Ceilidh

Michael Zey
futurist3000@aol.com

By Akweli Parker
Inquirer Staff Writer

Dial-up Internet service may not have gone the way of the oil lamp yet, but it's getting there: About one out of three homes on the Internet today uses a high-speed, or broadband, connection.

For Julie Liedman, who runs a free-lance writing and publishing business from her Queen Village home, a high-speed Internet connection has become indispensable.

"When I did have a phone connection a few years ago, it was virtually impossible, a nightmare," she said. Her dial-up connections would routinely fail as she was transmitting important documents to printers and clients.

When she got a high-speed DSL (digital subscriber line) connection from Verizon Communications Inc. three years ago, "it made such a difference," she said. Swapping huge files was no longer a nail-biting experience.

It made a difference in Liedman's personal life as well.

"I play bridge online, and know that I couldn't do that on my dial-up," she said. "If I got disconnected when I had a slam hand, that would be worse than not being able to send something to the printer."

To the casual Internet user, broadband still may not seem worth the added expense. Philadelphia-based cable giant Comcast Corp., the nation's largest provider of broadband Internet connections, charges $42.95 a month to customers who also get its cable-TV service - nearly double the $23.90 charged by America Online for its dial-up service, and quadruple the $10 or so charged by discount dial-up services. For Comcast customers who do not get its cable-TV service, the Internet connection costs $57.95 a month.

Yet broadband's growth among home users has been impressive. Internet measurement firm Nielsen/NetRatings Inc. estimated that as of May, 36 percent of U.S. home users were connecting over broadband lines - a total of 39 million users, nearly a 50 percent increase from a year earlier.

The Pew Internet and American Life Project put the number of home broadband users somewhat lower, at 30 million, in March, also a 50 percent rise from a year earlier.

Most of the growth has come at the expense of dial-up providers; according to Nielsen/NetRatings, the number of dial-up users in the United States fell from 79.4 million in May 2002 to 69.6 million a year later.

Today, seven years after broadband began working its way gradually into the mainstream, politicians and economists see it as the engine that could possibly power the next economic boom.

Wider consumer adoption of broadband is "definitely a net positive" for the national economy, said James Glen, a senior economist at the research firm Economy.com Inc. in West Chester.

"It will improve people's productivity, it will probably drive more online commerce, and companies will spend more on the [high-speed] infrastructure," Glen said.

Broadband's allure is obvious to frequent Internet users. Over a broadband line, Web pages appear many times faster than they would over a dial-up line. Files download in seconds or minutes instead of hours, and "streamed" music and video from the Internet can turn a broadband-connected computer into a home entertainment system.

"Once people have tried broadband, they'll never go back. They can never go back," said Michael G. Zey, a management professor at Montclair State University in Upper Montclair, N.J., and author of The Future Factor. "Once they experience it, they find 56K [dial-up modems] not only different, but also unbearable."

The widening mainstream acceptance of broadband has made it a critical new revenue stream for the cable industry, which has little room left to expand its traditional cable-TV-subscription business. The Baby Bell phone companies, too, see broadband as a growth industry.

Comcast has more than four million high-speed Internet users, a number it expects to grow to five million by year's end, even though DSL providers have begun offering substantially lower prices for Internet connections that are much faster than dial-up, if often slower than cable. Verizon charges $34.95 a month for its DSL service.

"We obviously take any competition seriously," said Steve Burke, president of Comcast's cable division, adding that the lower DSL pricing has not slowed the growth of Comcast's cable-modem service.

To keep ahead, Comcast plans to double the speed limit on its service, from 1.5 megabits per second for downloads to 3 megabits per second by the end of the year.

"We don't think that's something the [Bells] can offer in very many places," Burke said.

Comcast spokeswoman Sarah Eder said tests in Knoxville, Tenn.; Atlanta; and Pittsburgh this year were well-received by customers. She did not say when the faster speeds would be offered in other cities, or whether they would cost more.

The cable industry so far is in front of the phone companies in delivering fast Internet connections.

Pew's March report said 67 percent of residential fast-Internet users connected by cable modem, compared with 28 percent via DSL. The remaining 5 percent used services such as satellite and fixed wireless.

One obstacle to the spread of broadband has been that it is simply not available in some places: Many rural areas do not have cable for television and are too far from the phone companies' special Internet equipment. Cable companies and phone companies have to perform costly upgrades to their systems or add equipment to bring the service to their customers.

Verizon is aiming to have DSL available to 80 percent of its lines by the end of the year. It is at 70 percent now, said Bobbi Henson, spokeswoman for Verizon DSL.

"If you called us before and could not get it," she said, "try again."

Congress and state governments are working to encourage Internet access, and broadband in particular. Earlier this month, the U.S. House passed a bill permanently extending a moratorium on state taxation of Internet service, and the Senate is expected to consider a similar proposal next month.

Last week, Dennis Yablonsky, secretary of Pennsylvania's Department of Community and Economic Development, praised a Schuylkill County program that uses state grant money to help businesses and schools add broadband Internet connections.

In Pennsylvania at least, phone companies may have no choice but to bring broadband to the hinterlands.

State legislators are freshening up a 10-year-old law requiring them to string the whole state with high-speed lines by 2015. The law was created with a 2003 expiration date so legislators could modify it if warranted by technical or political changes.

Verizon and its competitors have allied with different state legislators on competing replacement bills: Verizon says FCC broadband statistics show the technology needs no political meddling, while opponents say that is all the more reason to strengthen, not water down, the existing rules.

"When a monopoly goes and puts together some legislation, it's generally not done with a master's degree in competition," said Scott Dulin, vice president of Bala Cynwyd-based telecommunications firm ATX Communications Inc.

The Baby Bells also complain that they have been unfairly saddled with federal rules requiring them to share their Internet networks with competitors. Cable firms have no such requirements to share their wiring.

Consumer advocates say the government should force the owners of both technologies to open their lines to competitors. The FCC compromised on the matter in February, saying that phone companies had to let competitors lease their existing equipment but could keep newly built facilities, such as fiber-optic networks, to themselves.

"We believe it is unclear on critical issues... and it does not provide the certainty we expected and that we need," Verizon's Henson said.

Verizon recently bankrolled a study by Criterion Economics L.L.C. on broadband's economic impact. That report said that as many as 1.2 million new jobs could result in the next decade from widespread adoption of broadband.

Glen, of Economy.com, said any attempt to quantify the potential impact of broader broadband adoption would amount to little more than guesswork, and he
cautioned that the spread of high-speed connections was not likely to lead to anything like the Internet and telecommunications boom of the late 1990s.

"It won't be revolutionary," he said. "It will be significant."


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Contact staff writer Akweli Parker at 215-854-5986 or aparker@phillynews.com.