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U.S. Broadband and the Home of Tomorrow

Consumer Electronics Association (CEA) President and CEO Gary Shapiro announced that 43 million U.S. households now have broadband Internet access compared to just two million in 1999, according to the results of a new CEA research study on broadband access in America. Shapiro introduced the findings during his opening keynote at the Electronic House Expo (EHX), which runs through April 1, 2006 in Orlando, Florida.

"Broadband households are quickly becoming the norm. It is very possible that dial-up Internet connections will be a thing of the past by the end of the decade," Shapiro said. "High-speed Internet services have ushered in many new applications, devices and services that consumers are demanding. CEA research shows a bright future for custom retailers and installation professionals, because not all consumers are technically savvy enough, or want to spend the time to set up all the devices and applications they wish to use."

According to the CEA study, Broadband and the Home of Tomorrow, 33 percent of non-owning high-definition television (HDTV) households are interested in having a professional install an HDTV in the next two years. This translates into 20.5 million households. Large numbers of households are also interested in having digital video recorders (DVR) and distributed audio systems installed.

While broadband adoption is quickly on the rise, the U.S. ranks 15th in the world in high-speed Internet penetration. Asian countries top the list, with South Korea, Hong Kong, Singapore and Taiwan all having higher than 50 percent penetration, and Japan coming close to the half-way mark with 49 percent. Many Northern and Western European countries also outpace the U.S. in broadband adoption, including the Netherlands, France, Denmark and Sweden. In addition, Canada has broadband penetration that is higher the U.S.

The CEA study found that dial-up Internet access is on a notable decline in the U.S. In 2000, dial-up Internet connections accounted for 74 percent of all U.S. residential Internet connections. This figure dropped to 60 percent by 2003, and currently stands at 36 percent. Additionally, the new research shows that cable Internet access has lost ground when it comes to customer value and popularity. In October 2000, cable broadband accounted for 15 percent of all Internet connections, compared to four percent for digital subscriber line (DSL). By March 2006, cable and DSL were head to head, each with 29 percent of the residential Internet market.

"Consumers desire even more choice when it comes to broadband. Currently, only 15 percent of online U.S adults are very satisfied with their current number of ISP choices. It boils down to choice and the value equation. Yes, speed and reliability are important, but the cost must be factored in, and when it comes to cable, consumers increasingly are missing the value," said Shapiro.

According to the study, service satisfaction is highest among DSL subscribers, followed by cable Internet subscribers and is lowest among dial-up users. But price satisfaction shows an inverse relationship, while dial-up customers are the most pleased with the cost of their service (53 percent), they are the least pleased with the speed (26 percent). On the other hand, cable Internet subscribers are the least happy with cost (26 percent) and are the most happy with speed (76 percent). Falling in between are DSL customers, 46 percent of whom are happy with the cost and 69 percent of whom are happy with speed.

Because of this, only 46 percent of consumers are likely to recommend cable Internet to friends or family where as 61 percent of DSL subscribers would spread the word. While consumers like cable's speed, the value for consumers is just not there.

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