Report: Broadband Subscriber Growth To Decline 12% In 2009

Prediction could change if new administration delivers on broadband promise
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Broadband subscriber growth will decline by 12% in 2009, predicts Pike & Fischer in a new broadband competition report, but cable will continue to get the lion's share of those new customers. But that prediction could change if the new administration delivers on its broadband promise.

Pike is basing its prediction of only 5.7 million new broadband households in 2009 based on a tanking economy. "Consumers will spend less on communications services as their job security becomes more tenuous and their discretionary income plummets," said the report.

But the equation changes if President-elect Barack Obama succeeds in making

broadband deployment subsidies and incentives part of his economic stimulus package, as he has promised to do.

"Government initiatives, such as tax incentives and loan guarantees to help expand broadband infrastructure into underserved areas, could enable service providers to bolster their customer counts," said Pike & Fischer broadband adviser Scott Sleek in announcing the new report. "In addition, policy-makers are likely to support training and education programs aimed at increasing customer adoption of broadband. These steps could offset what will be an inevitable slowdown in subscriber growth."

Pike & Fischer argue that cable's continued dominance of sign-ups is because, while telephone companies are offering new fiber-optic driven speeds that exceed cable, most of their service is still DSL, which is slower than cable.