New York Fed Finds Low-income Neighborhoods Pay Higher Share of Income for Worse Broadband

WASHINGTON, Sept. 26, 2025 – For low-income Americans, paying for broadband not only takes more of their income but also comes with inferior service quality when compared to wealthier areas.

That’s the conclusion of a new study by the Federal Reserve Bank of New York released Friday.

The bank found the cheapest plans available in low-and-moderate income census tracts cost on average 2.43 percent of the median monthly income, compared to just 0.51 percent elsewhere. That’s above the Federal Communications Commission’s 2 percent affordability benchmark.

The report was authored by Ambika Nair, a community development analyst at the New York Fed. Nair also found that as that percentage of income consumed by broadband climbed, average download speeds tended to decrease.

“This may be for one of two reasons: one, households are opting for poorer quality plans simply to be able to afford them, or, two, their neighborhoods may offer only lower quality broadband technology at a less affordable price,” she wrote.

The report’s findings might not startle many who analyze and comment on the structure and performance of broadband markets, but it could help support efforts to get lawmakers and regulators to revive efforts to make broadband more affordable for low-income Americans.

The bank created a new metric to gauge households’ ability to pay for broadband in a given area, which it called “relative broadband affordability.” That’s the percent of the median monthly household income in a given area that would be consumed by the average of the cheapest broadband plans offered in the area. The higher the percentage, the lower the relative broadband affordability.

The report used address-level broadband pricing data for 38 cities from 2022, collected by The Markup, and 2022 Census Bureau data.

“It is important to understand monthly broadband prices as a share of median household income, as this measure is more reflective of a household’s ability to pay for broadband, particularly in the context of their existing income constraints,” Nair wrote. “Broadband prices may not be significantly different in adjacent or nearby census tracts, but these prices as a share of household income in a low-and-moderate income census tract relative to a middle-and-high income census tract will likely influence whether a household is likely to adopt broadband while balancing other important household costs.”

The report defined low-and-moderate income census tracts as those where 50 percent of the population makes 80 percent or less of the area’s median income.

The report also found that mobile-only broadband use – subscribing to a mobile plan but not a fixed broadband plan – was much more common in areas with low relative broadband affordability. 

In census tracts with the lowest relative broadband affordability, Nair found more than 26 percent of all residents had only a mobile connection. That’s compared to about 6 percent in tracts where broadband was more affordable. Nationally, among households with some kind of broadband connection, about 12 percent were mobile-only as of 2023, according to the Census Bureau.

“Exclusive reliance on a mobile phone can often limit low- and moderate income individuals from reliably accessing vital services and opportunities for economic and professional advancement,” Nair wrote. “Mobile connections typically come with data caps, slower speeds, and less reliable service, making it difficult to complete tasks like applying for jobs, accessing remote education, attending telehealth appointments, or using online banking and financial tools.”

The report examined specific cities as case studies. In New York, it found high-speed infrastructure was often available, but prices were high enough that residents of the Bronx and Brooklyn – boroughs with the lowest relative affordability – were less likely to subscribe. 

In Bridgeport, Connecticut, the report found there was no modern broadband infrastructure in low-and-moderate income areas in 2022, leading low-and-moderate income area residents to spend 2.53 percent of their median income on DSL with speeds of 14 megabits per second (Mbps) download and 5 Mbps upload, compared to much faster and less burdensome plans in higher income areas. 

The state has since awarded grant funding for broadband expansion in the city.

“In many places, particularly low-and-moderate income metropolitan neighborhoods, broadband affordability is the final barrier to broadband adoption,” the report read. “This means that interventions that bring down the cost of broadband for low-and-moderate income families can have compounding social and economic returns to low-and-moderate income households and communities.”

The Affordable Connectivity Program, which provided 23 million low-income households a $30 monthly internet discount, ran out of money in May 2024. Commenters have been urging lawmakers to increase the FCC’s low-income broadband subsidy, now at $9.25 per month, to line up more closely with typical plans as they modernize the decades-old funding mechanism.

The bank's findings were “a fixable problem if we stop spending billions every year on deployment and instead switch to targeted vouchers to low-income households,” Joe Kane, head of broadband policy at the Information Technology and Information Foundation, said Friday in a post on X.

The group and others have been advocating to spend on affordability programs any leftover funds from Commerce's $42.45 billion broadband expansion effort. The department has indicated it's not eager to see much of that spent, and state broadband offices aren't yet clear on whether they'll ultimately see that cash.

The New York Fed’s report was limited to 38 major cities. The bank said price data in rural areas was more limited.

BroadbandNow recently did a similar study in rural areas. The group found that many rural Americans, while they were physically served by infrastructure, didn’t have access to plans below $60 per month.

That has in part to do with the challenging geographies of rural areas, BroadbandNow wrote at the time. Fewer people living farther away from each other makes it more expensive to deploy infrastructure and harder for meaningful competition to arise.