Why fast access is stuck in the slow lane

Everyone wants a big, fat data pipe connection to the Net. Yet we're still putting up with trickle technology. What's up with that?

The recent AOL/Time Warner deal is all about broadband: finding new ways to supply it, new ways to use it and (most of all) new ways to profit from it. But while this megamerger may indeed accelerate implementation and adoption down the road, right now a surprisingly small percentage of Americans, and even fewer Europeans are taking the fast-access plunge.

International Data Corporation (IDC) predicts that one in three American homes will surf the Net over a high-speed connection by 2003. However, considering that fewer than one in 16 enjoy fast access today, broadband firms have their work cut out if they intend to make that figure a reality.

Until recently, high-speed Internet connections were available mainly to businesses and those willing to pay hundreds or thousands of dollars a month for broadband service. The development of cable modems, digital subscriber lines (DSL), ISDN (Integrated Services Digital Network) and satellite data services has made high-speed Net access an option for millions of American homes.

Says Robert Rosenberg, president of market research firm Insight Research, "One-hundred million households are salivating and waiting for service."

Yet recent research suggests that few are actually taking the fast-access plunge. New data from Nielsen/NetRatings indicates the majority of home Net users still connect at 33.6Kbps or less. High-speed connections such as ISDN, T-1, cable and DSL are used by only 5.9 percent of home users.

So what is going on here?

First, securing high-speed access is easier said than done. To qualify for DSL service, for instance, you must live within 3.3 miles of your phone company's switching station. Second, broadband is still too expensive for many, costing around $600 (£372) per year. Then there is the hassle factor. Ramping up for fast access remains too complicated for many home users.

Consider some of the common complaints from people who use cable modems and DSL lines, the leading methods of fast access in homes:

  • inconvenient installation,

  • poor customer service,

  • computer problems and

  • difficult troubleshooting.
Analysts predict that widespread high-speed access will translate into serious business for a number of Net-related firms, particularly those in the e-commerce industry. According to US analyst firm Nielsen/NetRatings, compared with owners of slower modems, owners of high-speed modems:

  • go online 83 percent more and view 130 percent more Web pages;

  • earn more money (37 percent earn more than $75,000 annually, as compared with 27 percent with 28.8/33.6Kbps modems); and

  • have more education (59 percent have a high concentration of college degrees, compared with 50 percent of slower modem users).

If a third of US homes are to be wired for fast access within three years, broadband firms have their work cut out for them, all right. They must find a way to make high-speed connections more widely available, more affordable for the masses and easy enough for even well-educated rich people to figure out.

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