Millions Still Use Dial-Up Web Connections

NEW YORK ( TheStreet) -- In a world of always-on, fast Internet connections, it's difficult to believe that there are still a surprising number of Americans who use a dial-up connection to surf the Web.

According to Pew Research, in 2012, 65% of Americans had broadband connections in their homes, while 3% had dial-up connections. In 2000, those numbers were reversed -- 65% connected via dial-up while only 3% had broadband connections.

Although it is only a small percentage of overall users, 3% translates into a substantial number unwilling or unable to access higher-speed Web offerings such as fast downloads or streaming music files and videos.

There are still a handful of familiar names offering dial-up service including AOL ( AOL), AT&T ( T), EarthLink ( ELNK) and United Online ( UNTD) (brands include Juno, NetZero and Kmart's BlueLight). Although user statistics have remained constant over the past two years, AOL has been raising some prices for its estimated 3 million dial-up customers to cover increased costs of keeping the service up and running.

AOL shares were gaining 0.86% to $34.10 on Thursday in New York.

Pew reports that price seems to be the main reason people stick with dial-up service. Although unlimited dial-in is listed as free, AOL offers three tiers of service ranging from $10-$26 per month. That's in addition to what the local telephone company charges each time a connection is dialed-up as well as how long that connection lasts.

There were no statistically notable differences tied to community-type meaning rural, city and and suburban dwellers are equally likely to use a dial-up connection at home. Hispanics, at 5%, are the most likely ethnic group to dial-in compared with 3% of white and 1% of black users.

Other potential customers complain they can't get a broadband connection where they live. Local phone and service providers say they live too far away to be wired for a DSL, cable or fiber-optic connection. For friends who live a few miles outside of Dayton, Ohio, the only option available is an Internet connection via satellite which is affected by the weather and ultimately very slow and very expensive.

A few years ago, Pew asked dial-up users what it would take to get them to switch to a faster home connection. About 35% said lower prices would work, 17% said they would sign-up if it were offered where they live but 20% said nothing would get them to change.

Roughly one in five (18%) of American adults recently told Pew they still do not use the Internet at all.

--Written by Gary Krakow in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

Gary Krakow is TheStreet's senior technology correspondent.

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