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Summary:

Forrester Research just released a new report, The State Of Internet Access, based on a survey of more than 4,500 US households and here are some of the key findings. * More than 50% of online US households are using broadband. * DSL is gaining ground […]

Forrester Research just released a new report, The State Of Internet Access, based on a survey of more than 4,500 US households and here are some of the key findings.

* More than 50% of online US households are using broadband.
* DSL is gaining ground on cable.
* Consumers are still more interested in price than speed.
* Broadband users show little desire to switch providers.
* ISPs will have to re-orient their marketing programs to simpler pricing, product offerings, and distribution in order to attract less tech-savvy mainstream consumers.

The report indicates that when it comes to broadband, we are moving towards the base of the pyramid and making money is going to be tougher, and both the phone and cable companies will have to come-up with a simpler way of selling broadband. In addition, the burden of sale is going to fall on cable guys who frankly have not done a good job of selling a cut-rate service.

Take for instance, Cox which is selling a lame 256 Kbps synchronous link for $24.95 per month in middle Georgia. Why would you buy that when DSL is cheaper! If cable cos don’t start pushing the budget offerings don’t, then perhaps they will lose the chance of stealing customers from the Bells. For the Bells, well, another sign, that despite all the talk about cool technology, the IPTV thing is not going to be that easy.

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  1. Jacob Varghese Tuesday, April 11, 2006

    DSL/Fiber thru the Bells require phone service.
    When more and more people are going with only VOIP or cell phones, it just doesn’t make sense to pay a minimum of $20 a month for a useless basic phone line.

  2. Many DSL providers are now selling “naked DSL” – that is, DSL that doesn’t require a phone line. This allows more and more DSL consumers to purchase VoIP service to replace their POTS line that used to be a requirement of DSL. I’m not sure how widespread “naked DSL” is though, so in many parts of the U.S., you may still have to sign up for a POTS line.

  3. I agree with you. I have been trying to figure out how to get broadband without the lame cable connection, which is fast but needs me to get a basic cable service. not sure if i am even interested in tv anymore.

  4. Jeff

    thanks for the comment, but if you can find naked dsl connection let us know. it is something we all have heard of but not seen ;-)

  5. Did anyone check out talktalk in the UK that offers broadband for free?

  6. I work for an ISP. We partner with Qwest for what they call “stand alone” dsl. It still technically requires the physical elements of a phone line. You, the subscriber, isn’t required to have phone services like dialtone, local calling. Also, of course, there isn’t a phone number associated with the ‘line’ (at least not one you can dial).

  7. “Consumers are still more interested in price than speed.”

    I think the fact that we still have NetZero commercials well attests to that. People are cheap and don’t care about speed. They think by upgrading their machines they are going to get faster Internet.

    These users are the same one’s who think that fixing spyware involves “defragging” a HD.

  8. I have “dedicated loop dsl” from Covad. Have had it for a year. Very reliable. While they purport to offer 6M down x 768k up my measured results are 2.2M down and 640k up. I’m 11,000 ft from the CO.

    I for one would like faster service and I don’t mind paying extra for it. Sadly, there are no options available.

  9. Internet access in South Africa pales on comparison to most of the connected world. Our fastest connection is a 1Mbps connection that costs roughly $100 a month just for the connection (other costs include a monthly line rental, monthly ADSL rental and ISP costs) which is generally reliable although with no guarantees. Most people can only afford a slower connection (somewhere between 192Kbps and 384Kbps).

    Our only fixed line network, Telkom, has started talking about rich content services and suchlike and while they pay lip service to the need to reduce prices, they seem to be more concerned about preserving their phenomenal profits at the expense of South Africa’s economic development. There has recently been talk about ramping up the speed of the ADSL packages although with no mention of a reduction in price.

    I guess what I am getting at is that this focus on keeping prices higher and offering faster speeds has a terrible impact on our local economy. I was really glad to see this post. It is an affirmation of much of the criticism that has been directed at Telkom locally.

  10. Jesse Kopelman Thursday, April 13, 2006

    The thing that will drive demand for higher speed internet is integration with the home theater. A decent HTPC is still > $1,000. Streaming medium hubs (I have the IO-Data AVLP2 myself) are light years away from being user friendly and fully functional even by computer standards. There is work in progress by companies like Toshiba to integrate such functionality into their home theater equipment, but it is only in its infancy and likely to be balked at every turn by cable and telco companies that want to control the user experience. We are probably 10 years out on this unless somebody decides to really spend the bucks and take the plunge to reinvent the industry. If Blockbuster were willing to bet the business on this , they could do it. Sony or Microsoft too, thanks to their rapidly evolving gaming consoles, but they don’t have the need to risk going head to head with telcos and cablecos, while Blockbuster is floundering and needs to take risks.

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