Please Don’t Force Low Rates

The National Telecommunications and Information Administration (NTIA) conducted an annual broadband survey in 2021. The survey asked folks who didn’t have home broadband what they would be willing to pay, with the question, “At what monthly price, if any, would your household buy home Internet service?” The purpose of the survey was to understand the kind of price points that might be needed to get broadband to more of these households. Three-quarters of respondents said they would only get broadband if it was free. I find this result to be troubling for several reasons:

• Many of the homes in this category are the poorest homes that truly can’t afford broadband. I’m sure many of the folks who say they can’t afford broadband would love to have it like most of the rest of us. But as important as broadband is, it’s not more important than rent and food. 
• Not everybody who says they can’t afford is telling the truth. How do I know this? What I have discovered in doing surveys is that the responses to any survey questions involving money are not fully reliable. A question I’ve often asked is what people would like to pay.
• I sympathize with the NTIA if they try this. The agency wants to get broadband into every home, and the only way to do this for the poorest homes is to make broadband somehow free. I know that rural cooperatives and telephone companies might try to make this work. But as I tell all of my clients – you have to let the numbers speak. 

Ultimately, I know forcing low rates is tempting, and it would feel like a good policy. But you can’t put rate pressure on broadband providers willing to work in rural areas where costs are already sky-high. If the government wants the poorest homes to get broadband, the right solution is to do something like putting more money into the Affordable Connectivity Program (ACP). The right solution is not to ask broadband providers to shoulder the economic burden of too-low rates.