Broadband Prices 2024

Consumers and policymakers always care about broadband prices. The issue is of particular interest to policymakers now that the Affordable Connectivity Program (ACP) has ended and as states try to figure out what the “affordability” requirements of the BEAD grants mean and how to implement them. Such analysis should begin with an understanding of current prices and how they have changed. This analysis uses three sources to consider the cost of broadband to consumers: the Federal Communications Commission’s Urban Rate Survey (URS), the U.S. Census Bureau of Labor Statistics (BLS) internet service price index, and the BLS Consumer Expenditures Survey (CES) internet access expenditures. Like many goods and services, broadband prices are complex because they are affected by so many factors, both on the supply and demand sides. The prices of several tiers continue to decrease, but at the same time some have increased, with some evidence that in recent years internet access prices may be increasing faster than inflation. One or two years does not necessarily mean a permanent change in a trend. Indeed, price increases above inflation for the past two years may not be surprising given that overall inflation was about three times as high as that for internet access from 2021 to 2022. Additionally, with the end of the Affordable Connectivity Program, many providers have announced lower prices of plans available to low-income consumers. We should expect to see these decreases reflected in future price indices and average prices.