J.D. Power and Associates Reports: AT&T WorldNet Ranks Highest in Customer Satisfaction Among Largest National Subscription Internet Service Providers

Business Wire, Sept 12, 2000

Business Editors & Telecommunications Writers

AGOURA HILLS, Calif.--(BUSINESS WIRE)--Sept. 12, 2000

High-Speed Service Outpaces Dial-Up Connection in

Overall Customer Satisfaction

AT&T WorldNet ranks highest in overall customer satisfaction among the largest national subscription Internet Service Providers (ISPs), according to the J.D. Power and Associates 2000 National ISP Online Residential Customer Satisfaction Study(SM) released today.

AT&T WorldNet's leading position is driven by strong performance across all seven factors that determine overall customer satisfaction, including the two top drivers: cost/billing/image and speed/availability. AT&T WorldNet also excels in e-mail services and navigation/access to other portals. The remaining drivers of overall satisfaction include suitability of services/content, customer care/technical support and ease of use.

EarthLink, which merged with MindSpring earlier this year, places a close second in overall customer satisfaction. EarthLink performs above industry average in most factors, with particular strength in customer care/technical support.

"To stay competitive in the U.S. Internet industry, companies must offer a consistent level of service across all drivers of customer satisfaction," said Kirk Parsons, director of telecommunications at J.D. Power and Associates. "Both AT&T WorldNet and EarthLink clearly meet this requirement."

The largest six subscription ISPs profiled in the study account for more than one-half of residential ISP subscriptions in the United States. The remaining subscriptions comprise an extremely fragmented but growing group of small national providers, regional and local telephone companies and cable company-owned ISPs.

These smaller providers are threatening the dominant positions of the largest six national subscription providers, as they account for 52 percent of new household subscriptions in the past year. Part of this growth is due to the strategy of offering the option of high-speed service through either DSL (Digital Subscriber Line) or cable-modem connections.

"A gateway to high-speed access is essential to customer growth and retention," Parsons said. "It is clear that the next battleground among the national and regional ISPs is to attract new customers to their high-speed service. Regional telephone and local cable providers are responding to consumer demand by dedicating greater resources toward rolling out DSL and cable-modem services.

"As these services become available, the top ISPs are expected to move swiftly to build upon and expand their offerings from traditional dial-up to new high-speed access to protect their market positions," he added.

The study identifies vast differences in customer satisfaction between households that receive high-speed access versus traditional dial-up service. High-speed users are significantly more satisfied overall with their Internet service than are dial-up users. However, not all high-speed connection options perform equally with respect to customer satisfaction:

-- Households that use cable-modems report higher satisfaction levels overall
than either DSL or ISDN (Integrated Services Digital Network) households. The
advantage of cable-modems is primarily due to two factors, suitability of
services/content and e-mail services.

-- DSL households report performance weaknesses in two factors: customer
care/technical support and e-mail service. In addition, ISDN customers report
much lower satisfaction ratings in ease of use, most notably in ease of signing
in or logging on online, than do either DSL or cable-modem customers.

Other highlights from the study include:

-- On average, subscribers report having used their ISP for two

years and report spending about 15 hours a week online. More

than 93 percent of subscribers report sending/receiving e-mail

on a daily basis. Other daily activities included 66 percent

who said they surfed the Internet while 32 percent used it for

instant messaging.

-- Eighty-five percent of ISP subscribers say they have made at

least one purchase online, with 40 percent indicating they

make at least one purchase per month (up from 31 percent in

1999).

-- Due to the increased number of search engines available to

consumers, the preference for a particular search engine fell

from 56 percent to 42 percent in the past year. Among those

users who do have a preference, Yahoo continues to receive the

most mentions by far at 69 percent, followed by Alta Vista,

28 percent and Excite, 27 percent.

-- Approximately 14 percent of Internet users indicate a strong

intent to switch ISPs in the next 12 months. An additional

22 percent say they might consider a switch at some point.

Connection speed is most often mentioned as the reason why

consumers say they might switch providers, 79 percent.

The study results are based on responses from 4,173 households nationwide. Respondents were randomly selected from an online panel of Internet user households that represent the customer bases of the largest national subscription Internet service providers.