• by Jonathan Blum , September 30, 2008

"So now, less than five years later, you can go up on a steep hill in Las Vegas and look west," wrote Hunter S. Thompson, "And with the right kind of eyes you can almost see the high-water mark - that place where the wave finally broke and rolled back." Broadband seems to be cresting. The notion of the Internet as the ever-rising digital tide that is subsuming traditional media may finally be reaching its peak.

Two significant studies indicate that the medium is starting to feel the limits of its size and reach: Both broadband penetration and the average speed for that broadband penetration are beginning to level off.

The Pew Internet & American Life Project released a study earlier this summer indicating that the percentage of the population using broadband was flat: As of April 2008, 55 percent of Americans had broadband in their home, which was essentially unchanged from a December 2007 survey - and is sharply off from the yearly double-digit growth in broadband penetration dating back to 2001.

The reasons, according to John Horrigan, associate director at the Pew Internet Project who led the research effort, were a blend of income constraints for some Americans and a lack of tech savvy by others.

"When we drilled down we found two baskets of non-broadband users," Horrigan says. "Those who said broadband was too expensive and those who did not have the tech wherewithal to move to a new service."

And even the Pew study's bright spot for the Web - that existing broadband users have been willing to pay up for faster online access - was clouded by a second piece of research released by the Communications Workers of America that said average broadband speeds in the U.S. have stalled.

The second annual Speed Matters survey of both upload and download bit rates in 50 states found that mean broadband speeds remained basically unchanged from 2007 to 2008: 2.3 megabits per second for downloads and just 435 kilobits per second for uploads. Not only is that a fraction of the speed needed to fully deploy the new generation of broadband Web offerings marketers are currently investing in, it is far slower than the average speed for other countries worldwide. Japan, for example, offers an average of 62 megabits per second for downloads, according to the study.

While there's never been more broadband Web content available, the bottom line for advertisers is sobering: For the first time, it's not easier to access that content this year than it was last year. And that low growth for Web media is unlikely to change anytime soon.

"Though the Internet will always be an excellent primary-targeted medium," says Brian Wieser, senior vice president, director of industry analysis at magna Global, "It will probably always remain a secondary mass medium. There is just no way past the economics of service for the Web. A lot of people just don't have even the $10 a month for dial-up access, much less $40 for broadband."