Bye-Bye Dial-Up: Broadband Ubiquity Chugging Right Along

Eighty-eight million American households will be Internet-connected by the year 2010, and 78 percent of those households will have broadband access, according to a report issued Thursday from Darien, Conn.-based Jupiter Research. Dial-ups may soon be a thing of the past.

The Jupiter report numbers represent a modest rate of growth in terms of users over the next five years, but a dramatic increase in those who switch to broadband usage from the currently more ubiquitous dial-up connection.

The numbers from 2004 show broadband-linked households to have reached 31.9 million, Jupiter reports, with Comcast carrying the leading 22 percent market share. The year's 8.2 million new broadband users represented a 35 percent spike from the year prior, residential DSL users increasing by 50 percent; cable users by 28 percent. DSL was usually cheaper than cable.

Predicted is a neck in neck race in the United States between cable modem and phone line-based DSL service, currently the most widely accessible and competitively priced technologies delivering broadband access. The winner will be cable modem systems, according to the report's lead analyst Joseph Laszlo, due to its early emergence into the market, and wider availability.

Top DSL distributors in the country are approaching full availability in their markets. SBC, for example, serves about one-third of US households, offering DSL to almost 100 percent of its customer base. Verizon and Bell South are said to be in the 80 to 90 percent range. Quest, covering more rural areas comes in around 70 percent.

Competing technologies for broadband distribution, such as the recently FCC-sanctified broadband over power lines (BPL) are not currently seen as significant contenders for widespread consumer access, nor as competitors to either cable for DSL distributors. BPL, in Laszlo's opinion, is not cost-effective, and radio-interference is a concern.

What will this mean for the average computer user, however long it takes for broadband to become ubiquitous?

"The biggest change that happens when a household gets broadband is the Internet becomes much more seamlessly woven into daily life," Laszlo said in an interview. "You don't set aside a block of time to go online and accomplish a specific set of tasks, you dip into the Internet constantly, as you need to, to do things as mundane as check the weather, look up a plumber, or find a movie time. The broadband era means the Internet can become a much more subtle, but much more continuous, part of everyday life.

"Businesses will find," Laszo said, when asked what wide broadband usage would mean to the commercial sector, "there's ever more they can do with the Internet as a marketing and sales channel to reach their customers. Broadband lets them deliver richer and more detailed experience to their customers online." The downside to that being growing customer pressure for immediacy, he added.

Telecom analyst and president of Boontown, N.J.'s Insight Research, Robert Rosenberg weighed in from a different perspective. "Everything will be visual," he said. "Ubiquitous broadband will signal the quantum change in end user communication. Interactive sessions will be far superior to what we have today, in terms of the teleconference, with high quality voice and visuals dominating internet traffic."

Laszlo believes price reductions, now as low as $15 a month in some areas, along with attractive bundles of service will change widespread consumer impressions of broadband as a luxury and lure new customers in huge numbers.

"Early broadband growth was restrained partly by the belief that it was a luxury," Laszlo said in an earlier Jupiter report. "This is changing in consumers' minds as lower pricing, compelling benefits, and greater familiarity from friends and neighbors all shift perceptions."

The Jupiter report's 80 percent penetration rate by 2010 may be a conservative number Insight Research's Rosenberg said, "if prices drop to a point where it is the same price as dial-up." Rosenberg noted that the US ranks "17th or 18th in broadband penetration globally. "A number of Asian countries and all Scandinavian countries far outrank us in broadband penetration. But usage will augment as more and more fiber optic lines reach homes, and prices go down."

Demographics of online users identified in the Jupiter report show the elderly to be the fastest growing segment of the internet community, doubling to 20 million in the next five years.

Fifty-percent of online users will get online both at home and at work by 2010. These multiple-place users will number 65 million adults.

Hispanics, African-Americans, low-income households, children and seniors comprise a "digital divide," Jupiter reported, "but this gap will narrow over time."