Survey: Rising Internet Bills Add to Consumer Frustration Amid Inflation

WASHINGTON, Oct. 23, 2024 – In an era where inflation is hitting consumers across the board, a new survey released Monday confirmed that internet prices remain a major point of frustration.

Written by Bobbi Dempsey for U.S. News & World Report, the survey polled 2,500 adults across the five most populous states – California, Texas, Florida, New York, and Pennsylvania – and found that the average internet bill had increased from $81 at sign-up to $98 today.

As internet costs continue to rise, many consumers called for government intervention. In fact, 76% of respondents expressed support for the U.S. government to implement price caps on what Internet Service Providers can charge for service. 

Additionally, 87% wanted Congress to reinstate the Affordable Connectivity Program, which helped 23 million low-income households with the cost of their monthly internet bill, before it ran out of full funding in May.

This sentiment was shared widely across states, with 53% of respondents struggling to manage their internet bills alongside rising grocery and utility costs. In Pennsylvania, for example, 29% of respondents reported cutting other expenses to afford their internet bill, while 56% said that the rising cost of household goods has made it harder to pay for internet services.

These first-hand consumer accounts stand in contrast with the position of industry trade groups like NCTA and USTelecom, which have pushed back on the narrative of rising internet costs in recent filings with the Federal Communications Commission.

In one filing, NCTA cited statistics from the FCC which found that broadband prices have declined by 19% in real, inflation-adjusted terms between 2009 and 2023. Similarly, USTelecom pointed to its analysis showing that the cost of the fastest internet speed tiers fell by 6.5% between 2022 and 2023.

Proponents of Fixed Wireless Access have said that it could serve as a more affordable alternative to traditional broadband, with companies like T-Mobile offering home internet plans starting at $50 per month. These FWA services are not universally available.

Still, a competing analysis from the Technology Policy Institute challenged industry assertions, pointing to more recent trends where internet prices have outpaced inflation for certain speed tiers. In particular, 50 Megabit per second (Mbps) and Gigabit plans saw price increases that exceeded inflation.

According to the TPI study, between June 2022 and June 2024, the Internet Price Index jumped by 7.8%, higher than the 6% rise in the overall Consumer Price Index during the same period.

The FCC’s 2024 Section 706 Report offered yet another angle. It found that while the nominal cost of internet services increased by 11% from 2009 to 2023, this was still significantly lower than the 37% rise in overall consumer prices during the same period. In real terms, after adjusting for inflation, the FCC reported that broadband prices had actually fallen by 19%.

This broader view aligns with the industry's perspective that broadband is not driving inflation. However, as FCC Chairwoman Jessica Rosenworcel has noted, affordability remains a challenge for too many households, especially those hit hardest by the rising cost of living.