Gartner Dataquest Survey Shows 61% of U.S. Households Actively Using the Internet.

Despite Internet service provider (ISP) and competitive local exchange carrier (CLEC) failures, U.S. consumer demand for Internet access continues to grow, according to survey results by Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).

A Gartner Dataquest survey from June 2001 found that 65 million U.S. households are actively using the Internet. There has been an increase of 8.4 million users since Gartner Dataquest's previous survey in November 2000. Sixty-one percent of U.S. households are actively online, and when they get online, they usually get hooked and continue to subscribe to the Internet. Ninety percent of online households said they were likely to continue their Internet subscription -- indicating that the Internet is becoming a staple in the household.

"While U.S. businesses and consumers have been cutting back and restructuring their debt to weather the economic slowdown, the U.S. consumer has not yet reduced their seemingly insatiable appetite for Internet access," said Amanda Sabia, industry analyst for Gartner Dataquest's worldwide Telecommunications and Networking group. "In fact, there is no indication that this demand will abate over the next 12 months. An even higher growth rate for broadband connectivity would be achievable if the regional Bell operating companies (RBOCs) were deploying DSL more aggressively."

High-speed Internet access achieved a penetration rate of just less than 25 percent of online households. Cable modem subscribers comprised more than 50 percent of all online high-speed households. Nearly 20 percent of dial-up households said they expect to subscribe to some form of high-speed connectivity by mid-2002.

"Cable providers are making a more concerted effort to sell cable modems, while the RBOCs, the main purveyors of DSL services, have not taken up the cable TV challenge in the residential market, focusing instead on the business segment," said Peggy Schoener, senior analyst for Gartner Dataquest's worldwide Telecommunications and Networking group. "Cable modem providers have also provided a better customer installation experience than DSL. The price of DSL has also been raised and the incumbent local exchange carriers (ILECs), specifically the RBOCs, have cut back their plans for more aggressive rollouts."

Additional information is available in the Gartner Dataquest Focus Report "What Economic Slowdown? U.S. Consumer Demand for Internet Access Breaks Records." This report examines how U.S. households are accessing the Internet today and in the future.

This research is published by Gartner Dataquest's worldwide Telecommunications and Networking group. This group provides analysis for the full spectrum of telecom and networking issues. To keep up to date on the latest telecommunications issues, please visit Gartner's Telecommunications Focus Area at http://www.gartner.com/1-researchanalysis/focus/telecom-fa.html. To subscribe to Gartner Dataquest programs, please call 800-419-DATA, or 408-468-8009. Reports can be purchase on the Internet at www.gartner.com.