aptured a very large share of the long-distance market in recent years. Soon this wireless- wireline competition is likely to lead to a demand for deregulation of rates on the fixed network as well. The Broadband Revolution Ithough the Internet did not develop commercially until 1990 and the World Wide Web was not available until 1991, it did not take long for these forces and household ownership of personal computers to create a "Nation Online. "1 Just twenty years ago, only 8 percent of U.S. households had a computer; but by 2003, 61.8 percent had one. 2 Residential Internet connections lagged behind the growth in household computers at first, but by 2003 more than 50 percent of households were connected to the Internet (figures 8-1 and 8-2). According to the Census Bureau, between 1998 and 2003 the share of U.S. households connected to the Internet nearly doubled to 54.6 percent, driven by e-mail, e-commerce, and the explosion in the avail- ability of easily accessible information on the Internet. Unfortunately, more recent census data on household Internet use are sparse, but a private research company estimates that there were 79.2 million residential U.S. subscribers in the first quarter of 2004, equal to about 72 percent of U.S. households. 3 This rapid diffusion of a new communications medium led to a sharp rise in websites offering a variety of content, including recorded music, film clips, and electronic games. In a very short period, however, Internet users became frustrated by the "worldwide wait" that occurred when they con- nected to the Internet through ordinary modems at speeds of 50 kilobits per second (kbs). As a result, they began to seek higher-speed connections once the price of the electronic equipment required to deliver such services fell to affordable levels. 4 Larger businesses had been able to obtain access through The Broadband Revolution Figure 8-1. U.S. Households with a Computer by United States, Rural, Urban, and Central Cities, Selected Years Percent United States Rural Urban Cent