Two out of five U.S. internet users have broadband

NEW YORK (AP) -- Two in five Internet users in the United States now have high-speed access at home as telephone companies slash prices to better compete with cable broadband services, a study says.

In a report Sunday, the Pew Internet and American Life Project placed the adult residential broadband population at 48 million, or one-quarter of all adult Americans.

Among college-educated adults age 35 and younger, penetration has reached 52 percent.

Most of the growth has been since November from connections over souped-up phone lines called DSL, which now make up 42 percent of the home broadband market, up from 28 percent in March 2003. Cable modems still have the lead, with a market share of 54 percent, but they no longer enjoy a 2-to-1 edge.

The increase counters Pew's findings from last spring suggesting that the broadband market had begun to stabilize. That study found fewer Internet veterans wishing to upgrade their dial-up lines.

But broadband fees have dropped since then, with DSL available in some markets late last year for just a few dollars more than dial-up.

Although only 3 percent of home broadband users cited affordable pricing as the reason for switching, price has an indirect effect.

"People don't buy it because the price is too high, but when the price is lower and closer to dial-up, you have more people convert over" even if they cite other reasons for switching, said Dave Burstein, editor of the online newsletter DSL Prime.

Major dial-up services typically cost $22 to $24 a month. SBC Communications Inc. dropped DSL service to as low as $27 and Verizon Communications Inc. to $35, Burstein said.

The report stated that in rural areas of America only 10% of households have broadband internet service.