Comcast Faces Sanctions But Still Gains Subscribers

Comcast gained 278,000 new broadband customers last quarter, with more than two-thirds migrating from DSL service, the company said today.

The report comes on the heels of reports that Verizon lost 100,000 DSL subscribers (though many of those replaced their DSL service with Verizon's FIOS) and that AT&T added only 46,000 new DSL customers.

So, even though DSL connections aren't as appealing as they once were, the good news is that broadband use is still growing. But the bad news is that demand is outpacing capacity, especially as more and more people turn to the Web for bandwidth-intensive video.

In fact, it's questionable how many of those new Comcast subscribers will be any happier with their broadband service than they were when they used DSL connections. DSL and cable modems are both considered broadband, but cable modems -- at least theoretically -- sometimes have higher top speeds than DSL lines.

In reality, cable providers aren't able to offer as much bandwidth as people currently want. Comcast has already admitted it slowed peer-to-peer traffic to manage congestion on its network -- actions that spurred net neutrality groups to complain to the FCC that Comcast violated net neutrality principles. The FCC is expected to officially rule against the cable company on Friday.

Comcast's peer-to-peer throttling might be the most high-profile example of the consequences of network congestion, but it's not the only one. A recent study by the Max Planck Institute for Software Systems in Germany showed that Cox also was blocking users from file-sharing sites.

At the same time, demand for bandwidth is only going to grow in the future. A new Integrated Media Measurement Inc. study shows that more than 20% of viewers now watch prime-time television online, up from 6% last fall.

While Comcast should be glad that people are signing up for its Internet service, the company, like other service providers, still must figure out how to make sure those subscribers can use the bandwidth they're paying for.

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