Broadband Battles Bring Benefits

Prices for the two most popular forms of broadband access have plummeted
this year as providers step up efforts to lock in subscribers, according to
new research from Point Topic.

During the first half of the year, the average monthly cable broadband bill
dropped $7.20 to $32. By comparison, the average monthly DSL charge was cut
$2.50 to $29.50, according to Point Topic.

Cable companies slashed prices more drastically to try and win back market
share, a strategy that will likely continue, Haroon Butt, a Point Topic
senior analyst, said in a report.

“With cable operators showing every sign of waking up to the challenge from
DSL, consumers can look forward to a period of increased competition, and we
fully expect aggressive pricing strategies,” Butt said.

Not all broadband providers cut rates. Yahoo Japan jacked up its prices for
entry-level consumer service by 20 percent. Even with the bump, it
is the cheapest DSL supplier in the world, Point Topic said.

“Perhaps they are testing the waters; perhaps they’ve found the right
pricing level for their market; or perhaps they look at everyone else and
wonder why they shouldn’t make a better margin,” Butt said.

The study comes at a time of significant activity in the broadband market.
New applications, most notably Voice over IP ,
is helping convince dial-up holdouts to upgrade to the faster service.

Service providers who recently reported second-quarter results reported big
gains in broadband numbers. For example, Verizon added 280,000 DSL
customers during the three months, giving it a total of 2.9 million lines.

In the last year, it has notched more than 1 million new customers for
broadband, as customers embrace high-speed applications or buy the service
as part of a bundle.

In addition, new forms of access — including fiber-to-the-premises
, are beginning to move off the drawing board and into the
community. In addition to Verizon , SBC is
making a
major commitment to FTTP.

Not only will the fiber deliver high-speed Internet access, but it will also be
capable of handling voice and video.