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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (11990)	10/18/2001 12:50:54 PM
From: Jim Oravetz	Respond to of 12823

Broadband User Growth Slows As Higher Costs Prove Obstacle By MELINDA PATTERSON GRENIER THE WALL STREET JOURNAL ONLINE High-speed connections will link 41% of all online households to the Internet by 2006 compared with 9% last year, even though growth of broadband services in the short term has been damped by economic and other factors. According to a new forecast from Jupiter Media Metrix, the number of households with broadband access will almost double this year to 10 million from 5.2 million in 2000, and then continue rising to 35.1 million by the end of 2006. Most of these users will "graduate" from slower dial-up connections, according to Joe Laszlo, a Jupiter senior analyst. He says Jupiter doesn't expect any net growth during the next two years in the number of households accessing the Internet over traditional telephone lines, as broadband migrants offset new dial-up customers. Overall, Jupiter is projecting that growth in the online population will slow to a compound rate of 7% a year between 2001 and 2006, when Mr. Laszlo says 86.3 million households, or 76% of all U.S. homes, will be linked to the Internet, compared with 62.8 million or 59% this year. A 7% growth rate is well below the roughly 19% annual rate Jupiter is projecting between 1999 and 2001. Broadband will cannibalize dial-up because of its speed and the fact that broadband lines are "always on," eliminating busy signals and dial-in time. Broadband hook-ups also allow users better access to bandwidth-hungry features such as Webcasts of audio and video. Record numbers of consumers have used streaming media since Sept. 11 to keep track of news related to the terrorist attacks; and several companies, including Microsoft Corp. and Intertainer Inc., are promoting new video-on-demand subscription services designed to appeal to broadband users. But broadband can be substantially more expensive than dial-up service, is more difficult to install and is currently available only in certain areas. Service providers are working to mitigate these disadvantages -- especially the access and installation barriers -- which Jupiter believes will expand the appeal of broadband over time. 1Record Number of Office Workers Used Web Broadcasts Last Month (Oct. 15) 2Disney, News Corp. Announce Deal to Offer Videos on Demand Online (Sept. 6) 3Consumers Have Yet to Find Relief from Phone and Cable Monopolies (May 3) But in the short term, growth has slowed, partly because prices for some cable-modem and telephone-based digital-subscriber-line-services jumped earlier this year. Providers jacked up fees in response to problems at competing firms that ultimately led to bankruptcy filings by Covad Communications Group Inc., Rhythms NetConnections Inc. and Northpoint Communications Group Inc. According to the Jupiter data, the number of cable-modem lines in service rose only 17% from the first quarter to the second, compared with quarterly growth rates in 2000 that ranged as high as 29%. DSL service took a bigger hit, with quarter-to-quarter growth through June 30 dropping to just 14%. Last year, growth rates were as high as 55%. To help reverse this trend, some service providers are announcing special deals to cut costs. Verizon Communications Inc. said Wednesday its offering a three-month introductory rate of $29.95 for DSL service. Users pay no activation or termination fees and get a free PC camera. The company said the promotion is designed to help it reach its target of 1.3 million DSL lines in service by year's end, compared with one million currently. Such deals could help close the gap between cable modems, which accounted for 72% of broadband links last year, and DSL, which accounted for 26%. Jupiter's data show the share for cable falling to 54% in five years, while DSL will rise to 40%. DSL has lagged behind cable partly because of costs. After installation, modem and other upfront expenses, the average DSL service typically runs between $50 and $60 a month, compared with $40 to $45 a month for cable, according to Jupiter's Mr. Laszlo. +++++++++++++ Some numbers to go along with the "broadband" discussion the last week or so. Jim