Broadband Internet Access Plans Improve As ISPs Compete

While some bemoan the declining position of the United States in the global broadband hierarchy and the FCC squabbles with cable companies about who should have access to their networks, more and more people in this country are getting on the broadband bandwagon.

High Speed Broadband Internet Use Growing

Competitive pricing and greater availability are speeding up broadband adoption in U.S. homes. The number of broadband households in the United States will more than double by 2010, from 32 million in 2004 to 69 million, according to a report by Jupiter Research. Overall growth in the online population is expected to be modest, rising to 88 million in 2010. The prediction obviously underscores the importance of the growing segment of broadband users and adds more fuel to the already heated competition between the cable companies and the Telcos.

Cable and Phone Companies Compete for Broadband Internet Access Subscribers

Predictably, the major players, cable and Telcos providing DSL, will continue to control the market, unchallenged by competing technologies.  Major U.S. telephone companies are closing in on the cable operators' dominance of the broadband market, as subscription rates on DSL surpassed those for cable for the first quarter of 2005. Since broadband was first made available, in the late 1990s, telephone companies have lagged behind cable companies in terms of subscribers, but the lead is diminishing.

Although both cable companies and phone companies reported record growth in subscriptions, large telephone companies added 1.4 million DSL subscribers during the first quarter, while cable companies added 1.2 million lines. Currently, about 35.9 million households subscribe to the top 20 telephone and cable companies in the United States.

Internet Service Providers Are Offering Low Prices and Adding Features to Internet Service Plans

In order to be more competitive, a number of phone companies have begun to advertise deep discounts for new subscribers and offer tiered pricing for different levels of broadband speed, consequently improving their standing in the market. Another key development is the strategy of combining services and adding additional capabilities, which is becoming increasingly attractive to subscribers. Cable companies already offer high-speed Internet access and TV services. Many, including Time Warner and Cablevision, also have added voice service.

Meanwhile, phone companies also are trying to add a triple-play bundle that includes voice, video and data. Verizon is building out its FTTP network, called Fios, which will deliver telephony, high-speed Internet and TV service. SBC Communications also is upgrading its network by putting more fiber closer to customers. Although it is falling short of running fiber to individual homes, it nonetheless plans to offer the triple play of services over its network.