Broadband Growth Is Brisk

With so much riding on DSL, does this mean incumbents aren't likely to get as excited about FTTP?

December 1, 2003

4 Min Read
Broadband Growth Is Brisk

New data shows that recession or no, broadband is as popular as ever.

More people signed up for broadband services during the third quarter than any previous quarter, according to analysts John Hodulik and Aryeh Bourkoff at UBS Investment Research.

About 796,000 new DSL subscribers and about 1.1 million cable modem users signed on during the third quarter, states the report, which cites figures from the nation's 16 largest broadband providers.

More than half of U.S. households have Internet access and, with some 20.7 million high-speed data subscribers in the U.S. now, the UBS analysts reckon that 18.7 percent of all U.S. households have a broadband connection of some sort.

SBC Communications Inc. (NYSE: SBC) has the highest percentage of data subscribers among the large incumbent telecom carriers. Nearly 13 percent of SBC's primary residential lines are also delivering DSL service.

SBC stands out because it saw its seventh quarter of consecutive growth in broadband subscribers. The company added 365,000 DSL subscribers during the third quarter, giving it 3.1 million subscribers in all.

These healthy growth numbers may raise new questions about DSL services, and how they relate to fiber to the premises (FTTP). SBC, in fact, shows how RBOCs can find themselves in a quandary regarding triple-play services and FTTP.

FTTP is enticing for high-bandwidth applications (see IDC Sees Modest FTTP Growth). But with advances in video and data compression -- and more mature DSL technologies -- the life of installed copper plants is being extended.

Table 1: Selected Broadband Service Standards

Type of Service

Maximum Downstream Capacity

Maximum Upstream Capacity

Maximum Distance


1.5 Mbit/s to 6.1 Mbit/s

16 kbit/s to 832 kbit/s

9,000 to 18,000 feet


Up to 25 Mbit/s

1 Mbit/s

6,000 to 16,000 feet


106 Mbit/s

43 Mbit/s

Up to 13,000 feet (4 km)

PON (FSAN standard)

622 Mbit/s shared up to 32 ways (about 20 Mbit/s per user)

155 Mbit/s to 622 Mbit/s

20 km


1 to 3 Mbit/s

125 kbit/s to 512 kbit/s

Depends on how many users are sharing the network

As the most recent Light Reading Insider, "FTTP Reality Check," points out, this is likely to make RBOCs less enthusiastic about FTTP plans, especially when they have already spent substantial amounts of cash on DSL equipment, support, and marketing. If DSL is just coming into its own, won't they want to make some money on it before moving to the next thing?

Like its peers, SBC has spent loads of money building out its DSL capabilities and, given DSL's growth, it tough for those carriers to pursue FTTP buildouts with much enthusiasm, despite the blessings of the FCC (see DSL Fuels Second Thoughts on FTTP). "We don't think it's economically feasible to deploy FTTP on a large scale," says SBC spokesman Michael Coe.

Not only is DSL more feasible to the big carriers, it helps them hold onto their eroding base of traditional telephone subscribers. Coe says that once a customer starts using SBC's DSL service, that customer is far less likely to buy their phone services elsewhere.

Meanwhile, as the incumbents wrestle with how to push forward with DSL without discarding FTTP entirely, the cable companies are still turning up subscribers faster than the phone companies.

Overall, cable remains the dominant broadband access media; about 1.4 cable modems were installed for every new DSL subscriber, according to the UBS analysts' report. The four Tier 1 cable operators -- Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable, Cox Communications Inc. (NYSE: COX), and Cablevision Systems Corp. (NYSE: CVC) – which all have between 22 percent and 33 percent of their basic cable customers subscribing to broadband data service.

— Phil Harvey, Senior Editor, Light Reading

For more on this topic, see the latest Light Reading Insider report: FTTP Reality Check. Annual single-user subscriptions to Light Reading Insider – which include access to the current report, the complete archives, and each of the monthly reports issued over the next 12 months – are available for $1,250.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like