"This starts a cycle where growth in both broadband and applications feed the growth of each other," said Daryl Schoolar, a senior analyst with In-Stat/MDR. "This applies equally to the business subscriber. Broadband growth should also improve service provider operations as well." However, one major challenge facing the future provisioning of broadband will come from the less tech-savvy subscribers. "As broadband moves into mass adoption, newer subscribers will be less experienced with computers and the Internet," said Schoolar. "They will expect all of the benefits of the Internet, but will have less patience for dealing with its technical issues."

Schoolar explained that when their service goes down, such users are less likely to perform self-diagnosis than early adopters, and are 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," he added.

In-Stat/MDR also found that:

• At the end of 2003, one in five US households subscribed to a broadband service.

• In the US, cable modem continues to be the most common broadband access technology, with DSL remaining second.

• Broadband-over-power line, after years of discussion, is finally moving out of the lab and into homes.

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

• Fixed wireless broadband is now the third most common broadband access technology in the US.

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

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

• SBC and Verizon accounted for the majority of US DSL subscribers at the end of 2003. Overall, five providers accounted for 94% of the US DSL market.

The report examines the market for both residential and business broadband services, including five-year forecasts for cable modem, DSL, fixed wireless broadband, FTTH, satellite and broadband-over-power line. It also provides broadband market share by provider and technology, as well as total US residential and business broadband subscriber forecasts.

Reaching Critical Mass: The US Broadband Market is priced at $2995. For

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