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The Honolulu Advertiser
Posted on: Tuesday, March 14, 2006

Honolulu 3rd in high-speed Net access

By Sean Hao
Advertiser Staff Writer

Note: The totals exceed 100 percent because those surveyed could connect to the Internet in more than one way.
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Honolulu Internet users stay online longer and spend more money than the rest of the nation. That helps make the city one of the top three U.S. markets for pricier high-speed, or broadband, Internet connections, according to a survey of 1,310 homes conducted by New York-based Scarborough Research.

The research firm found that 63 percent of Honolulu Internet users have broadband connections, which was tied with the San Francisco-Oakland-San Jose, Calif., area for third among 74 communities surveyed. San Diego and Las Vegas lead the list. The survey has a margin of error of about 3 percentage points.

The dominant type of broadband connection in Honolulu remained cable, with 37 percent of respondents or an estimated 220,000 adults accessing the Internet via a cable connection over a 30-day period. That was up from 34 percent on a similar survey released by Scarborough, a consumer research firm, in January 2005.

Among those high-speed users is Al Streck Sr., a retiree in Foster Village who subscribes to Time Warner Oceanic Cable's RoadRunner service.

"So far, so good and they've been really responsive to my concerns," said Streck, who uses the Internet to read the news and to send e-mail.

Hawai'i's geographic isolation likely plays a role in the adoption of the technology, which makes it easier to surf the Internet.

"I am surprised (Hawai'i ranks so high), but when you think about it I'm not surprised what with the speed and easy access" to the Mainland e-mail provides compared with regular mail, Streck said.

While cable remains the more popular service, digital subscriber line, or DSL, usage has increased at a faster rate. Twenty-six percent of those surveyed reported accessing the Internet via DSL, which was up from 21 percent on the prior year's survey. That equates to about 154,000 people.

DSL is carried over a telephone line.

Slower dial-up connections typically are the cheapest way to access the Internet followed by DSL. Hawaiian Telcom's regular rate for DSL is $34.95 a month, or about $10 less than the regular rate for Oceanic's RoadRunner service.

Oceanic got a jump on the market by being the first company to offer high-speed Internet service in late 1998.

"We are really a leader for the company and high-speed Internet started here for the most part," said Alan Pollock, vice president of marketing for Oceanic.

DSL service is limited to homes within a certain distance from a telephone switching station. In addition, the rollout of DSL was hampered early on by service quality issues.

Hawaiian Telcom spokeswoman Ann Nishida said the 26 percent market share figure for DSL seems accurate for Honolulu.

"DSL is growing faster in Hawai'i and will continue to grow as Hawaiian Telcom maintains focus on this service and expands offerings with DSL as the platform for additional enhanced services," she said.

Hawaiian Telcom plans to start offering TV services via DSL connections this year.

"Already we've seen strong DSL growth over the last 10 months with our very competitive offering at a lower price," Nishida said.

Gary Meo vice president of print and Internet services for Scarborough, said cities that rank high in broadband subscribers tend to have a large military presence, significant high-tech sector or have relatively young populations.

"In Honolulu the Internet has become a mainstream thing," he said. "You're kind of an Internet savvy market. People use the Internet more significantly more and they spend more money significantly more money online."

According to Scarborough 8 percent of Honolulu's Internet users spent $2,500 or more online in the past year, compared with a national average of 7 percent.

Fifteen percent of local Internet users spent between $1,000 and $2,499 a year, versus 12 percent nationally.

Reach Sean Hao at shao@honoluluadvertiser.com.

Correction: Fifteen percent of local Internet users spend between $1,000 and $2,499 online per year. A previous version of this story contained incorrect information. Also, the graphic should have noted that the totals exceeded 100 percent because those surveyed could connect in more than one way.