Broadband Cost Recovery: A Study of Business Models for 50 Broadband Providers In 24 US States

The cost to manage video streaming in broadband networks is growing 2-3 times faster than revenue, frustrating broader investment and affordability goals. Some 44 of 50 broadband providers report that streaming video accounted for at least half of all their network traffic, with at least 23 providers reporting that streaming video accounted for at least 70 percent. Three-quarters of broadband providers experience that video streaming negatively impacts their ability to serve their customers without additional investment. Middle mile upgrades and related investments initially budgeted every 4-5 years must now happen every 2-3 years, an 83 percent cost increase in just two years. Revenue can’t keep pace with the rate of traffic growth, even with the addition of new customers. Given the need to ensure affordability, just 11 percent of the broadband providers reported that their customers are willing to pay more for broadband because of the investment requirements to facilitate streaming video. Separate independent reports project internet traffic to grow at 25 percent in coming years, with the firms Alphabet, Meta, Amazon, Apple, Microsoft, Netflix, Disney+, and TikTok accounting for most traffic. The role of tech platforms to ensure broadband affordability and cost recovery Strand Consult’s new report shows that the single largest financial beneficiary of broadband is the set of online technology platforms. Whereas telecom providers have been paying billions of dollars for years to support broadband subsidies, the richest tech platforms contribute zero.