September 21, 2005 2:31 PM PDT

Study: Broadband penetration slowing

Americans are putting the brakes on broadband adoption growth, according to a new study.

The survey, published by independent think tank Pew Internet & American Life Project, found that high-speed Internet adoption, after growing quickly in the past several years, has been losing steam and is poised to slow even further. During the first six months of 2005, 53 percent of home Internet users said they use a broadband connection, up from only 50 percent during the previous six months.

This is a much slower growth rate than reported for the same periods a year earlier. From November 2003 to May 2004, high-speed Internet penetration grew by 20 percent, from 35 percent of home users in December 2003 to 42 percent in May 2004, according to the Pew data.

Results of the study will be presented at the Telecommunications Policy Research Conference in Arlington, Va., Sept. 23 to Sept. 25.

Pew attributed the slowdown in broadband penetration to a maturing of the market. Early adopters, who are typically savvy about the Internet, well-educated and well-paid, have already signed up for broadband service.

Today's dial-up customers, by contrast, tend to be older adults with lower incomes and educational levels. Most importantly, they do not use the Internet to do much beyond basic Web surfing and e-mailing.

"The low-hanging fruit of early adopters is gone," John Horrigan, director of research at Pew, said Wednesday. "And the remaining dial-up population seems unenthused in terms of the Internet, so mathematically, that makes for a smaller fruitful pool for providers to select from."

At least one analyst agrees, in part, with Pew's analysis. "There's no question that broadband growth will slow over time," said Jim Penhune, an analyst at Strategy Analytics. "But what we're seeing now is providers using aggressive pricing to entice new customers."

DSL service has become available for less than the cost of a dial-up connection only in the past few months. In June, SBC announced a one-year promotion to offer its DSL service for $14.95. Just last month, Verizon Communications followed suit with a slower-speed offering that also costs $14.95. Some experts believe that this could have a significant impact on today's dial-up customers.

"The (telephone companies') challenge is persuading the people plunking along on AOL dial-up to switch to broadband," Penhune said. "And I think the $15 products are just the thing."

Cable companies are also going after these consumers by offering special pricing on "triple play" bundles of service that combine telephone, high-speed broadband access and TV service. Cablevision currently offers a package of all three for $90 per month. Whether dial-up consumers are enticed into subscribing to broadband services is yet to be seen, but it's clear that providers realize that they must change their strategy to win them over.

16 comments

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Add your comment
I Would Love to go Broadband, but...
I live in the rural part of California and no broadband service is
available, or likely to be available to me. We don't even have cable
TV. Satelite access to the internet is also still a dream. I would say
to those companies wishing more subscribers, get the wires hung
and I'll sign up.
Posted by Eugene Denson (7 comments )
Reply Link Flag
I Would Love to go Broadband, but...
I live in the rural part of California and no broadband service is
available, or likely to be available to me. We don't even have cable
TV. Satelite access to the internet is also still a dream. I would say
to those companies wishing more subscribers, get the wires hung
and I'll sign up.
Posted by Eugene Denson (7 comments )
Reply Link Flag
Around here (midwest USA)...
...I'd say that's because cable hasn't dropped their price in 4 years
(still $45/month) and DSL, although cheaper, has spotty coverage.
Posted by open-mind (1027 comments )
Reply Link Flag
Around here (midwest USA)...
...I'd say that's because cable hasn't dropped their price in 4 years
(still $45/month) and DSL, although cheaper, has spotty coverage.
Posted by open-mind (1027 comments )
Reply Link Flag
What is the price after the promotion is over?
I am very interested in the fine print of the DSL offerings coming
in below $15.00 per month.

Do you have to have regular landline service first - I am pretty
sure that is required as part of the deal.

How long does the promotion last?
How long is the committment period?
What is the price per month after the committment is over?
What is the upload speed?
Are there any limits on total usage, either by time or by
bandwidth?

Does anyone know?

Rod Adams
Posted by Rod Adams (74 comments )
Reply Link Flag
SBC Yahoo DSL plan in Kansas City area
I live in the Kansas City area. Here are the rules:

1) Speed: 1.5Mbps Downstream, 384Kbps Upstream) PPPoE
2) Upfront Cost: About $12 for shipping DSL Modem self install kit. $50 for modem with $50 mail in rebate
3) $14.95 / month charge for the first year
4) 1 year commitment
5) Local phone line needed. The cheapest line I got was $17.00 + tax (comes to $19.50) - your mileage might vary.

There is no way I will stay with SBC if they increase the price after one year (also the commitment period). I will threaten to switch. I don't think they can ever start charging much more than $14.95.

I hope by next year they have naked DSL so I can get rid of the local phone line. I use Vonage and I don't even have SBC phone line hooked up to a single phone.
Posted by bommai (172 comments )
Link Flag
What is the price after the promotion is over?
I am very interested in the fine print of the DSL offerings coming
in below $15.00 per month.

Do you have to have regular landline service first - I am pretty
sure that is required as part of the deal.

How long does the promotion last?
How long is the committment period?
What is the price per month after the committment is over?
What is the upload speed?
Are there any limits on total usage, either by time or by
bandwidth?

Does anyone know?

Rod Adams
Posted by Rod Adams (74 comments )
Reply Link Flag
SBC Yahoo DSL plan in Kansas City area
I live in the Kansas City area. Here are the rules:

1) Speed: 1.5Mbps Downstream, 384Kbps Upstream) PPPoE
2) Upfront Cost: About $12 for shipping DSL Modem self install kit. $50 for modem with $50 mail in rebate
3) $14.95 / month charge for the first year
4) 1 year commitment
5) Local phone line needed. The cheapest line I got was $17.00 + tax (comes to $19.50) - your mileage might vary.

There is no way I will stay with SBC if they increase the price after one year (also the commitment period). I will threaten to switch. I don't think they can ever start charging much more than $14.95.

I hope by next year they have naked DSL so I can get rid of the local phone line. I use Vonage and I don't even have SBC phone line hooked up to a single phone.
Posted by bommai (172 comments )
Link Flag
Broadband won't really take off until...
It fulfills its promise. Not just that of being
universally available (which is a problem), but
that of allowing people to exploit it as a
creative medium.

Often times there's a disparity between upload
and download speeds. This isn't a problem if you
are solely a consumer, but the real power of the
Internet is that everyone can be a producer as
well.

The problem there is that producing content and
sharing face a slew of obstacles. First, there's
the lop-sided bandwidth allocation. Next,
there's ISPs that will-nilly block ports for
services (like Verizon forbids people to use the
HTTP port 80). Finally, there are terms of
service that forbid you to run any software that
might share things with others on the Internet
(Verizon and Comcast) -- meaning you are legally
obliged not to contribute from home (unless you
by into a third-party service hosted elsewhere).

People want to blog off their home PC, share
videos of the kids, maybe even make their own
creative movies. There's a lot of really great
amateur cinema (often better than Hollywood) out
there right now that can be had via P2P for
free, and there are tools that allow you to
publish "channels" of audio and video right from
your home PC using various P2P protocols -- that
is if you have an ISP that permits you to use
them.

Right now, the ISPs still have a silly notion
that the Internet is meant to convey commercial
content to the masses. Some of them even make
silly attempts to deliver content (AOL and
Comcast do), not realizing that all the content
they deliver is available directly from the
source, or that a lot of the content that people
really want is generated by their peers.

Right now, boradband hasn't even come 1/2 way.
Posted by Gleeplewinky (289 comments )
Reply Link Flag
Broadband won't really take off until...
It fulfills its promise. Not just that of being
universally available (which is a problem), but
that of allowing people to exploit it as a
creative medium.

Often times there's a disparity between upload
and download speeds. This isn't a problem if you
are solely a consumer, but the real power of the
Internet is that everyone can be a producer as
well.

The problem there is that producing content and
sharing face a slew of obstacles. First, there's
the lop-sided bandwidth allocation. Next,
there's ISPs that will-nilly block ports for
services (like Verizon forbids people to use the
HTTP port 80). Finally, there are terms of
service that forbid you to run any software that
might share things with others on the Internet
(Verizon and Comcast) -- meaning you are legally
obliged not to contribute from home (unless you
by into a third-party service hosted elsewhere).

People want to blog off their home PC, share
videos of the kids, maybe even make their own
creative movies. There's a lot of really great
amateur cinema (often better than Hollywood) out
there right now that can be had via P2P for
free, and there are tools that allow you to
publish "channels" of audio and video right from
your home PC using various P2P protocols -- that
is if you have an ISP that permits you to use
them.

Right now, the ISPs still have a silly notion
that the Internet is meant to convey commercial
content to the masses. Some of them even make
silly attempts to deliver content (AOL and
Comcast do), not realizing that all the content
they deliver is available directly from the
source, or that a lot of the content that people
really want is generated by their peers.

Right now, boradband hasn't even come 1/2 way.
Posted by Gleeplewinky (289 comments )
Reply Link Flag
Broadband ups the ante for home expenses
Some of us are technically savvy but have enough broadband access at work that we aren't ready to buy into it at home. Bringing broadband into the house always seems to involve hardware issues that ratchet up the monthly expenses, such as having the level of cable tv that requires a box (and a lot of expense to get tv connections back into the extra rooms that had them before the box); DSL has security issues with its "always-on" state and monitoring by the isp, and anyway it's not available in my district or, for that matter, much of our State. I'll get along just fine with dialup at home until Broadband can be gotten without what amounts to $80/month additional investment to enable that $14.95/month service...
Posted by Razzl (1318 comments )
Reply Link Flag
Broadband ups the ante for home expenses
Some of us are technically savvy but have enough broadband access at work that we aren't ready to buy into it at home. Bringing broadband into the house always seems to involve hardware issues that ratchet up the monthly expenses, such as having the level of cable tv that requires a box (and a lot of expense to get tv connections back into the extra rooms that had them before the box); DSL has security issues with its "always-on" state and monitoring by the isp, and anyway it's not available in my district or, for that matter, much of our State. I'll get along just fine with dialup at home until Broadband can be gotten without what amounts to $80/month additional investment to enable that $14.95/month service...
Posted by Razzl (1318 comments )
Reply Link Flag
Broadband costs
The only reason Broadband isn't at penetration levels comparable to even third world and second world countries -Korea,Sweden,Denmark, lots of others, is the monopolistic cost control powers illegally exercised by the cable and RBOC companies. Recent FCC decisions make it worse by allowing the various infrastructures to refuse to discount access to their infrastricture by competitors with lower cost, more full-featured offerings of digital signals-entertainment,communications,Internet, security,digital data lines, lots more.
Does it make any sense that higher-speed-than-US-for-less-cost-Broadband is available in Korea and other places?
Not to me.
The politically engineered restrictions engendered by contributions to key congressional and Senate committee members and Chairmen, as well as similar restrictions purchased at the local level have led to this mess.
We. as citizens and consumers, and 18,000,000 small business owners just have to make our opinions and demands for free market competition known to regulators and legislators; through our vaotes, our own contributuonsa, and our efforts on behalf of candidates who will work to eliminate monopolistic control of the "digital highway," allowing access to all.
Let's remember that we the public own the airwaves, not the FCC, not the Networks, and certainluy not the cable, satellite and telephone companies.
Just as a note of interest, estimates are that restricying access to cable infrastructure, just cable we're talking about here, has cost consumers over 200,000,000,000 Billion (that's a "B" folks) dollars since cable was instituted. That's a lot of movies, Internet searches, telephone calls, vacation trips, dinners out,and whatever else we didn't get to choose becuase our money was sucked into the cable industry's profits.
Talk to your legislators. email them, write snail mail, but make your voice for choice heard by all!
Give us choices at fair prices and everybody benefits.
Go to;
www.fcc.gov,
www.house.gov,
www.senate.gov,
and click on your represenatatives...and click hard!!!
Why should we have to open our business doors every day and face competion from all over the world,, but not be able to use free market competition to increase choices and lower costs for Broadband, enabling small businesses and home businesses to do business better and more efficiently, at less cost?
Right?

Barry Dennis
Ellicott City, Maryland
Posted by bdennis410 (175 comments )
Reply Link Flag
Broadband costs
The only reason Broadband isn't at penetration levels comparable to even third world and second world countries -Korea,Sweden,Denmark, lots of others, is the monopolistic cost control powers illegally exercised by the cable and RBOC companies. Recent FCC decisions make it worse by allowing the various infrastructures to refuse to discount access to their infrastricture by competitors with lower cost, more full-featured offerings of digital signals-entertainment,communications,Internet, security,digital data lines, lots more.
Does it make any sense that higher-speed-than-US-for-less-cost-Broadband is available in Korea and other places?
Not to me.
The politically engineered restrictions engendered by contributions to key congressional and Senate committee members and Chairmen, as well as similar restrictions purchased at the local level have led to this mess.
We. as citizens and consumers, and 18,000,000 small business owners just have to make our opinions and demands for free market competition known to regulators and legislators; through our vaotes, our own contributuonsa, and our efforts on behalf of candidates who will work to eliminate monopolistic control of the "digital highway," allowing access to all.
Let's remember that we the public own the airwaves, not the FCC, not the Networks, and certainluy not the cable, satellite and telephone companies.
Just as a note of interest, estimates are that restricying access to cable infrastructure, just cable we're talking about here, has cost consumers over 200,000,000,000 Billion (that's a "B" folks) dollars since cable was instituted. That's a lot of movies, Internet searches, telephone calls, vacation trips, dinners out,and whatever else we didn't get to choose becuase our money was sucked into the cable industry's profits.
Talk to your legislators. email them, write snail mail, but make your voice for choice heard by all!
Give us choices at fair prices and everybody benefits.
Go to;
www.fcc.gov,
www.house.gov,
www.senate.gov,
and click on your represenatatives...and click hard!!!
Why should we have to open our business doors every day and face competion from all over the world,, but not be able to use free market competition to increase choices and lower costs for Broadband, enabling small businesses and home businesses to do business better and more efficiently, at less cost?
Right?

Barry Dennis
Ellicott City, Maryland
Posted by bdennis410 (175 comments )
Reply Link Flag
Broadband costs
The only reason Broadband isn't at penetration levels comparable to even third world and second world countries -Korea,Sweden,Denmark, lots of others, is the monopolistic cost control power illegally exercised by the cable and RBOC companies. Recent FCC decisions make it worse by allowing the various infrastructures to refuse to discount access to their infrastructure by competitors with lower cost, more full-featured offerings of digital signals-entertainment,communications,Internet, security,digital data lines, lots more.
Does it make any sense that higher-speed-than-US-for-less-cost-Broadband is available in Korea and other places?
Not to most of us.
The politically engineered restrictions engendered by contributions to key congressional and Senate committee members and Chairmen, as well as similar restrictions purchased at the local level have led to this mess.
We. as citizens and consumers, and 18,000,000 small business owners just have to make our opinions and demands for free market competition known to regulators and legislators; through our votes, our own contributions, and our efforts on behalf of candidates who will work to eliminate monopolistic control of the "digital highway," allowing access to all.
Let's remember that we the public own the airwaves, not the FCC, not the Networks, and certainly not the cable, satellite and telephone companies.
Just as a note of interest, estimates are that restricting access to cable infrastructure, just cable we're talking about here, has cost consumers over 200,000,000,000 Billion (that's a "B" folks) dollars since cable was instituted. That's a lot of movies, Internet searches, telephone calls, vacation trips, dinners out,and whatever else we didn't get to choose becuase our money was sucked into the cable industry's profits.
Talk to your legislators. email them, write snail mail, but make your voice for choice heard by all!
Give us choices at fair prices and everybody benefits.
Go to;
www.fcc.gov,
www.house.gov,
www.senate.gov,
and click on your represenatatives...and click hard!!!
Why should we have to open our business doors every day and face competion from all over the world,, but not be able to use free market competition to increase choices and lower costs for Broadband, enabling small businesses and home businesses to do business better and more efficiently, at less cost?
Right?

Barry Dennis
Ellicott City, Maryland
Posted by bdennis410 (175 comments )
Reply Link Flag
Broadband costs
The only reason Broadband isn't at penetration levels comparable to even third world and second world countries -Korea,Sweden,Denmark, lots of others, is the monopolistic cost control power illegally exercised by the cable and RBOC companies. Recent FCC decisions make it worse by allowing the various infrastructures to refuse to discount access to their infrastructure by competitors with lower cost, more full-featured offerings of digital signals-entertainment,communications,Internet, security,digital data lines, lots more.
Does it make any sense that higher-speed-than-US-for-less-cost-Broadband is available in Korea and other places?
Not to most of us.
The politically engineered restrictions engendered by contributions to key congressional and Senate committee members and Chairmen, as well as similar restrictions purchased at the local level have led to this mess.
We. as citizens and consumers, and 18,000,000 small business owners just have to make our opinions and demands for free market competition known to regulators and legislators; through our votes, our own contributions, and our efforts on behalf of candidates who will work to eliminate monopolistic control of the "digital highway," allowing access to all.
Let's remember that we the public own the airwaves, not the FCC, not the Networks, and certainly not the cable, satellite and telephone companies.
Just as a note of interest, estimates are that restricting access to cable infrastructure, just cable we're talking about here, has cost consumers over 200,000,000,000 Billion (that's a "B" folks) dollars since cable was instituted. That's a lot of movies, Internet searches, telephone calls, vacation trips, dinners out,and whatever else we didn't get to choose becuase our money was sucked into the cable industry's profits.
Talk to your legislators. email them, write snail mail, but make your voice for choice heard by all!
Give us choices at fair prices and everybody benefits.
Go to;
www.fcc.gov,
www.house.gov,
www.senate.gov,
and click on your represenatatives...and click hard!!!
Why should we have to open our business doors every day and face competion from all over the world,, but not be able to use free market competition to increase choices and lower costs for Broadband, enabling small businesses and home businesses to do business better and more efficiently, at less cost?
Right?

Barry Dennis
Ellicott City, Maryland
Posted by bdennis410 (175 comments )
Reply Link Flag
 

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