Broadband Myths: Are High Broadband Prices Holding Back Adoption?

Broadband affordability is a problem for some Americans, but not the “crisis” advocates claim. Municipal broadband prices are not substantially different from private ISPs’ broadband prices. After accounting for associated costs, private entry-level broadband plans are comparable to, if not more affordable than, municipal broadband. US entry-level broadband rates are also comparable with prices in peer nations. Studies focused on advertised prices often fail to account for average income. Normalizing the data demonstrates America’s competitive rates. Affordability is only part of the adoption problem in America’s digital divide. Digital literacy, device costs, and other barriers also hamper adoption. So, to get more people online, policymakers need to avoid affordability tunnel vision. Congress should provide flexible subsidies directly to low-income users rather than attempt large changes to industry structure. Policymakers also should incorporate automatic stabilizers to surge broadband benefits during economic downturns.