Comcast could take broadband crown

Comcast is poised to dethrone AT&T as the largest broadband provider in the U.S. by the end of this year.

“At the current rate of net additions … it appears highly likely,” said Teresa Mastrangelo, principal analyst for broadbandtrends.com.

Comcast was the U.S. broadband leader until the first quarter of 2007, when it was beaten by a newly merged AT&T and BellSouth. However, the cable giant was only about 100,000 subscribers behind its rival in the third quarter, when it added more new broadband customers than AT&T and Verizon combined.

The trend evokes a popular criticism of Bell broadband providers: that their focus on fiber rollouts has slowed their broadband market penetration, allowing cable rivals to move more quickly, though with a product that may become more vulnerable to fiber over time.

“I don't think AT&T has followed the same pattern as Verizon, in that it has chosen not to focus on its DSL base, but I do believe they have been distracted,” Mastrangelo said.

Access line loss in general has been eating away at AT&T's broadband base, she said, without a sufficiently strong response.

“It was only recently — I think in Q2 '08 — that they finally began offering naked DSL to try and win back customers that were substituting mobile, but it is unclear how successful this program has been, plus they don't really seem to market this product,” Mastrangelo said. “Second, until this past month, they had really slowed their promotional activity. Even so, most of the current promotional activity is tied to U-verse TV. Third, they are not offering any compelling speed options. While I don't believe that the average consumer really understands speed, they do know that 10 Mb/s is faster than 3 Mb/s, and cable appears to be taking advantage of this fact.”