Fiber to the Home Council

The growth and competition in ultra-high speed broadband services in your area may mean more money in your pocket — and better services across the board.

Using data on broadband plans — including upload and download speeds, standard and promotional monthly prices, and other information such as installation charges and plans bundled with other services, such as telephone or television — for the 100 largest Designated Market Areas (DMAs), our partners at Analysis Group have analyzed what happens when new firms enter a market offering a broadband service. Here’s what they found:

• If a gigabit service is offered in your area, prices for high speed plans of 100 mbps or more are reduced by approximately $27 dollars per month — about a 25% drop from the standard price.
• If you just look at gigabit speed plans, the effect is particularly significant — one gigabit provider to two providers reduces prices by approximately $57–62 per month, or between 34% to 37%.
• Even when including plans with other speeds, there is a substantial effect. When looking across all broadband plans (with speeds of over 25 mbps), prices go down between $13 and $18 per month, or 14% and 19%.
• The more broadband providers you can choose from, the more prices drop. For example, an increase of one additional service provider is associated with approximately a $1.50 decline in the monthly standard broadband price for internet plans with speeds ranging from 50 Mbps to less than 1 Gbps. So, for example, if an area went from having one broadband offering to having six competitors, the price would decline by approximately $7.50. That’s equal to a reduction of 8% in the monthly standard price.
• Finally, if high-speed broadband is offered in a market, that increases the likelihood that other providers will introduce higher-speed plans to match the speeds being offered by the competition. In particular, they found that each additional competitor will increase the probability that other broadband providers in the market will offer broadband at those higher speeds by 4% to 17% per year.