Great news for consumers: New study reveals broadband prices declined over past five year
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In the last several months, consumers have seen inflation spikes at rates not seen in decades. Price hikes have affected so many parts of everyday life, from gas to groceries. It’s no wonder why families are concerned about how to make their income stretch as far as it needs to go.
There is one notable bright spot for consumers, though. As first reported in the Wall Street Journal, according to BroadbandNOW, the average monthly subscription cost for broadband–what consumers pay out of pocket each month for service–has declined substantially over the last five years. Depending on what speeds a home purchases, the cost of service has fallen anywhere from 14% to 42% over that 5-year span. The steepest price declines have been for subscriptions for the fastest, most capable internet packages (subscriptions with speeds over 200 megabits per second). And in some cases, these price declines accelerated right as the pandemic underscored our nation’s need for reliable and affordable broadband connections.
Prices have fallen since 2016, with the highest speed plans falling the most. When looking at the average price for internet in each speed bucket starting in the first quarter of 2016 compared to the fourth quarter of 2021:
The average price decreased by $8.80 or 14% for 25 – 99 Mbps.
The average price decreased by $32.35 or 33% for 100 – 199 Mbps.
The average price decreased by $34.39 or 35% for 200 – 499 Mbps.
The average price decreased by $59.22 or 42% for 500+ Mbps.
Tyler Cooper and Jason Shevik, “Broadband Pricing Changes: 2016 to 2022,” BroadbandNOW Research (Feb. 7, 2022), https://broadbandnow.com/internet/broadband-pricing-changes
Even as prices decreased, broadband providers invested billions of dollars in their networks – connecting more homes, expanding capacity, and deploying new technologies. Every day–especially throughout the pandemic–companies like Verizon work hard to deliver quality, affordable, high-speed broadband service to our customers. Because of those investments, our nation’s broadband networks were able to respond to the increased bandwidth demand from remote work and school, while actually on average lowering the cost per month for subscribers during these challenging times.
We know more work still needs to be done. As a nation, we face challenges extending broadband to those who do not currently have networks available in their communities and to those that have legacy offerings such as DSL. New technologies like 5G Fixed Wireless Access can help close that digital divide (and bring fresh competition to the broadband marketplace). The massive federal investments in broadband powered by the Infrastructure bill and other legislation will also help make it possible for everyone to have access. And even where broadband networks are available with service at reduced rates or for no cost, we have to address the numerous non-cost barriers to broadband adoption that may continue to prevent people from embracing broadband.
Even when there is access everywhere, and despite the decrease in prices overall, some low-income households will still need help affording connectivity. Carefully targeted programs like the Federal Communications Commission’s Affordable Connectivity Program (ACP) are tackling this challenge head on, offering eligible consumers monthly subsidies to decrease the cost of broadband further. Over a thousand broadband providers, including Verizon, have volunteered to participate in the ACP, and as noted at a recent White House event with Vice President Kamala Harris, the program already has over 10 million enrollees. Taken together, the falling prices for broadband documented by the BroadbandNOW report and efforts like the ACP are helping more and more Americans join the broadband age.
Thankfully, at a time when consumer prices are on the rise, broadband is becoming not only more widely available and robust but also more affordable. This is a win for consumers, and a win for our country’s digital future. Let’s continue to work together to connect the Nation.