A year ago, John Horrigan wrote an article for the Benton Foundation that predicted that as many as 5.6 million households would drop their home broadband connection due to the impact of the One Big Beautiful Bill. He based that assessment on the changes that the OBBB will make to federal programs that benefit low-income families.
The federal programs that Horrigan thought would hurt broadband subscriptions for low-income households included:
- The Center on Budget Policy and Priorities estimated that four million people would lose SNAP benefits (food stamps for those not familiar with the acronym) between July 2025 and March 2026. The actual number turned out to be 4.3 million.
- Horrigan predicted that millions would lose a federal healthcare subsidy from ACA, or the various state programs that are part of the ACA. So far, enrollees in ACA programs have dropped from 22.1 million in 2025 to 19.2 million – a drop of 2.9 million.
- There was a prediction that insurance premiums would increase for everybody due to the drop in ACA enrollments. The 19.2 million people that stayed in the ACA health system saw an average monthly premiums increase of $122 per month. The average health insurance premium for the country as a whole increased by $178, while the full out-of-pocket costs increased even more due to increases in deductibles and copayments.
Now that we are halfway through 2026, there are also cost increases hitting households that Horrigan didn’t anticipate. The nationwide average cost of a gallon of gas was $2.81 at the end of 2025 and is now over $4.00. There are a number of estimates showing that the monthly cost of groceries for a family has increased by $30 to $45. The real big upcoming kicker is that health insurance rates, both for ACA participants and everybody else, are expected to be significantly higher in 2027 than they were this year. It seems there will also be a big cut in federal support for Medicare prescriptions.
What does all of this have to do with broadband subscriptions? There are currently over 26 million homes in the U.S. in the lowest quintile that have household incomes below $33,000 per year. For these households, increases in expenses for any of the above reasons mean they have to cut expenditures elsewhere. Somebody who loses SNAP or who pays more for gas or insurance has to make up by cutting elsewhere.
Horrigan’s prediction of 5.6 million homes that will lose broadband started with a universe of homes that already have broadband. When a household has an income under $33,000 per year and is buying broadband, they think it’s important.
Horrigan’s prediction may not fully come to pass because there is a middle-ground to abandoning broadband. Earlier this year, I worked with two ISPs that serve areas that are primarily low-income. Both ISPs told me that they are experiencing a big increase in a new kind of churn – customers that temporarily drop broadband because they can’t afford it, but who then resubscribe a few months later when they’ve scraped together enough money to buy broadband again.
The other thing that a cost squeeze does is to drive homes to look for broadband alternatives. I think that people in this category are the ones dropping cable companies and going to FWA broadband and other less expensive options. Unfortunately for families in this position, lower monthly rates typically mean slower speeds and less reliable broadband performance. A lot of low-income families have stayed with DSL for years because it was the least costly option in cities. However, in recent years, the big telcos have increased the cost of DSL to be the same price as fiber to get people off the copper network – but these higher prices are often too high for too many homes with low incomes.
There is a nationwide consensus that we are all better off when most families have broadband and can partake in the many benefits broadband brings to a household. If we don’t somehow change the current path we are on, I think Horrigan’s estimate of 5.6 million households that drop broadband will be far too low.