With consumers demanding high-speed Internet services to replace their clunky dial-up modems, the telcos and cable companies began offering triple-play services that wrapped voice, Internet and television services into one single-bill package. The cable companies’ weapon of choice was the cable modem, which is designed to take advantage of unused bandwidth over cable television infrastructure. The telcos, meanwhile, hitched their wagons to DSL, which provides Internet connection through local telephone networks.

Service-wise, the battle between cable and DSL was something of a draw. Despite the fact that cable Ethernet cards limited download speed to 4Mbps, cable modems were fairly comparable in price to DSL services, and cable Internet was much more widely available than DSL in the early part of the decade.

As competition between the two services has intensified, global prices for broadband Internet have dropped. The first half of 2004, for instance, saw the price of cable fall by 16%, while DSL fell by 13% over the same period.

Getting a head start in offering broadband was crucial to cable securing an early advantage over DSL, and by 2004, a U.S. Telecom Association report showed that 64% of all American broadband Internet subscribers, while DSL accounted for only 26% of subscribers. By the end of 2006, though, DSL had substantially closed the gap, accounting for 44% of America’s 51 million broadband subscribers, compared with 56% for cable. Thus, while cable continues to be the No. 1 broadband service in the United States, DSL has made rapid gains, and could be poised to overtake cable in the next couple of years. One potential challenger to DSL and cable has emerged in the triple play market in the form of Verizon’s FiOS. But while FiOS gets a considerable amount of hype, the service is still not widely available, and it only reached its one-millionth subscriber in June of this year.

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