Joey Supan wrote an article for CNET with the headline of Internet in the US Costs $63 a Month. The research for the article is based on the advertised prices charged in different parts of the country by 27 of the largest ISPs. The headline is for the median price found in that research, meaning half of the prices were higher and half lower. The $63 price assumed that customers would take advantage of any auto-pay discount.
The article went on to add that the ISPs add another average $15 to rent the equipment needed for broadband, meaning the average total monthly cost of broadband in his analysis is $78. The report also assumed people pay the advertised marketing rates but that many ISPs jack up advertised rates in the second and third years. The medium price before equipment charged increased to $76 in the second year and $80 in the third year. With equipment fees added, the second and third year median rates increase to $91 and $95.
That is higher than what I’ve been seeing from surveys we’ve been conducting over the last few years in rural counties across the country. Our surveys have shown average broadband bills (not median prices) range from $75 to $80. The differences in average prices is county-specific based on the ISPs operating locally.
I think the difference between my surveys and the results of the CNET article is that a lot of folks are willing to accept slower speeds, and inferior broadband performance to save money. The CNET price assumes that people buy the best broadband available to them.
This article also shows what most other analysis shows – people in rural areas pay more for broadband than people in towns and cities. In many counties Starlink has done well, but they are more expensive than other broadband. Subscriptions to high-orbit satellites or cellular hotspots are also incredibly expensive due to overage charges due to low data caps – something this study couldn’t quantify from a rate sheet.
To offset what CNET reports and we’ve found, prices are currently dropping for lucky rural customers within range of the FWA broadband from Verizon or T-Mobile – but the coverage areas of this new technology is generally not large in the rural counties I’ve examined in detail.
The study only found a few examples of broadband junk fees in broadband prices. This included a $12.97 network access and maintenance fee from Astound, a $12.95 tech assurance fee from Metronet, a $3.99 Internet cost recovery fee from CenturyLink, and $2.97 broadband cost recovery fee from Consolidated Communications. We also see that many ISPs also hide or disguise their equipment fees when they advertise low rates.
The profile of available prices will change in rural areas when new broadband networks are finally built from the many grant programs. That’s not always going to mean lower prices, but it should mean higher-quality broadband. I expect customers paying a lot for satellite broadband or traditional cellular hotspots today will flock to a new grant-funded network. I expect the advent of grant solutions will allow telcos to finally shut down DSL networks and force households to some other technology. In urban areas, competition from fiber and FWA is pushing down prices in neighborhoods that are lucky enough to get a technology alternative.
Consumers have been yelling for broadband competition for many years, and we’re finally seeing it. Unfortunately, it’s happening neighborhood by neighborhood and not industry-wide, but it’s a start. I expect that if CNET repeats this survey in a year they will find even lower rates for advertised broadband.