Who needs broadband Internet access? Recent studies suggest that the majority of U.S. customers are content with the quality of their dialup Internet service.

by Michael Pastore of cyberatlas.internet.com [November 14, 2001]

Nearly three-quarters of the dialup Internet subscribers in the United States are content with the quality of their Internet service, which is bad news for high-speed providers trying to convince consumers to switch to broadband.

According to a Parks Associates survey of 2,500 U.S. households done in July 2001, almost 75 percent of the 46 million dialup Internet subscribers in the United States are content with the quality of their Internet service.

"The greater part of new broadband subscribers in the next few years will be households currently using dialup or narrowband Internet service," said Michael Greeson, senior analyst and director of broadband research for Parks Associates. "Broadband service providers are banking on an increasing number of these subscribers becoming frustrated with dialup service, which makes broadband seem more compelling. But if dialup customers remain pleased with the quality of Internet service at $15 to $25 per month, providers are going to have a tough time selling broadband at $45 to $50 per month."

Many broadband marketing campaigns are touting the ability of high-speed Internet access to view rich media content or make downloads quicker. But the main reason cited by narrowband users not intending to upgrade to broadband is that dialup is "good enough" for their Internet needs.

Satisfaction of dialup users
Very satisfied	29.1%
Moderately satisfied	19.0%
Somewhat satisfied	23.2%
Neutral	10.9%
Somewhat dissatisfied	8.4%
Moderately dissatisfied	3.9%
Not at all satisfied	3.7%
Source: Parks Associates

While it's possible that the dialup loyalists use the Internet sparingly, for e-mail and some Web surfing, they may need more exposure to broadband's benefits before they will consider switching. Once the switch to broadband is made, research has shown there is a noticeable difference in consumer Internet use.

Jupiter's study found broadband consumers use their connections more intensively than narrowband consumers. The most significant disparities occur in entertainment and financial services areas.

Jupiter found broadband users are more likely to:

• download music (46 percent of broadband users vs. 26 percent of dialup users)
• listen to music (48 percent vs. 30 percent) watch video (36 percent vs. 18 percent).
• conduct personal banking (48 percent vs. 30 percent) online
• conduct stock-related activities online (35 percent vs. 23 percent)

Although e-mail and surfing the Web remain the top two daily activities among both dialup and high-speed ISP subscribers, J.D. Power found that high-speed subscribers tend to spend more time online than their dialup counterparts. On average, dialup ISP respondents report personally spending about 13 hours per week online, with their households spending about 18 hours in aggregate. However, high-speed respondents report personally spending about 16 hours per week online, with others in their households spending about 23 hours per week online.

Among current dialup subscribers surveyed by J.D. Power, 10 percent said they are "extremely" or "very likely" to switch to a DSL and/or cable modem connection in the next six months.

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