Tag Archives: recession-proof

Signs of Trouble for ISPs?

It’s always difficult for ISPs to fully understand how changes in the economy might impact them. Folks in the industry see the usual statistics on unemployment and inflation, but those don’t really tell much about the future as it relates to broadband adoption. I’m not an economist, and this blog is not a prediction, but in the last few weeks, I’ve heard a number of unrelated economic statistics that I find troublesome when taken as a whole.

  • MVPDs like Hulu, Sling TV, and Fubo are all reporting a significant loss of subscriptions. At the same time, the free ad-supported video services like Pluto TV and Tubi are seeing big customer gains. The press that covers these companies believe that subscription losses are mostly due to households cutting back on spending.
  • A Washington Post article reported that the number of households being cut off for nonpayment of electric and gas utility bills is climbing.
  • The delinquency rate for mortgages has been increasing. In the fourth quarter of 2025, the national rate was 4.26%, up 28 basis points from a year earlier.
  • Auto loan delinquencies are at the highest level in thirty years, and in early 2026, 6.9% of loans were 60 days overdue. More than 3 million cars were repossessed in 2025, a huge increase over prior years.
  • The U.S. consumer sentiment survey taken in April 2026 showed an historically low level of consumer confidence. This survey has been conducted monthly for the last 74 years by the University of Michigan. 22% of the respondents to the April survey reported deteriorating personal finances.
  • It seems like I’m seeing a new announcement almost daily from companies that are laying off thousands of employees or shutting down outlets or factories. Meta, Microsoft, and Oracle all recently announced huge layoffs. While there are always announcements of this sort, even in a robust economy, I can’t remember the last time I saw this volume of announcements.

None of this sounds like good news for ISPs. There has always been a general consensus in the industry that broadband is somewhat recession-proof. But is it really? 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?

We already have strong evidence that broadband is related to household income. A recent Pew Survey showed that most households have smartphones. It also showed a strong correlation between household income and broadband adoption. The survey showed that 14% of homes with household incomes under $30,000 don’t have home broadband, while only 4% of homes with household incomes over $100,000 don’t have broadband. This leads to the fairly obvious conclusion that households will give up a broadband connection in favor of a smartphone subscription if money gets really tight.

Another thing to consider is that even if broadband is recession-proof, it doesn’t mean that people will continue to pay high prices for broadband. Consider the FWA cellular broadband sales from AT&T, T-Mobile, and Verizon. The three carriers have consistently been adding around one million new subscribers each quarter. The main attraction of FWA is broadband priced between $20 and $30 per month for customers who will bundle broadband with a cellular plan.

Of course, a recession is not inevitable and may not happen this year or next. But the statistics cited at the beginning of this blog tell the story that a lot of homes are in financial distress, even if the overall economy might not be in a recession. It’s possible that the traditional paradigms of what defines a recession no longer apply. Perhaps we’re seeing the economy collapse for the bottom earners in a way 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 customers find home broadband to be indispensable. It’s easy for those of us live and breathe broadband to suppose that people think of broadband as a necessity – but is that really true for homes that can’t afford electricity or who can’t make car or mortgage payments?

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.