Report: DSL growth best ever

DSL providers added the greatest number of new residential customers in history last quarter but only marginally gained market share against their cable rivals, according to a study released Tuesday.

During the period ending March 31, 2004, providers of Net access via digital subscriber lines added 1.17 million net new subscribers, beating their previous record by 300,000, according to a study by Leichtman Research Group. Total broadband additions, including cable, reached 2.34 million, bringing the U.S. broadband population to 26.9 million.

This is encouraging news for the Baby Bell phone companies--Verizon Communications, SBC Communications, BellSouth and Qwest Communications--who are the main purveyors of DSL. Over the past year, the Bells have discounted their DSL services in hopes of tapping consumer demand for faster Internet access. These discounts have helped the Bells keep pace with cable companies while helping to stem losses from their core phone services.

But despite solid gains this quarter, DSL remains far behind cable for overall broadband customers. Cable companies, such as Comcast, Time Warner Cable and Cox Communications, own 62 percent of the market, down merely two percentage points from last year.

Cable companies have responded to DSL price cuts by boosting their base download speeds by nearly twofold. Some studies have shown that price matters more than speed, presumably giving DSL an edge. But cable continues to be the market leader.

"Thus far, it appears that DSL's newfound success has expanded the overall broadband market, rather than solely coming at the expense of cable's growth," said Bruce Leichtman, principal analyst for the study.

[Remo_Williams]

Growth? I'll give you growth.

I'm an early adopter of tech. I had ADSL in my hometown in 1999, not too early but the first in my town and probably one of the first in the state. In any case, I had a static IP, lots of bandwidth, and an easy setup. I was also 2000 feet from my CO.

Jump to 2001. I had to contact my Congressman to get Verizon to provision DSL to my home in Paterson. Why? I was 14000 feet from the CO, within the 17500 limit and 15000 practical limit. So Executive Appeals at Verizon provisions my line and caps it at 64kbps.

Oh yeah, capped it. And then told me it wouldn't go faster. All right, Verizon wins because I can't prove the capping without visiting the DSLAM. All I know is that a non-capped but distance-limited provision would have fluctuating values from 8-128 kbps, at least. This was locked at 64kbps.

Cut to 2004. I've had a cable modem for over a year now, happily connected. Now Verizon tells me DSL is available ON MY PHONE. Suddenly I'm a candidate for 1500kbps. What changed? Cable modem penetration in Verizon's market.

Now if Verizon was smart and greedy instead of just greedy, they'd be thinking about how to place WiMax towers at all COs throughout their portfolio, thus obviating the need to worry about distance when provisioning the ratepayers.

If another telco was equally smart, they'd get there first.

Remo

[George Cole]

lots of bandwidth

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