Survey: In Tough Times, Internet Still Seen As Necessity

Should economic woes lead people to cut back on spending, consumers are more likely to cancel their cable subscriptions or landlines than their Internet or wireless plans. That's according to a new report by the Toronto-based Solutions Research Group.

"The most resilient to a downturn will be expenditures on home Internet connections, followed by wireless," states the report, based on an October survey of around 800 North Americans. "Many consumers, with minor exceptions, view these as essential utilities like water and electricity."

The report ranks 10 ways that people are likely to cut back on entertainment bills. Not attending big-ticket concerts or sports events was at the top of the list, while cutting back on cable was No. 5. Shedding Internet subscriptions took last place.

Those findings shouldn't be a surprise, given that the explosion of online video has, in some ways, made cable TV redundant. Why pay for MTV or Showtime when "The Hills" and "Dexter" are available online?



Of course, not everything is online yet, which is one reason why the cable companies are still in business. Another is that streaming video sometimes still has delivery glitches.

Those glitches will probably be worked out over time, and more content will undoubtedly come online soon. Still, a bigger long-term threat to the Web will be bandwidth caps or traffic slowdowns, which could discourage people from downloading or streaming video. This prospect seems especially likely when the same cable companies that stand to lose subscription revenue also deliver broadband services.

At the same time, broadband might soon become more available, thanks to some potential upcoming policy changes. Among other new developments, the FCC appears to be backing a plan to allow use of "white space," or the airwaves not used by TV broadcasters, for wireless broadband. Should that proposal go forward, cable operators could have an even harder time convincing people to keep up their subscriptions.

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