to switch :)
-Metro305
DSL speeds however are always varried depending on where you live. Sure, they only offer you what they can give on approxamation, but if you can only get 1 MBps vs 4 MBps(the standard package for 39.99), which would you take? Besides, with the cable company offering phone, HSI, and tv service, its much easier to take a bundle than get the services from 2 different companies. Why else do you think DSL has dropped its price so much in the past few years. They had to find some way to compete with the cable companies.
Question, is their any demand for dedicated scaled bandwidth from 10 to 300 mbs, based on an individuals need, simultaneous in both directions?
All comments welcome!
Question, is their any demand for dedicated scaled bandwidth from 10 to 300 mbs, based on an individuals need, simultaneous in both directions?
All comments welcome!
I'm in the Norhteast and DSL in the next town over (literally a couple hundred feet away) but not for me?!
I'm in the Norhteast and DSL in the next town over (literally a couple hundred feet away) but not for me?!
I killed my phone line and got Vonage and between the two -- cable modem and vonage I have much less cost, much better service.
I killed my phone line and got Vonage and between the two -- cable modem and vonage I have much less cost, much better service.
to the USA, but check out websites like The Register and
you can read stories about the rollout of offers like
£21 (about $40) a month for a combination of phone and
8 Mb/s broadband. Now compare this with the latest offer from
Comcast which came in the mail a few days ago, $33 per month
each ($66 total) for phone and for "up to 6Mbps" broadband.
And those rates only last 6 months, after which they go way up.
to the USA, but check out websites like The Register and
you can read stories about the rollout of offers like
£21 (about $40) a month for a combination of phone and
8 Mb/s broadband. Now compare this with the latest offer from
Comcast which came in the mail a few days ago, $33 per month
each ($66 total) for phone and for "up to 6Mbps" broadband.
And those rates only last 6 months, after which they go way up.
In any case as others have point out, its all moot. I've yet to met a consumer that could tell 1.5Mbs from 3 or 6Mbps when doing basic surfing, email and messaging use. Any perceived slowness is usually due to DNS delays and latency which can hit any network connection.
My experiences of people trying to get cable support is that basically its non-existant - don't even think of trying anything remotely business critical with it (like working from home or using VoIP even) because when it goes down you could be weeks without resolution. And, the average big telco DSL comes a close second. My best experiences have been with small local ISPs that resell DSL connectivity (I'll give a big plug to Sonic.net in California for their amazing job at doing this and pleasing customers) and specialize in supporting it like its a real network connection and not just some add-on package from a big media company like comcast or big telco like SBC/ATT.
Two things to remember when getting DSL or cable - buyer beware and you mostly get what you pay for.
If network connectivity is critical to you make sure you have backup solutions like good old fashioned dial up (don't laugh, you'll be surprised how good 56K dial up can be) or WWAN from your cellular phone (GPRS/Edge or HSPDA). With all three configured and working you should be good to go next time the cable goes out and there's a week or so wait to get the cable guy out...
Most consumers should opt for the cheapest 384K solution they can find because anything higher is a waste of money for simple surfing and email. Which broadband use studies show is what about 75% or broadband users do with their connections.
I must disagree with your assumption that local ISPs reselling DSL is a better option. Local ISPs suffer from lack of trained personnel to deal with anything technical above simple web surfing issues and the dreaded "I can't get my email!" complaint. Not to mention, most local ISPs don't have the upstream bandwidth to support several highspeed customers at once unless they opt for a DS-3 at around $2,000 a month. Most simply opt to tie multiple T-1s together and multiplexing has its own issues. And finally, paying a local provider to simply route my connection through their system and adding latency (make no mistake, rerouting DSL connections through third parties adds about 50ms of latency) is not an attractive option.
I used to be in the local ISP game from 1995 through 1999. I could see the writing on the wall and got out. The days of the local ISP are numbered. City-wide wireless is going to take over the consumer market and local ISPs will be relegated to the sidelines with the dialup holdouts.