Tag Archives: U.S. News and World Report

The High Cost of Broadband

U.S. News and World Report published the results of a broadband survey in April 2024 that looked at what people pay for broadband. Respondents to the survey said they had originally paid an average price of $77 for Internet service but that current bills had climbed to an average of $89 per month through price increases or from the lapse of promotional pricing.

They recently updated the survey in the five most populous states – California, Texas, Florida, New York, and Pennsylvania, and surveyed 500 people in each state. The survey asked about the initial price of broadband when people first subscribed and the price today. They asked about issues like data caps that affect prices. They asked if people understood their broadband speeds. And they asked how respondents felt about the end of the Affordable Connectivity Program.

Following are some of the key findings from the latest survey:

  • Overall, the survey found higher prices than the earlier survey. The average initial price paid by all respondents in this survey was $81, compared to $77 in the previous survey. They found that the average current monthly bill is $98, which is considerably higher than $89 found in the previous survey.
  • Between 12% and 17% in various states had run into a data cap issue.
  • 53% of respondents said they had some level of challenge paying their broadband bill. 14% of respondents said they often found it difficult to pay their broadband bill, while 39% said they occasionally had a challenge.
  • 76% of respondents said they would like the government to put a cap on the monthly cost for broadband.
  • 87% of respondents were in favor of revamping the Affordable Connectivity Plan that gave a $30 discount for low income households. I have to think they surveyor had to explain ACP to most people – it’s hard to imagine that a huge percentage of people know what that is.

By state, the average original price and current average price for broadband is:

  • California – $78 and $95
  • Texas – $81 and $92
  • Florida – $79 and $91
  • New York – $85 and $99
  • Pennsylvania – $83 and $110.

Since overall prices are higher than the previous survey, I wonder if broadband is more expensive in big states? My consulting firm does broadband surveys, and we’ve never gotten a response with an average rates as high as $98.

These survey results tell a very different story than is told every year by USTelecom, the trade association for the largest ISPs. In last year’s fourth annual Broadband Pricing Index, USTelecom made the claim that overall broadband prices dropped over 18% between 2022 and 2023.They make this claim by looking at broadband as a cost per subscribed megabit of speed – which has no relevance to the way that people use broadband.

I wish surveys like this one would ask one more question. I’d like them to ask if respondents feel they have a choice of ISPs. My gut tells me that customers who are served by the only fast broadband ISP likely pay a higher price than people who can choose between multiple fast ISPs.

New Survey on Broadband Speeds and Prices

U.S. News and World Report published the results of a new broadband survey in April that concentrated on what people are paying for broadband. The survey was administered to 2,500 people nationwide and asked about prices paid for broadband, service reliability, and overall satisfaction with their ISP.

The survey had some interesting findings:

  • The survey found that 95% of U.S. adults say they use the Internet.
  • The survey showed that the number one concern of U.S. Internet customers is price – and the survey was taken before the end of the ACP low-income subsidy.
  • Respondents in the survey had initially paid an average price of $77 for Internet service. However, their current bills had climbed to an average of $89 per month through price increases or from the lapse of promotional pricing.
  • New Jersey has the highest broadband rates, with an average monthly bill of $126. Folks in New Jersey have also seen the biggest bill increase, with the average price increasing by $28 since they first purchased broadband.
  • The lowest Internet bills are in Montana, where the monthly average bill is $70.
  • Folks in North Dakota have seen their average broadband bills drop by an average of $4 since they first signed up for service.
  • One-third of respondents said that cost is an issue, and they have to trim other expenses to be able to pay for broadband.
  • 54% of respondents are still bunding broadband with another service. This is way down from surveys I remember from a decade ago where 75% or more of households were buying a bundle.
  • 38% of respondents don’t know the speed they are paying for.
  • Older consumers are subscribing to slower speeds, with the most common package for those over 54 years old being between 25 Mbps and 100 Mbps. The age group of 45 to 54 had the fastest average speeds, with most subscribing to speeds between 300 Mbps and 1 Gbps.
  • 75% said their Internet connection is reliable, which the survey saw as good news. I guess I’m a pessimist and see that 25% of people don’t have a reliable connection.
  • Subscribers in the South were the most satisfied with reliability.
  • 73% of all subscribers were satisfied with their Internet service.

Overall, this survey showed the same trends that I’ve seen in other surveys, including the ones done by my consulting firm. Prices paid for broadband are definitely higher year after year – regardless of the claims of the big ISPs that broadband prices are dropping.

The bundle is growing less popular as millions of homes continue to drop traditional cable TV each year.

The majority of people are happy with the reliability of networks, but that means that 25% of homes are unhappy. About the same percentage (73%) are happy in general with their broadband connection.

The question I wished the survey would have asked is if people felt they have a choice of ISPs. The surveys we’ve been conducting show that a large percentage of homes, including many who are happy with their ISP, wish for a competitive alternative.

U.S News and World Report Broadband Survey

U.S. News and World Report recently conducted a nationwide survey on broadband usage and pricing. The survey captures a lot of statistics about broadband usage and creates a good snapshot of broadband usage in the summer of 2023. The survey talked to people in every state and has a statistical margin of error of 2%.

There are some interesting statistics on broadband usage.

  • 85% of survey respondents go online every day.
  • 31% of respondents say they are online almost constantly.
  • 8% of respondents don’t have home broadband access.
  • 20% of respondents have either one or no other choice of ISP.

As part of the survey, respondents took a speed test:

  • 64% are receiving download speeds faster than 100 Mbps or faster. According to the latest OpenVault report
  • 8% are receiving download speeds under 25 Mbps, which by the FCC’s definition, means they don’t have broadband.
  • 25% of respondents have upload speeds of 10 Mbps or slower.

This shows a disconnect between subscription speeds and actual speeds. The report from OpenVault from June 2023 showed that less than 11% of homes are now subscribed to speeds of 100 Mbps or less, but 36% of homes are not getting that speed.

The survey looked at a variety of issues related to broadband pricing.

  • Over half of respondents said that they paid between $20 and $60 when they first subscribed to their current ISP but that they are now paying between $41 and $80 for service from the same ISP.
  • 39% of respondents say that they have to cut other personal expenditures in order to afford to pay for their broadband bill.
  • 61% say that inflation is making it difficult to pay for their monthly broadband bill.
  • Only 45% of respondents think the speed they receive justifies the price they pay. 28% are unhappy with the speed they get for the price they pay.

These survey results should be a wake-up call to ISPs. ISPs have gotten complacent that broadband has become such a necessity that people will pay the bill at any price. But inflation is changing that situation, and the industry should take heed that 61% of broadband customers say that they struggle to pay their broadband bill.

I think price is a big factor in the amazing success of FWA cellular home broadband from T-Mobile and Verizon. Customers can buy FWA for prices from $50 to $70 depending on the specific situation, which is  now a lot cheaper than buying from any of the big cable companies that have starting prices of $85 and higher.

The survey also points out what speed tests have been showing. A lot of broadband customers are not receiving the speeds that ISPs claim to be receiving in marketing literature. In this particular survey, only 64% of respondents had a speed test of greater than 100 Mbps download – far fewer than would have been accepted according to what ISPs claim to be selling. It’s going to get interesting really quickly if the FCC under Jessica Rosenworcel increases the definition of broadband to 100/20 Mbps. According to this survey and according to the detailed speed test results I’ve been seeing, a significant number of homes are not receiving those speeds and fail the 100 Mbps download test, the 20 Mbps upload test, or both.