Leonard Nimoy spent the early 80’s as the voice behind searches for the Loch Ness Monster and Bigfoot documentaries. Maybe he should be hired to track down equally elusive broadband users who aren’t upgrading from dial-up access, despite the industry’s best efforts to capture them.
by Jim Wagner
of internetnews.com
[June 28, 2002]
Even though industry experts don’t agree as to why mainstream American dial-up users are reluctant to embrace high-speed Internet service, they all have opinions on the subject. Maybe the industry needs to hire Leonard Nimoy to find out why, or at least go In Search Of the illusive broadband user.
Nimoy’s expertise in sorting out mysteries is sorely needed to determine the real reason why dial-up users aren’t ready or willing to migrate to broadband access.
While the number of digital subscriber line (DSL) and cable modem Internet users is on the rise, subscribers still only make up 10 percent of online America. The reasons behind hesitant broadband uptake in the U.S. comes down to two primary sticking points—content, and pricing or availability.
Discontent with content
Incumbent carriers around the country are signing deals with content providers in the hopes of spurring interest in broadband usage among mainstream America. These companies figure that a familiar and friendly Web site is what lure dial-up users to upgrade their online access program.
Both Verizon Communications and SBC Communications have hitched their stars to major Web portals. Last week, Verizon penned a deal with MSN to provide a co-branded DSL service dubbed “Verizon Online with MSN.” The deal extends broadband access to some 34 million homes across Verizon’s footprint. Back in April, SBC signed a more far-reaching agreement with Yahoo! to bring visitors to the popular Web portal’s into SBC’s broadband fold.
Both deals are a boon for the content providers involved—MSN has been looking for a DSL offering after its investment in NorthPoint Communications went south, and Yahoo! opened up a new revenue stream, since it gets a piece of the take for every new subscriber it brings to SBC.
Dr. Yardena Rand, Sage Research director, said a case can be made for content dictating broadband appeal.
“Dial up users really have to be convinced to pay more for their broadband connection, so it’s going to have to be content driven,” Rand said.
Dr. Rand added that it was smart for MSN to opt for partnering with an incumbent carrier, as opposed to striking a deal with struggling national DSL resellers like Covad Communications.
“It’s always easier to make a deal with someone who has a large footprint to get you wider coverage, but let’s be honest, it can be a bit risky,” Rand added.” I wouldn’t be surprised to see more of these deals in the future.”
So is content the only reason people haven’t been signing up by the thousands the past couple years? Is the inevitable crush of broadband sign ups imminent with must-see content as its lure?
Not so, according to InStat/MDR’s Daryl Schoolar, an Internet service provider (ISP) analyst at the high-tech research firm. According to Schoolar, one need only look at the former cable modem provider Excite@Home for the answer.
The popular cable modem service provider, in coalition with some of America’s largest cable networks, had millions of customers. When its financial problems came home to roost, the Excite portal was sold off and still made money.
“A good analogy is looking at Excite@Home and the breakup there and the service being broken up among the cable guys,” Schoolar said. “You still had growth, even without Excite—all Excite brought was the content—even without the content there cable modem service still continued to grow.”
Price appeal
With that being said, it appears that price and availability are key determinants for dial-up users to make the leap to broadband. This is the strategy that Covad is betting on to win new subscribers. Last week, Covad reduced its monthly asynchronous DSL (ADSL) fee to $39.95, on the heels of an ARS, Inc., research report that shows U.S. monthly DSL rates climbed to an average of $51.82 in March 2002.
Martha Sessums, Covad spokesperson, said content is well and good, and she wishes her competition the best of luck, but expects Covad’s DSL price drop will be more successful.
“A drop in pricing will spur demand and if others can spur it through content, then that’s fine,” Sessums said. “But content isn’t the issue, it’s pricing and availability.”
Not so fast
But the real issue of broadband adoption and migration isn’t strictly in better pricing or better content, says Ken Zita, president of Network Dynamics Associates, LLC, and a member of the Pacific Telecommunications Council board of trustees. It’s a little of both.
Zita believes the media and Wall Street hype surrounding the advent of broadband Internet gave consumers “impossible expectations” of its benefits. The reality, he said, is that many still consider broadband a luxury item and not a necessity.
That will change and a revolution will come, Zita said, when business and residential use becomes more ubiquitous.
Operational support systems and middleware—the humdrum back-office technology that makes complexity simple—will prove to be the engine for generating and managing new broadband services,” Zita said. “The need for these services will be determined by actual changes in how we live and think and not by myths fabricated for the market.”
Driving the back-office technology to the home will be the rising number of telecommuters who want Intranet-like speeds while at home, regardless of the price. It’s part of the “incremental revolution that will be,” Zita said.
“Even those in corporate jobs are establishing more balanced lives by linking into company resources from home,” Zita said. “Broadband access makes the process more effective and, in some sense, more satisfying.”
If Zita’s right, we might not need Nimoy after all—just a little patience to allow the broadband market to grow at a reasonable rate.
Kaynak : 