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High-speed Internet usage soars

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High-speed Internet usage soars

Broadband bypasses dial-up for first time

By Jane Weaver

MSNBC

March 5 — People accessing the Internet through a high-speed connection accounted for more than half of all time spent online in January, Nielsen/NetRatings said in a report released Tuesday. It’s the first time broadband access bypassed dial-up Internet access.

Even as the growth of high-speed Internet, or broadband, access stalls, hurt by the soft economy, the amount of time spent online by people with a speedy connection continues to skyrocket.

The Internet research and measurement firm said high-speed Web surfers logged 1.19 billion hours — or 51 percent of the total 2.3 billion hours spent online during the month.

Total time spent online by high-speed Web surfers rose 64 percent from a year-earlier while time spent online by dial-up surfers fell 3 percent from 1.18 billion hours to 1.14 billion.

The report comes as the Internet industry, telephone companies and cable and satellite TV operators look to the burgeoning broadband market as an important new source of revenue. Furthermore, the widespread rollout of broadband Internet is considered vital to the U.S. economic recovery. Several congressional bills have been introduced to stimulate broadband penetration.

“Half of the hours spent online come from broadband usage,†said T.S. Kelly, Nielsen//NetRatings analyst. “From a business standpoint, broadband is just beginning to get interesting.â€

There are 29.1 million active users in 10 million U.S. households accessing the Internet through a speedy Internet connection. The at-work broadband population jumped 42 percent to 25.5 million office workers for the same period, compared to 18 million the year-earlier, according to the online research firm.

People with broadband access at home spend an hour and 55 minutes on the Internet each day, according to a recent study by Arbitron Webcast Services. They also spend about 2 hours and 5 minutes a day watching TV.

“Consumers like broadband and when they have it they use the Internet a whole lot more,†said Bill Rose, general manager and vice president of Arbitron Webcast. “The access to broadband truly changes people’s media consumption patterns.â€

There are roughly seven million households who use broadband services through a cable modem and 3.3 million who subscribe to broadband through a high-speed telephone line or DSL, according to the Yankee Group.

Although the number of people who use broadband has increased steadily since its launch about 5 years ago, the economic downturn has cooled its growth.

“Broadband is still largely an urban phenomenon,†said Kelly. “The costs are still high, customer service is still sporadic and content is still scattershot.â€

For broadband to reach mass market penetration, approximately 50 percent of U.S. households, the companies which provide high-speed services are going to have to get “more creative in the pricing,†said Imran Khan, broadband analyst with the Yankee Group.

The monthly cost for high-speed Internet access can run $50 a month or more.

Overall pricing is a very strong reason it’s not growing faster,†said Khan. [internet access or cable companies] have to narrow the gap between dial-up access and low-end broadband service,†which could be four times faster than dial-up.

Broadband penetration could also get a boost from the rivalry between cable and satellite TV operators as they try to steal each others customers with special promotions.

For example, satellite company DirecTV is currently offering cable broadband subscribers two free months for signing up for its DSL service for a year.

Separately, Salomon Smith Barney analyst Clark Westmont said in a report released Monday that high-speed subscriber growth in the fourth quarter beat its expectations, primarily due to ADSL (asymmetric digital subscriber line) growth in Europe and Asia.

In a research note, Westmont said that the recent bankruptcy of ExciteAtHome Corp. caused no visible effect upon cable modem subscriber additions in North America.

The race between ADSL, delivered via ordinary telephone lines, and cable modems is a little contrived at the moment, defined more by availability than superior service, Westmont said. In 2001, there were nearly 13 million cable modem subscribers compared to 16 million ADSL subscribers and 16.7 million digital set-top box subscribers.

In North America, Salomon said cable modems continue to maintain the majority of the high-speed market with 62 percent of the 13.4 million North American high-speed connections.

Reuters contributed to this story.

http://www.msnbc.com/news/719543.asp?cp1=1

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