Report: DSL Poised To Gain Ground, Thanks To Yahoo!

Yahoo! could gain between 800,000 and 2 million new relationships with paying consumers as a result of its deal to offer broadband service for $14.95 a month with Verizon, according to Piper Jaffray Senior Research Analyst Safa Rashtchy.

Rashtchy, in a research note issued Wednesday, added that attaching Yahoo!'s name and services to broadband connections might make phone companies more competitive with cable providers. "Yahoo! as the partner of choice is becoming a strategic asset for Yahoo!, as companies like Verizon and SBC use Yahoo!'s brand and content to fend off competition from cable operators," he wrote.

Separately, another report issued yesterday--Pike & Fischer's "Competitive Analysis of DSL and Cable-Modem Markets"--also found that phone companies were becoming more competitive with cable for broadband services, even though cable modems still account for the majority of high-speed connections--21.8 million, compared to DSL's 14.7 million.

"DSL is proving to be a consistently viable challenger to cable in the high-speed Internet market," stated the report, which noted that this year, the cable industry's share of the broadband market dipped below 60 percent for the first time.