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U.S. Market Broadband Growth is a Deja Vu

We're now seeing the proof -- once U.S. broadband access pricing declined to be in line with leading European and Asian countries, greater adoption by mainstream consumers followed. However, as new consumer six- and twelve-month promotional pricing expires it will be interesting to see the effect on account churn. Savvy consumers will call their provider at the end of the promotional period and ask for the "retention" department and have their discounted rate extended -- for the same period, or sometimes even longer.

Nielsen//NetRatings announced that nearly three-quarters of U.S. active Web users connected at home via broadband in May, growing 15 percentage points over a year ago, when just 57 percent of active Web users relied on broadband connections at home. Research also indicates that broadband users are more likely to make better use of the Internet's full capabilities.

�Although we are not seeing the explosive month-over-month growth we once were, the market for broadband Internet connection has not yet reached saturation,� said Jon Gibs, senior director of media, Nielsen//NetRatings. �We're past the point where decreasing prices and increasing availability will move the needle for providers; the remaining consumers will be pushed to broadband as the Internet continues to move beyond text-based information to a comprehensive source for video,� he continued.

The total number of home broadband users has grown 30 percent year over year, from 78.6 million in May 2005 to 102.5 million in May 2006, while the number of narrowband users has dropped 31 percent in the same time period, from 58.8 million to 40.3 million.

Compared to their narrowband-using counterparts, broadband users are over three times as likely to use RSS (Really Simple Syndication) as a delivery method for their preferred Internet content. They are also more than twice as likely to publish a blog, or build a personal Web page.

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