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Home buyers may be swayed by slow Internet connection

Associated Press / November 6, 2008
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Adam and Anita Paulk had a nice home outside Temple, Texas, with a big yard and a 10-minute commute to his job. But in Internet terms, the house was on Slow Lane. There was no high-speed Internet connection available.

So the Paulks pulled up stakes in 2005 and built a home in a new subdivision. "It was worth it," said Anita Paulk, not to hear her husband complain about their Web connection anymore.

In less than a decade, broadband has gone from a luxury to a must for many people, and for some of them, it's started to influence their real estate decisions. Homes that have broadband are winning out over more remote ones that don't. Areas with better and faster broadband are becoming more desirable.

Edward Redpath, a real estate broker in Hanover, N.H., said he has seen deals fall through once the buyer realizes a home doesn't get broadband. "We have a lot of people that don't go into the rural neighborhoods or consider the rural neighborhoods because they need the broadband."

There are several intersecting trends at play. One is that our reliance on broadband is increasing. About 55 percent of Americans have broadband at home, according to a recent survey from the Pew Internet and American Life Project - although more people have service available to them and don't buy it.

But the spread of broadband is slowing down. Getting the last 10 percent or so of homes connected is an expensive proposition, because they're in small communities or far from other homes.

Wireless broadband coverage from cellular carriers is also expanding, but it still follows major roads and population centers. Even if you can get it, it's slower than wired broadband and there are monthly download limits.

As a last resort, satellite broadband is available nearly everywhere. But it has strict limits on how much data a subscriber can download, and some activities, like playing action games online, are impossible because the signal takes time to travel to space and back.

The uneven access to wired broadband has led to calls for involvement by the federal government, which so far has taken a hands-off approach. The chairman of the Federal Communications Commission, Kevin Martin, suggested using the Universal Service Fund, which subsidizes phone service in rural areas, to promote broadband coverage.

Even in built-up areas, broadband has become a factor for some people when they decide where to live, at least if they work from home.

In luxury apartments, the standard is now to have at least two choices for broadband, according to Henry Pye, the director of resident services and technology at JPI Partners LLC, which owns buildings across the country. It's his job to make sure they get broadband, because, he said, you can't rent apartments without broadband anymore.

Central Seattle is served by Qwest Communications Inc., which isn't drawing fiber all the way to homes like Verizon does. That points to a coming divide between places that can get broadband and those that can get "ultra broadband." Fiber-optic connections already outstrip DSL speeds, and could be upgraded to higher speeds.

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