The Technology Policy Institute recently published a report Broadband Prices 2024 that examines the prices charged for a few common broadband speeds since 2013. The report gathers data on pricing from three sources:

• The FCC’s Urban Rate Study.
• The US Census Bureau of Labor Statistics (BLS) Urban Rate Survey.
• The US Census Bureau of Labor Statistics (BLS) Consumer Expenditure Study.

The study reaches the following conclusions:

• Nominal prices for any given speed have been trending downward for years, but 2023 showed some changes. In 2023, the price of plans offering 25 Mbps and 100 Mbps down continued to decrease, but the prices of plans offering 50 Mbps and, to a lesser extent, 1000 Mbps increased relative to 2022.
• Historically, internet service prices have risen more slowly than overall inflation, sometimes much more slowly. For instance, in 2022, when general inflation (CPI-U) reached 9.1 percent, internet prices only increased by 2.6 percent. The FCC noted that “in real, inflation-adjusted terms, prices for Internet services declined by approximately 19% between 2009 and 2023. However, internet service prices rose faster than overall inflation from late 2022 to 2024.
• People in the lowest income quartile consistently spend the least on internet access. The latest data is 2022, and until that point do not see significant differences in how expenditures change across income groups.

The study uses non-discounted list prices charged for broadband. The study also weights the prices by the size of the ISP – so that a Comcast price has a lot more influence on the composite price than smaller ISPs.

I have no doubt that the results of this study are factual since the Technology Policy Institute is highly regarded as an independent researcher. But I have a problem with the stated results since it doesn’t put prices into context over time. The results of this study feed into the narrative that is rolled out every year by the lobbyists for the biggest ISPs – that broadband prices are getting cheaper. The big ISPs mean that the price per megabit is getting cheaper – but this study says the absolute prices are getting cheaper.

The easiest way to understand my objection is to consider the price of a 100 Mbps broadband product from 2013 until today.

• In 2013, 100 Mbps download was the premier product for all of the big cable companies. This is the product that most new customers were slotted into and was by far the most common product sold by cable companies.
• The price for the 100-Mbps product from cable companies never decreased. In fact, the big cable companies like Comcast and Charter raised rates almost every year with increases that were faster than the rate of inflation.
• What this study missed is that a 100 Mbps product sold today by a cable company is not the same product as the one sold in 2013. A customer that had a 100 Mbps product in 2013 had a premium product that would have been upgraded between 2019 and 2022 to a speed of around 300 Mbps. This speed upgrade was automatic, and customers didn’t have to ask for it.

This study is comparing what was the premium broadband product in 2013 to what is now a low-tier product that might only be available to low-income homes. While the speed is the same in 2013 and 2024 – this is not the same product – and comparing the 100 Mbps product for the two time period is comparing apples and oranges. A customer who had 100 Mbps broadband in 2013, now has 300 Mbps broadband and is likely paying $30 or $40 more per month than there were a decade ago.

The same would be true for any fiber provider, although most of the big ones no longer offer a 100 Mbps product. The only place where cheaper 100 Mbps broadband came into the market was recently as T-Mobile and Verizon FWA introduced 100 Mbps broadband at much lower rates than the cable companies.

The trend identified in this study for gigabit broadband is a lot more believable and matches the reality of the market. In 2013 the cable companies treated gigabit as a super-premium product and charged a premium price. As fiber providers start showing up in the market, the cable companies dropped the cost of gigabit broadband. Competition clearly lowered the price of gigabit broadband.

I have no doubt that the facts of this study are correct – but in a complicated industry like broadband it’s vital to understand the context. I think the right headline for 100 Mbps broadband is that customers were migrated to faster speeds and paid more over time.