Study: Cable-Modem Fees Accelerated

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High-speed cable-modem fees accelerated in the first quarter even as
competing asymmetric-digital-subscriber-line rates remained flat, according to a
new study put out by ARS Inc.

The marketing firm's study of broadband rates for the first quarter showed
that cable broadband rates rose 4 percent, from an average $43.21 monthly in
December to $44.95 in March. DSL rates, meanwhile, increased 1.4 percent during
the same time period, from an average $51.09 in December to $51.83 in March.

The study also noted that cable providers control about 62 percent of the
consumer broadband market.

'[A total of] 91 percent of all broadband-service providers that have been in
business since the beginning of 2001 have raised their rates since that time,
indicating that industry consolidation that ripped through the broadband market
last year has left broadband consumers with fewer choices and, ultimately,
higher monthly prices,' said Mark Kersey, broadband- and cable-industry analyst
at ARS.

'We expect that this trend of increasing prices will hamper 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.

At the same time, however, promotional offers increased. About 81 percent of
providers offered free or discounted installations in the first quarter,
compared with 77 percent in the final months of 2001.

Providers offering free or discounted DSL or cable modems rose from 53
percent in the fourth quarter of 2001 to 65 percent in the first quarter of
2002, and 58 percent offered new customers rebates on monthly
fees.

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