Friday

Broadband, a
revolution that was

Ignore doubters. It's already come and settled in.

By Toni Fitzgerald

Reading the headlines of late, one might think the revolution promised by broadband hadn't arrived and was not likely to anytime soon.
   It is not true. The broadband revolution has arrived, doing so apparently when the pundits weren't looking.
   High-speed internet connections may still lag dial-ups in total subscribers, but they are in place where it matters most: in the workplace and on college campuses and wherever serious users of the internet bother to congregate.
   Dial-up users are more and more the casual internet user, and there are fewer and fewer of those as the internet takes its place among established media.
   Broadband users, though still a minority, account for a a disproportionate share of the total amount of time spent online, and that share is growing.
   Meanwhile, the pace at which people are signing up for broadband is escalating.
   A DSL Forum report this week found that 1.67 million new subscribers worldwide are signing up for broadband each month. That’s more than 15 million new customers this year, a broadband record.
   The number of new users signing up for broadband in the U.S. this year rose by 50 percent, according to InStat/DRM. That’s compared to two years ago, when NetSmart found that just 44 percent of those surveyed even knew what broadband was.
   Perhaps what's most interesting is that these increases are occurring when the cost of broadband is rising. More people are signing up for broadband, even with rising prices. Normally, technologies see adoption speed up in acceptance when prices begin to fall.
   The same late adopters who waited for dial-up prices to drop (remember when America Online charged an hourly fee) are probably waiting for the same to happen with broadband. That could take another year or two.
   The market research firm ARS found that cable broadband, currently the dominant type, jumped in price from $43.21 to $44.95 in the first four months of the year, a 34 percent increase.
   DSL telephone access also increased in that time, from $51.09 per month to $51.82.
   Most dial-up services, on the other hand, cost a relatively cheap $14.95 to $24.95 per month.
   ARS found that 91 percent of broadband companies that have been in business since last year have raised rates in that time. They can still afford to, since broadband appeals to a higher-income crowd.
   Twenty-eight percent of broadband-equipped households have incomes of more than $100,000, while just 4 percent have incomes less than $35,000, according to InStat/DMR.
   "We expect that this trend of increasing prices will hamper the widespread adoption of broadband services and that the vast majority of users will continue to access the internet via dial-up connections for the foreseeable future," ARS analyst Mark Kersey said when the study was released.
   Meanwhile, high-speed connections make up an increasingly high percentage of the surfing being done on the net.
   They’re a necessity at work. When you count at-work and college users, broadband makes up 32 percent of the online population.
   Eighty-six percent of workplaces use broadband or network connections, comScore Networks’ Media Metrix finds. Dial-ups are too cumbersome for the workplace and networks make business sense for medium to large companies.
   According to Media Metrix, broadband users accounted for a disproportionate percentage of total internet page views (49 percent) and time spent online (44 percent) in October.
   Broadband users can spend their online time more productively than dial-up users.
   They account for more page views because they can click through sites faster, with less download time. They can stay on for longer because they don’t have to worry about tying up the phone – they are on a separate line.
   The Media Metrix survey found, not surprisingly, that broadband users are more frequent internet surfers than their dial-up counterparts. They spend virtually every day of the month online, while dial-up users connect only 18.
   Again, for those who spend a lot of time online, the extra price is worth it. But for the others, MSN, AOL or other ISPs suffice.
   Since many people have high-speed connections at work anyway, broadband isn’t quite a necessity at home for the high price. Yet it’s enough of a threat that AOL recently trotted out a special plan for non-AOL broadband subscribers, trying to lure them back to the AOL family for community extras, if not actual internet service.
    Some projections put 2007 as the year when broadband connections outnumber dial-ups. But by then no one will be wondering when the broadband revolution was set to arrive.
   More likely they'll be talking about how tough things were, way back when, when you had to go through all these intricate steps just to get online.

Broadband vs. dial-up usage October 2002
		Total	Broadband	Dial-up
	Total Unique Users (000)	142,728	46,039	96,689
	% Composition Unique Visitors	100%	32%	68%
	Average Daily Visitors (000)	99,661	44,055	55,606
	Total Minutes (MM)	193,404	85,174	108,230
	Total Pages Viewed (MM)	364,431	178,709	185,722
	Average Pages per Usage Day	118	131	108
	Average Minutes per Visitor	1,355	1,850	1,119
	Average Pages per Visitor	2,553	3,882	1,921
Source: comScore Networks’ Media Metrix

Internet site categories, ranked by broadband visitor composition October 2002
Date	Total broadband visitors (000)	Broadband visitors as a % of total visitors
Total Internet	46,039	32%
Taxes	1,200	55
Radio	5,810	52
Shipping	7,834	52
Car Rental	1,691	49
Politics	4,423	49
Classifieds	7,315	48
Jewelry/Luxury Goods	3,953	48
Movies	13,834	47
Hotels/Resorts	6,326	47
Weather	17,323	47
Home Furnishings	5,012	47
Consumer Goods	7,544	46
Multimedia	25,137	46
Online Gambling	16,388	46
Comparison Shopping	10,132	45
Source: comScore Networks’ Media Metrix

-Toni Fitzgerald is a staff writer for Media Life.

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