Broadband is coming at high speed

Home users could have high-speed Internet access sooner than previously thought.

The US market for residential high-speed Internet services will grow to 3.3 million subscribers this year, and reach 16.6 million subscribers in 2004, according to a report released today by the Yankee Group. The study, "Cable Modems and DSL: High-Speed Growth for High-Speed Access", cited cable industry consolidation and competition from local phone companies as driving the expected growth in broadband.

The installed base of residential high-speed Internet access for 1999 was 1.4 million, with nearly 80 per cent of those homes using cable modems, the study found. By the end of this year, 41 per cent of US households will have access to cable modem service but only 24 per cent will have access to digital subscriber line.

Consolidation among cable operators will eliminate some of the cost barriers for small operators to upgrade to two-way cable modem-capable infrastructures, causing cable modem deployment to grow, suggested Bruce Leichtman, director of Yankee Group's Media & Entertainment Strategies practice, in a release announcing the report. But as local telephone carriers make competing DSL service widely available at better prices, the report predicts that cable's share of the residential broadband market will shrink to 42 per cent by the end of 2004.

The bottom line is that consumers simply want access. The Yankee Group study found that nearly two-thirds of PC-owning households are interested in high-speed access; 30 per cent would prefer to get service from their telephone company and 20 per cent like their cable provider better. But 50 per cent said they had no preference.