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Web surfers may want high-speed Internet connections, but they're not always willing to pay the price such access often commands. As a result, the huge jump in broadband subscriptions over the past four years--488 percent, according to a recent study--appears to be leveling off.

The study also identifies the speediest states and points to trends in broadband adoption. "Broadband in the States 2003" was conducted by the AEA (formerly the American Electronics Association) and released this week. It defines broadband as a connection that is faster than 200 kilobits per second in at least one direction.

The report examines growth rates and trends, and offers some interesting insights into what we might be able to expect from broadband providers in the future.

On the Rise

California leads the nation in broadband subscribers, boasting 2.6 million connections, followed by New York, Florida, and Texas, the AEA finds. California also experienced the highest increase in broadband subscribers during the period studied, between December 2001 and June 2002. The state added 557,000 new broadband connections.

Massachusetts ranks highest in broadband concentration, with 239 subscribers for every 1000 households. Idaho boasted the highest overall percentage growth from December 2001 through June 2002, with a 134 percent increase in subscribers.

Overall, the number of broadband connections in the United States has increased dramatically since 1999, according to the AEA's study. In June 2002, 16.2 million households had a broadband connection, up from 2.8 million in December 1999. (AEA's data on the number of high-speed connections is obtained through data from the Federal Communications Commission. June 2002 is the most recent complete data available from the FCC.)

While that 488 percent rise is sharp, plenty of room remains for growth: Only 15 percent of U.S. households have a broadband connection. And the growth seems to have hit a plateau, at least temporarily. From June 2001 through December 2001, broadband connections increased at a rate of 33 percent. However, from December 2001 through June 2002, that rate slowed to 27 percent, with the number of high-speed households rising from 12.8 million at the end of 2001 to the 16.2 million connections in mid-2002.

"There's a little bit of tension with these numbers, because there's a sense that broadband is not really being deployed anymore," says William T. Archey, AEA president and chief executive. "But if you look at the data, these numbers [of new broadband deployments] are really quite good."

"We have, however, reached a point over the last six months where we're seeing the lowest rate of increase," he admits. "The question is, has broadband peaked?"

Paying the Price

The biggest factor holding back potential customers is the relatively high price, Archey says. Many consumers consider broadband, which can cost about $50 a month, an unnecessary luxury and not a household necessity, he says.

But we can expect those prices to fall, he says. Earlier in May, when the AEA was finishing its study, Verizon announced a price drop on its DSL service, Archey notes, adding that he expects further cuts in the future.

While price is the biggest factor, other impediments to broadband adoption remain. One is the number of people who have high-speed access at work and therefore don't feel the need to upgrade their at-home dial-up connection. But having high-speed access at work can also spur at-home upgrades, Archey says.

"Having [broadband] at work may make you think you don't want to dial up at home," he says. "And if you have a teenager who wants to do research for school and use an instant messenger to chat with their friends, you'll get a great deal of encouragement from them to go to broadband."

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