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The Marketplace Reader

High-speed Net service hits slowdown

Richard Core Aug 12, 2008

Wired’s “Epicenter” blog has an item based on reports out this week that say Americans’ adoption of broadband service hit a seven-year low last quarter, while super-high-speed connections are widely available in countries such as Japan.

The reason? Cost.

One key holdup for broadband adoption last quarter, according to a Leichtman Research Group report, is that the telcos’ pushed higher-speed, premium services (such as Verizon’s FiOS and AT&T’s U-verse) at a time when basic DSL was a financial stretch for many Americans.

“Net broadband additions in the quarter were the fewest of any quarter in the seven years [Leichtman Research Group] has been tracking the industry,” said Bruce Leichtman, LRG president and principal analyst, in a prepared statement. “The decline in additions this quarter compared to the same period last year was exacerbated by Verizon and AT&T’s emphasis on selling higher speed FiOS and U-verse bundled services, often at the expense of traditional DSL service.”

The item cites a Communications Workers of America report that says the average U.S. Internet speed is 2.3-megabits per second, up just 0.4 mbps from last year. Japan, by contrast, boasts average Net speeds of roughly 63-mbps.

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