Broadband Technology - What Do Broadband Consumers Want?, Broadband For Businesses

Broadband technology refers to a high-speed, higher bandwidth connection to the Internet than is offered by a standard telephone line. The greater bandwidth of a broadband connection allows for more data to be transmitted at higher speeds than a conventional telephone line. While the definition of broadband data transmission rates vary, 144 Kbps (thousands of bits per second) represents a minimum broadband transmission rate, compared to 56 Kbps for a telephone modem. Unlike telephone line connections to the Internet, which typically involve dialing in to use the service, broadband connections are always on.

Broadband technology includes cable modem and digital subscriber line (DSL) connections to the Internet as well as a number of alternative technologies. DSL technology uses ordinary copper telephone lines to deliver a high-bandwidth connection to the Internet, with typical data transmission speeds ranging from 512 Kbps to 1.5 Mbps (millions of bits per second). However, DSL service requires a certain proximity to the DSL provider's central office, and DSL providers must set up many such offices to serve a large area. If a DSL subscriber was more than 20,000 feet from the central office of the DSL provider, then the service was typically unavailable.

Cable modems are the most popular broadband connection among consumers. To provide high-speed Internet access over cable lines, cable system operators have had to upgrade their systems and replace old one-way lines with lines that can handle two-way traffic. Alternative broadband technologies, mostly used by businesses, include leased lines, frame relay, fiber optics, asynchronous transfer mode (ATM), T1 and T3 lines, and integrated services digital network (ISDN). High-speed Internet access is also available through satellite services, although the number of subscribers remains small in comparison to cable modem and DSL subscribers.

According to a mid-2001 survey of consumer households from Kinetic Strategies, there were 7.6 million broadband subscribers in the United States and 1.7 million in Canada. Taken together, that represented 8.2 percent of all North American households. Among broadband subscribers, 70 percent or 6.4 million households connected to the Internet through a cable modem, while 2.9 million had DSL connections. In separate statistics, according to the Yankee Group, about 10 percent of U.S. households, or 5.4 million, had a broadband Internet connection at the end of 2000.

A mid-2001 report from Strategy Analytics predicted that by the end of 2001, 14.1 percent of all North American households would have a high-speed Internet connection. By 2005, the study predicted that 53 percent of North American households would have a broadband connection to the Internet. In Europe, by contrast, Strategy Analytics found that only 3.3 percent of all European households would have a high-speed Internet connection at the end of 2001. Within Europe, the rate of penetration varied significantly by country, with Sweden having the highest penetration at 9.4 percent, compared to the lowest rate in England of just 0.9 percent. Other countries surveyed included

• the Netherlands, with 6.1 percent of all households having a broadband connection
• Germany (4.8 percent)
• Spain (3.6 percent)
• France (2.0 percent)
• and Italy (1.1 percent).

The percentage of households having a broadband Internet connection in 2004 was projected to increase dramatically in European countries, led by

• Sweden with 37.3 percent
• the Netherlands (33.9 percent)
• Germany (27.4 percent)
• France (22.6 percent)
• Spain (21.9 percent)
• the United Kingdom (19.5 percent)
• and Italy (10.6 percent).

While broadband offers consumers many benefits, it appeared that its higher costs, relative to dial-up services, were hindering the rate of broadband adoption among consumers. In addition, there was no "killer application" to drive demand for broadband, particularly in the wake of Napster's demise as a free music-trading network. In other words, broadband to date offered no new abilities that dial-up users didn't already have, only the ability to do existing tasks faster and perhaps more reliably when large files were involved. Benefits such as being able to view streaming media better or download Web pages faster were often not enough to make consumers dissatisfied with a simple telephone line connection to the Internet. As of mid-2001, most U.S. broadband services to consumers were priced at more than $40 per month.