Broadband Has Become Mainstream

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April 06, 2004 (11:54 AM EDT)

Broadband has become a mainstream service in the United States, with 1 in 5 households using high-speed connections to access the Internet, a market research firm said Tuesday.

As of the end of last year, there were 27 million U.S. business and residential subscribers, clearly making broadband mainstream, In-Stat/MDR said.

The subscriber base is now large enough to open up markets for other services that can take advantage of high-speed connections, such as home entertainment/networking, voice over IP and online gaming.

"This starts a cycle where growth in both broadband and applications feed the growth of each other," In-Stat analyst Daryl Schoolar said in a statement.

The research firm, however, warned that higher broadband usage means service providers will be providing customer service to subscribers less experienced with computers and the Internet than early adopters.

Therefore, more customers will have less patience for dealing with technical issues, and less likely to perform self-diagnosis, opting instead to just picking up the phone and calling customer service. Communicating with mainstream users will also be more difficult.

"However, the opportunities will outweigh the challenges," Schoolar said.

Other findings in a report released Tuesday by In-State were that cable modems continued to be the most common broadband access technology In the United States, with DSL remaining in second.

At the end of 2003, Comcast and Time Warner accounted for the majority of all cable modem subscribers. Overall, six cable operators had 91 percent of the U.S. cable modem market.

SBC and Verizon accounted for the majority of U.S. DSL subscribers at the end of 2003. Overall, five providers accounted for 94 percent of the U.S. DSL market.