Broadband Use: Growing or Not?

Depending on who you ask today, broadband usage is either slowing or it is still growing and has hit a critical
mass of more than 50 percent of users.

A Nielsen/NetRatings study released today announced that,
for the first time in its surveys, home broadband usage soared from 38 percent last July to 51
percent of the American online population this July. But Leichtman Research Group begs to differ.
An analyst report from that group claims broadband growth has
slowed to its lowest rate in a year.

Nielsen found that 63 million Americans used broadband compared with 61.3 million Americans who used
dial-up (narrowband) in July 2004. Those numbers represent a 47 percent year-over-year growth rate for broadband
and a 13 percent decline for narrowband.

“Despite a plateau in the growth of U.S. Internet access, we’ve seen continued high double-digit growth in
users’ broadband access,” said Marc Ryan, senior director and analyst of Nielsen/NetRatings, in a statement.
“We expect to see this aggressive growth rate continue through next year when the majority of Internet users
will be accessing the Internet via a broadband connection.”

Nielsen further broke the research down into age groups. According to the firm,
it’s the younger generation of Web users that
is adopting broadband in greater numbers than other demographics. In its report, the online
demographics of broadband users is clearly slanted in favor of the younger generation.
At 59 percent the 18-20 age group had the highest overall broadband adoption numbers. Those 35 years and older
had lower rates of broadband adoption than those younger than 35. The lowest broadband adoption rates were found
in the 65- to 99-year-old category at only 34 percent. Apparently older Americans aren’t in as much a hurry as
their (great) grandchildren.

“Not surprisingly, the younger set of adults, kids and teens, who grew up with PC technology, have the highest
penetration of broadband access,” said Ryan. “The norm
of waiting for a page to load has gone by the wayside through increased broadband access.”

By contrast, Leichtman Research reported that broadband growth is at its lowest point in more than
a year. According to the firm, the top 11 cable companies added almost 831,000 new broadband customers, which
represents the industry’s lowest growth numbers since the fourth quarter of 2001. The firm
also reported that the nine largest phone companies added just over 896,000 new broadband users.
These numbers indicate the combined cable
and phone growth numbers are the lowest total in over a year.

So is broadband growth growing or is it stalling? Two other research reports that came out earlier this year
would seem to indicate broadband is growing, and that it has, in fact, hit critical mass.

In June, the FCC reported
that broadband use jumped
42 percent last year. It also found that ADSL
marginally outpaced cable broadband adoption in the last year.

A Pew Internet and American Life Project
study in April
also found that broadband has indeed crossed the so-called tipping point. Pew reported that 55 percent of all
adult Internet users have high-speed access either at home or work.

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