Broadband Prices Decrease Amid General Inflation

WASHINGTON, June 11, 2024 – During the past few years, the American economy has struggled with price inflation. But it turns out that broadband bills paid by more than 90% of U.S. households have bucked the trend.

That was a key message delivered by USTelecom, a trade association for major Internet Service Providers, in a recent industry analysis submitted to the Federal Communications Commission.

“At a time when inflation has become the norm, broadband is an outlier – prices continue to decline as speeds increase,” the trade association said in the 10-page document.

USTelecom’s comments were prepared by Policy & Advocacy Vice Presidents Kathleen Slattery Thompson and Diana Eisner for consideration in the agency's biennial State of Competition report to Congress.

The comments reported a consumer price decrease of 6.5% for the fastest internet speed tiers from 2022 to 2023. For comparison, the Bureau of Labor statistics reported a 4.9% rise in consumer prices during the same time.

Additionally, USTelecom’s analysis found that broadband providers’ most popular broadband speed tier dropped in price by 18.1% during the same period.

This reflects a wider industry trend of decreasing prices and increasing service quality, USTelecom said, adding that since 2015, the price of the fastest speed tier dropped by 39%, while download and upload speeds increased by 117.1% and 90% respectively.

“To put it simply, at a time when consumers are used to paying more for less, when it comes to broadband, they are getting more for less,” USTelecom said.

USTelecom has not been alone in spotting a decline in consumer broadband prices.

A recent paper released by Phoenix Center Chief Economist George Ford found similar results demonstrating that the broadband industry has been an “exception” to inflation trends.

Primarily arguing against increased broadband regulation, Ford compared the cost of some regulated services with the decreasing costs of broadband over the past eight years.

For example, the cost of operating Priority Mail increased by 23% since 2016. compared to a 6% decrease for broadband services.

“Broadband prices are a saving grace in difficult times. Market performance in the broadband industry is truly remarkable,” Ford said.