US suffers broadband inflation

The cost of broadband is rising in the US and could dampen demand for high-speed Internet access.

The warning comes from California-based ARS after it reported that charges for cable modem and ADSL services had risen on average in the first three months of the year.

Cable broadband Internet service prices rose 4 per cent in Q1 2002, from an average of $43.21 a month in December 2001 to $44.95 a month in March 2002.

The monthly price of bog standard ADSL increased 1.4 percent over the same time period, from an average of $51.09 in December 2001 to an average of $51.82 in March 2002.

According to Mark Kersey, an analyst at ARS: "We expect that this trend of increasing prices will hamper the widespread adoption of broadband services and that the vast majority of users will continue to access the Internet via dial-up connections for the foreseeable future."

However, as prices have risen, so too have the number of promo offers designed to tempt people to sign on the dotted line.

ARS found that 81 per cent of providers offered free or discounted installation, up from 77 per cent in Q4 2001.

And some 65 percent of providers offered free or discounted cable or DSL modems in the Q1, up from 53 percent. ®