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2003 ISP Directory
Broadband Broadens Its Pitch
Firms Bundle Services, 'Tier' Prices in Effort To Lure New Customers

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Transcript: Rob Pegoraro was online on Feb. 3 to discuss the ISP directory update.
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By Mike Musgrove
Washington Post Staff Writer
Sunday, February 2, 2003; Page H01

How goes the broadband revolution? It depends on how you read the numbers.

By the research firm ARS Inc.'s figures, there are about 15 million broadband subscribers in the United States today, with 9.4 million using cable modems, which ride on the same wiring as cable TV, and 5.4 million on digital subscriber lines, which piggyback on telephone circuits. Not bad -- but of the 70 percent of American households that could get either cable-modem or DSL service, only 13 percent or so have signed up.

Broadband isn't just for early adopters anymore, but it's not for everyone either.

Erika Jolly, vice president of broadband marketing at EarthLink Inc., the nation's third-biggest Internet provider, classifies those who are signing up for broadband now as the "early majority" -- people who are interested in technology but who have a considerably lower pain threshold for price and installation issues than the first wave of subscribers.

"Early adopters are optimistic and have a lot of patience," said Jolly. "Early-majority folks are a little more pessimistic; they are very concerned about 'What is the value to me as a consumer?' "

Of EarthLink's nearly 5 million users, about 780,000 use broadband connections.

Price has been one brake on any widespread adoption of high-speed Internet access -- but never fear, that's a problem that some of the best marketing departments on the globe are working on.

The average monthly cost of cable-modem access crept up from $33.22 in the second quarter of 2000 to $45.31 two years later. DSL prices have been a little more stable, rising from $50.90 to $51.36 over the same period, according to ARS.

But just about every broadband provider (85 percent, according to ARS) has ongoing promotions to make the first three, six or 12 months cheaper for new customers.

So in some ways, prices are going both up and down at the same time. "The effective annualized monthly prices for broadband actually declined when you work in all the promotions, though the absolute prices are going up," said Mark Kersey, an analyst at the firm.

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