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6/24/2010
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Broadband Edging Out Fiber For Internet Service

More than 70% of users are generally satisfied with broadband speed and availability according to a study, calling into question the market demand for fiber.

A recent survey by Leichtman Research Group found that 71 percent of U.S. broadband customers are very satisfied with their current residential internet service, and rank it between 8 and 10 on a 10-point scale. By contrast, only 3 percent reported not being satisfied with their service, scoring it with a 3 or less, while just 26 percent said they're "very interested" in receiving faster speeds at home, the study revealed. The findings indicate that fiber efforts, such as Verizon's FiOS, are not yet in customer demand.

In its 8th annual study on the topic, Leichtman Research Group surveyed 1,600 random U.S. households using broadband last March and April to get its data. The findings are in line with similar research released earlier this month by the Federal Communications Commission. And while 77 percent of people said they don't know exactly what their broadband speeds are, they are generally satisfied with the speed of their internet connection, LRG reported.

The survey also revealed that 26 percent of broadband subscribers are interested in receiving faster internet access at home than they currently receive, while 44 percent are not very interested in the faster access.

Deploying fiber to the home is an expensive proposition for ISPs, with no compelling reason to make the investment if the demand isn't there. Verizon killed its plans to deploy FiOS fiber home service due to the lack of subscriber interest. Instead, the carrier is focusing on its goal of reaching a 40 percent FIOS TV penetration rate among homes that already have access.

The LRG survey findings also provided further positive news for ISPs. Less than 1 percent of all households that are interested in getting broadband cite cost as a reason for not subscribing.

"In just the past six years about half all U.S. households have begun subscribing to a broadband Internet service," said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc., in a statement. "During this period of rapid growth, consumers have remained very satisfied with their broadband service at home."

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