Broadband growth plummets in 2Q, cable stronger

The number of new broadband Internet subscribers in the United States fell in the second quarter to the lowest level in at least seven years. The 20 largest cable and telephone companies added a net 887,000 high-speed Internet subscribers in the three months ending June 30. The number of new customers is half that of the second quarter of 2007. Saturation of the marketplace, along with the slowing economy, are likely reasons for the slowdown. Leichtman Research believes the decline in new customers was likely exacerbated by decisions at the two largest phone companies, AT&T and Verizon, to emphasize faster, more expensive services over entry-level DSL. Cable companies did much better than phone companies in the quarter. While the two industries have usually divided new broadband customers evenly between them, 76 percent of the new business went to cable companies in the quarter.