Report: Demand Low for Broadband

WASHINGTON, Sept. 23 -- Almost all US families live in areas where a high-speed Internet connection is available, but many see no compelling reason to pay extra for it, according to a Commerce Department study compiled from a variety of analyst surveys.

The Associated Press (AP) said today the report 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 percent of US 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, the report says.

"Today's broadband will be tomorrow's traffic jam," it says, but 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.

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 2002 Yankee Group survey, more than 70 percent of dial-up users cited cost as the main reason they aren't upgrading to faster access, the AP reported.

For more information, visit: www.ta.doc.gov/OTPolicy/default.htm