Demand For Broadband Remains Low

By: D. Ian Hopper, AP Technology Writer

(AP) Almost all U.S. families live in areas where a high-speed Internet connection is available, but many see no compelling reason to pay extra for it, the government reports.

A Commerce Department study, compiled from a variety of analyst surveys, cites a need for more music, movies, and games on the Internet in order to make broadband connections more popular.

“New applications and services that consumers want and businesses need will provide the tipping point for broadband demand and usage,” says the report from the department’s Office of Technology Policy.

Only 10% of U.S. households subscribe to high-speed access, lower than the rate in Taiwan, South Korea, Hong Kong, or Canada. About half of American families have some type of Internet access at home.

Several technology lobbying groups have endorsed different approaches to a national broadband strategy to encourage further use of technology that would allow even faster connections than current high-speed home networks.

The report partially agrees with that assertion. “Today’s broadband will be tomorrow’s traffic jam,” it says, but as a whole it stresses a need to increase demand rather than to build more and faster networks.

The report credits the defunct file-trading service Napster for promoting the purchase of high-speed access as well as PCs, CD-ROM writers, and large hard drives. But since Napster fell under legal action from the music industry, nothing similar has taken its place.

New file-trading networks tend to be hard to use and still are threatened by lawsuits, while the music industry’s legal online delivery services have been criticized as too expensive and restrictive. There remains no legal way to find most popular movies online.

Industry has the responsibility to devise copyright protection technology, according to the administration report. That runs counter to some congressional efforts, backed by media companies like Disney and News Corp. and opposed by electronics makers, to have the government approve a copyright technology that would be used in all electronic devices.

Another potential broadband explosion lies in online game playing. Internet multiplayer games are responsible for much of the increase in broadband use in Asia, the report said, and newer game-playing consoles such as Microsoft’s XBox and Sony’s Playstation2 either have or will soon be able use such networks.

The report cites a 2002 poll by Winston Group indicating that telecommuting would make broadband attractive as well. According to the poll, a third of Americans would forgo a pay raise to be able to work from home.

The high relative cost of fast access is also a hurdle. Most people pay about $50 per month for high-speed connections, whereas slower dial-up connections are only $20 a month. In an August Yankee Group survey, more than 70% of dial-up users cited cost as the main reason they aren’t upgrading to faster access.

Commerce Department Office of Technology Policy:

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