While the cell phone business-with the notable exception of Motorola--seems to be booming in the United States, the broadband business is not. Two new reports claim broadband providers suffered serious declines in new second quarter subscribers and those that already subscribe to high-speed services endure speeds well below global leaders such as Japan and South Korea.
According to an Aug. 6 report by Strategy Analytics, telco broadband providers AT&T, Verizon and Qwest saw new broadband subscribers "fall precipitously" in the second quarter. AT&T, which signed up 465,000 new subscribers in the first quarter, only signed up 34,000 in the second quarter. Verizon, with 266,000 Q1 new subscribers, fell to just 54,000 new hookups in the second quarter. Qwest tumbled from 90,000 to 31,000 new subscribers.
Cable broadband providers Comcast and Time Warner fared better but still had sharp declines in new customers. Comcast signed 279,000 new subscribers in the second quarter after loading up 492,000 new customers in the first quarter. Time Warner saw new customers decline by more than 100,000, from 304,000 in the first quarter to 201,000 in Q2.
"There is a fair amount of seasonality in broadband, so a dip in the second quarter is not altogether unexpected," stated report author John Lee. "However, the magnitude of this decline suggests that the current economic environment is hampering the ability of service providers to garner new customers."
Ben Piper, director of the Strategy Analytics Multiplay Market Dynamics Service, noted, "This is not a situation where existing consumers are dropping broadband en masse. Rather, the number of new subscribers is dwindling. In lean economic times, people are less inclined to assume an additional recurring monthly expense."
Meanwhile, a new report released Aug. 11 by the CWA (Communications Workers of America) claims the median download speed for U.S. broadband connections is 2.3 mbps (megabits per second), well below Japan's globally leading 63 mbps in addition to South Korea's 49 mbps, Finland's 21 mbps, France's 17 mbps and Canada's 7.6 mbps.
The report is based on the CWA's speedmatters.org site, which offers an Internet speed test and measures how fast computers can upload and download data. The site has tested the speeds of almost 300,000 computers. In its second report on American broadband speeds, CWS said upload and download speeds did not noticeably improve from 2007 to 2008.
The 2007 results showed the median download speed for the 50 states and the District of Columbia was 1.9 mbps and the median upload speed was 371 kbps.
"In other words, between 2007 and 2008, the median download speed increased by only four-tenths of a megabit per second [from 1.9 mbps to 2.3 mbps], and the median upload speed barely changed [from 371 to 435 kbps]," the report states. "At this rate, it will take the United States more than 100 years to catch up with current Internet speeds in Japan."
Topping U.S. states in broadband speeds in 2008 was Rhode Island with median download speeds of 6,769 kpbs and upload speeds of 1,624 kbps, followed by Delaware (6,685-1,483), New Jersey (5,825-1,419), Virginia (5,033-837) and Massachusetts (4,564-1,314).
Alaska, for the second consecutive year, averaged last in the United States in broadband speeds with download speeds of 814 kpbs and upload speeds of 246 kpbs. Following Alaska were North Dakota (1,164-332), Montana (1,320-378), Wyoming (1,325-393) and Idaho (1,326-364).
"We need high-speed Internet for our homes, schools, hospitals and workplaces. Speed defines what is possible on the Internet," the report states. "It determines whether we will have the 21st century networks we need to create the jobs of the future, develop our economy and support innovations in telemedicine, education, public safety and public services to improve our lives and communities."
The CWA concludes, "Most U.S. Internet connections today are not fast enough to permit interactive home-based medical monitoring, multi-media distance learning or to send and receive data to run a home-based business."