Is Broadband Recession-proof?

It’s been a while since I’ve been asked this question of whether broadband is recession-proof. The question was prompted for me when I saw recent quotes from Lumen and Altice executives saying they don’t fear any downside of fiber broadband customers during an economic slowdown. The last ‘normal’ recession we had was from 2007 to 2009, and I remember this being a topic of conversation then. We recently made it through one of the most unusual recessions ever during the pandemic, but this question didn’t seem relevant then since the pandemic forced everybody to shelter, work, and school from home, making broadband subscriptions soar.

But there are new predictions of a possible coming recession, and it’s fair to ask if ISPs should be worried about it. There are some businesses that have always been cited as recession-proof, like grocery stores, health care facilities, liquor stores, discount retailers, pet food makers, and candy companies. Has broadband joined that list of recession-proof businesses? If people start losing jobs, do they now consider broadband to be a necessity that they hang onto over other expenses?

I heard some talk of broadband being recession-proof during the 2009 recession. I think the question was prompted by new services hitting the web – Spotify had started in 2006, and Netflix had moved content online starting in 2007. People suddenly had more uses for broadband than just social media and email. Since 2009, broadband has grown in importance in many people’s daily life. A huge percentage of people now watch video online, and music has largely moved online. Gaming has largely moved online. Video calls have become commonplace, and not just for work. A lot of people get news and weather online. We use digital assistants to play music, turn on the lights, and to answer basic questions. Our appliances have all gone online, although I’m still trying to figure out why. We deploy security cameras outdoors and nanny and pet cameras indoors to check on our homes when we are away. Shopping has largely gone online for a lot of households. Schoolwork, including homework, advanced placement classes, and undergraduate and graduate college courses are now online. Telemedicine has gone online, particularly meetings with counselors and therapists. Many millions of people now make a living working at home and sitting at a computer – more than ever before.

The question of whether broadband is recession-proof is really asking if people will willingly give up the many things that they do online. Is there a point in people’s lives where broadband becomes a necessity that they will fight to keep when times get tough?

Even if broadband is recession-proof doesn’t mean that people will continue to pay high prices for broadband. I wonder about the big ISPs who think that fiber is safe. It’s not hard to imagine a lot of people downsizing to cellular FWA service as long as it is good enough to get by.

Will homes drop traditional cable TV before they ditch broadband? A recession might drive another nail in the coffin for traditional cable TV. One of the best ways to save money is to drop the $100 cable plan. The overall cable industry penetration rate is now just barely over 50% and dropping like a rocket. I have to think that a recession will drive even more millions to drop cable – especially if that enables them to keep good broadband.

Of course, a recession is not inevitable and may not happen this year or next. The post-pandemic economy looks to be something new with a lot of people making a living in non-traditional ways. It’s possible that the traditional paradigms of what defines a recession no longer apply. If the economy retracts, it’s likely to do so in new ways we haven’t seen before.

I suspect most of the people who read this blog think that broadband is essential for daily life. But the big question that will have to be answered is how many others find broadband to be indispensable. It’s easy for those of us live and breathe broadband to suppose that more people each year are finding broadband to be a necessity – but that still doesn’t mean that enough people feel that way that we can declare broadband to be recession-proof.

2 thoughts on “Is Broadband Recession-proof?

  1. I work as a freelance blogger. Unfortunately, I have been out of work for the last three months. Yet, I have not downsized my broadband plan or usage. As pointed out in your blog post, I am upgrading my knowledge with two courses these days before I start searching for new projects.

  2. Since the 1990s, customers have tended to treat their telecom connection bill as an essential of life. That being said, the ability to pay the monthly bill is susceptible to all the regular questions of monthly life.
    Broadband service, in and of itself, is recession-proof. The ability to pay for it may not be. (I hope I am wrong!)

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