Wave Issue 0413 /09/2004 Article 4-01

***In-Stat/MDR Reports that the U.S. Broadband Market Reaches
Critical Mass

Scottsdale, Arizona
April 6, 2004

With close to 27 million U.S. business and residential
subscribers at the end of 2003, broadband is now clearly a
mainstream service, reports In-Stat/MDR. The high-tech market
research firm projects that the mainstreaming of broadband will
be huge, as the existence of a significant subscriber base opens
up markets for other services that are looking to take advantage
of the broadband connection, such as home entertainment and
networking, Voice over IP (VoIP) and online gaming.

According to In-Stat/MDR, this starts a cycle where growth in
both broadband and applications feed the growth of each other.
This applies equally to the business subscriber. Broadband growth
should also improve service provider operations as well. However,
the one major challenge that faces the future provisioning of
broadband will come from a less tech-savvy subscriber.

In-Stat/MDR asserts that as broadband moves into mass adoption,
newer subscribers will be less experienced with computers and the
Internet. They will expect all of the benefits of the Internet,
but will have less patience for dealing with its technical
issues. When their service goes down they are going to be less
likely than early adopters to perform self-diagnosis, and more
likely to just pick up the phone and call customer service. Also,
their lower level of technical knowledge will make communicating
with them more difficult. However, the opportunities will
outweigh the challenges.

In-Stat/MDR also found that:

-- At the end of 2003, one in every five U.S. households
subscribed to a broadband service.

-- In the United States, cable modem continues to be the most
common broadband access technology, with DSL remaining in second.

-- Broadband over Power Line, after years of discussion, is
finally moving out of the lab and into actual homes.

-- Fiber-to-the-Home (FTTH) continues to be hindered by cost and
regulatory concerns.

-- Fixed Wireless Broadband (FWB) is now the third most common
broadband access technology in the United States.

-- While cable modem may be the broadband technology of choice in
the United States, worldwide, DSL dominates due to lack of cable
data service, and greater housing density outside of the United
States.

-- At the end of 2003, Comcast and Time Warner accounted for the
majority of all cable modem subscribers. Overall, six cable
operators had 91 percent of the U.S. cable modem market at end-
of-year 2003.

-- SBC and Verizon accounted for the majority of U.S. DSL
subscribers at the end of 2003. Overall, five providers accounted
for 94 percent of the U.S. DSL market.

The report, "Reaching Critical Mass: The US Broadband Market"
(#IN0401334TX), examines the market for both residential and
business broadband services. This report contains five-year
forecasts for the following broadband services -- cable modem,
DSL, fixed wireless broadband, fiber-to-the-home, satellite, and
broadband power line. Other forecasts in this report include
total U.S. residential and business broadband subscriber
forecasts. This report also provides broadband market share by
provider and technology. It is available at In-Stat/MDR.

www.instat.com/