Jupiter Bullish on Cable Modems

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In its first broadband report since the Sept. 11 terrorist attacks, Jupiter
Media Metrix estimated that broadband Internet penetration will reach 41 percent
of online households by 2006, or 35.1 million homes, led by cable modems.

Jupiter believes increased marketing by cable and digital-subscriber-line
providers will bolster penetration rates, but it declined to release specific
household projects for each service.

'Web sites and activities that are popular with the broadband audience
indicate that broadband users are becoming increasingly mainstream,' Jupiter
analyst Joe Laszlo said in disclosing Jupiter's research.

'Marketing strategies built around this audience should still target the
young, Internet-savvy and entertainment-oriented audience, but they should also
embrace segments like middle-class or upper-middle-class families that currently
use the Internet and individuals that actively manage their finances, such as
frequent stock traders,' he added.

Jupiter found that behind Road Runner, the most popular sites accessed via
broadband connections were citibank.com and gamingclub.com. Overall,
financial and gaming sites are popular among broadband users, Jupiter found.

Elsewhere, ARS Inc., a research firm based in La Jolla, Calif., found that
the price of DSL and cable-modem service rose 10 percent and 11 percent,
respectively, from January through October 2001.

The average DSL price for monthly service rose from $47.18 to $51.68, while
cable-modem prices rose from $40.07 to $44.17 during that time. ARS said 76
percent of the broadband-service providers it surveyed raised rates at some
point in 2001.

The consolidation in the DSL space 'has left broadband consumers with fewer
choices and, ultimately, higher monthly prices,' said Mark Kersey, an analyst
with ARS, in a prepared statement. And that left him bearish on broadband, in
general.

'We expect that this trend of increasing prices will only slow the widespread
adoption of broadband services, and that the vast majority of users will
continue to access the Internet via dial-up connections for the foreseeable
future,' he added.

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