Innovative Systems of Mitchell, South Dakota, commissioned a survey of broadband and bundled rates paid by rural residents. This is the eighth year of the survey. The 2022 survey focused on zip codes that are completely rural in order to find out about rural rates. The results come from surveys administered to 841 rural residents.
The study showed that the average rate paid for rural broadband increased from $68 per month in 2021 to $71 in 2022. The average bill for customers that bundle broadband with video increased from $114 in 2021 to $121 in 2022.
I was not surprised to see rural rates climbing because rates seem to be moving upward everywhere. For example, in urban markets, all of the major cable companies have had rate increases. A lot of other ISPs have followed suit in an attempt to keep ahead of inflation.
But nationwide averages don’t likely tell the story everywhere in rural markets. It has been my experience, having worked in dozens of counties in the last few years, that rural rates generally have a lot more geographic variance than urban rates. In any given rural county, there generally is only a tiny handful of ISPs with significant market penetration, and the rates of those specific ISPs might be significantly different than even in a neighboring county.
The rural broadband landscape is incredibly diverse. There are counties where the largest ISP is still the incumbent telco with DSL. Many counties have WISPs providing broadband – but I see counties with no WISPs and others with a half dozen. There are households using both high-orbit satellites like Viasat, but also Starlink. There are often a number of households using cellular hotspots – and now I’m starting to see some counties where the newer and faster FWA broadband is making inroads. Some lucky counties now have rural fiber – and some have a lot of it.
This all means having drastically varying average broadband costs from county to county. For example, I would expect a county where most subscribers use satellite or hotspots to have the highest average rates – because those two options can be incredibly expensive for a home that uses even a modest amount of broadband in a month. Viasat, Hughesnet, and the various hotspot products all have meager data caps, and I’ve talked to homes that regularly had broadband bills during the pandemic of $500 or more per month, with minimum bills easily at over $100 for satellite. Starlink recently raised its rate to $120, with some customers having to pay $130.
At the other end of the price scale are some cooperatives that offer low rates on fiber. There are a few coops that sell a gigabit connection for $50 or less.
WISP prices are all over the board, with some WISPs with $60 rates while others are closer to $100.
DSL rates from the large incumbent telcos have held steady for many years, although rates have recently changed. For example, CenturyLink increased DSL rates in 2022 after many years with the same rates.
Probably the most generally affordable rural rates are FWA wireless from T-Mobile, Verizon, and some smaller cellular carriers. But I still haven’t encountered a rural county where this is a widely available product. Many rural counties still have not seen the upgrades needed for FWA. But even in counties where FWA has been deployed, the product is only available for folks who live fairly close to cell towers – and much of rural America has a real dearth of cell towers.
I’ve studied counties in the last few years where average prices were in the $60s and others where the average was closer to $90. My surveys have produced results similar to this one where I’m finding the overall average rates to be a little closer to $75 per month – but this survey has a much wider sample of communities
Upgrading to faster networks from grants will not necessarily bring better rates. I’ve already seen a few RDOF winners with gigabit rates in the $60 range, while a few others have starting rates close to $100. I think rural prices are always going to be very dependent on the local ISPs that take up shop in a given county.