DSL ISSUES A WAKE-UP CALL TO CABLE

DSL carriers gave cable providers something to think about last quarter, boasting 10% growth in a sector that everyone — including telcos — expected to remain stagnant this year.

The total number of DSL subscribers in the U.S. reached 5.83 million at the end of September as DSL carriers added 580,000 new customers in the third quarter, according to new data from the DSL Forum. The National Cable Telecommunications Association has not released official numbers yet, but in October the lobbying group estimated cable broadband subscribers topped 10 million in the same period — a growth rate of 9% in the same three months.

Some of DSL's gain can be attributed to increased marketing over the summer with both SBC Communications and BellSouth launching major broadband campaigns. SBC alone accounted for 44% of the DSL's growth spurt, adding 257,000 customers to its new SBC-Yahoo high-speed service. And despite the well-documented death of CLECs, competitive carriers are still holding their own in the DSL market with a 20% share, said DSL Forum Chairman Bill Rodey.

“CLECs still have the install base for business customers,” Rodey said. “The rumor of their death was premature. At most they've only lost one or two percentage points in the last two years.”

Though DSL made gains in the third quarter, it's still far off pace if it wants to claim victory for the year. Since the beginning of 2002, cable has grown its subscriber base by more than 40%, while DSL carriers have seen only 25% growth.

“In the U.S., cable continues to kick DSL's butt,” Rodey admits. “But the gap between cable and DSL could be settled very easily if we could get a level regulatory playing field.”