Broadband Adoption Slows

The number of U.S. residents connected to the Internet through broadband services increased by 18 percent during the first half of 2003, but that rate of growth slowed from the second half of 2002, according to the U.S. Federal Communications Commission.

The FCC's latest data on the deployment of high-speed Internet connections, released Monday, finds the number of high-speed lines increased from 19.9 million to 23.5 million during the first six months of 2003. That 18 percent increase compared to a 23 percent increase during the last half of 2002. For the full year period ending June 30, 2003, high-speed lines increased by 45 percent.

Defining Terms

The FCC defines "high-speed" lines as those providing speeds exceeding 200 kilobits per second in at least one direction--often residential service such as digital subscriber lines. "Advanced services" lines are those that provide services at speeds exceeding 200 kbps in both directions. Internet service providers with at least 250 high-speed connections in service in a state are required to report their statistics.

Monday's FCC report doesn't go into the policy implications of the rate of broadband growth, says an FCC spokesperson. But the FCC and some members of Congress continue to promote broadband to U.S. residents. In April, the FCC's Technological Advisory Council tried to examine why more U.S. residents weren't buying broadband. Among the reasons discussed then were cost and the lack of applications that needed broadband.

According to the report, of the 23.5 million high-speed lines in service, 20.6 million served residential and small business subscribers. That's a 19 percent increase from the 17.4 million residential and small business high-speed lines reported six months earlier, according to the FCC.

A total of 16.3 million lines provided advanced services, those services at speeds exceeding 200 kbps in both directions. Advanced services lines increased 32 percent during the first half of 2003, from 12.4 million to 16.3 million lines.

Other Trends

High-speed connections in service over asymmetric digital subscriber lines increased by 19 percent during the first half of 2003, from 6.5 million to 7.7 million lines, compared to a 27 percent increase, from over 5.1 million to 6.5 million lines, during the preceding six months.

High-speed cable modem service increased by 20 percent during the first six months of 2003, from 11.4 million to 13.7 million lines, compared to a 24 percent increase, from 9.2 million to 11.4 million lines, during the second half of 2002.

Among the faster "advanced services" lines, ADSL increased by 16 percent during the first six months of 2003, compared to a 43 percent increase for cable modem service. During the preceding six-month period, the rate of growth of ADSL, at 18 percent, was slightly lower than cable modem service, at 22 percent. For the full 12-month period ending June 30, 2003, advanced services lines for ADSL increased by 37 percent and cable modem connections increased by 75 percent.

A similar study by the AEA (formerly the American Electronics Association) released in May showed consumers are still adopting high-speed Internet access, but at a slower rate than in the past. The AEA study, which relied partly on FCC data, suggested the adoption is leveling off because consumers want lower rates.