September 16, 2020
New research finds Americans are paying less in 2020 for broadband services that are significantly more capable than in 2015
Most popular tier of broadband service costs 20.2 percent less and is 15.7 percent faster in 2020 when compared to 2015
Declining prices and rising speeds deliver value to consumers; prices running counter to inflation
Access remains out of reach for too many Americans and obstacles to broadband adoption remain; urging Congress to commit resources necessary for universal connectivity
WASHINGTON, DC – USTelecom—The Broadband Association today released the 2020 Broadband Pricing Index (BPI), new research showing the decreasing cost and increasing value of broadband service in the United States between 2015-2020.
Using FCC and other public data, the BPI research assesses recent trends in residential fixed broadband pricing and reveals during the 2015-2020 period, there have been substantial reductions in price for both the most popular and highest-speed broadband internet services and significant improvements in overall broadband speeds.
The following statement can be attributed to Jonathan Spalter, president and CEO of USTelecom:
“Broadband companies invest between $70-80 billion each year in faster and more reliable U.S. broadband infrastructure, and this new report documents the degree to which this investment has produced broadband services that are not only increasingly fast, but also significantly less costly than even just five years ago. At a time when American consumers are now leading the world in internet traffic per user, this is measurable progress.”
Broadband Pricing Index (BPI) key findings:
The analysis makes price comparisons over time on two fronts: the most popular speed tiers and the highest speed tiers in 2015 and 2020.
- The most popular tier of broadband service in 2015 (BPI-Consumer Choice) is now priced 20.2 percent lower and offers 15.7 percent faster speeds in 2020 on an average subscriber-weighted basis.
- The highest speed offerings in 2015 (BPI-Speed) are now priced 37.7 percent lower and offer 27.7 percent faster speeds in 2020 on an average subscriber-weighted basis.
- Price reductions run counter to inflation, which has increased consumer costs for overall goods and services by 9.3 percent over the same five-year period analyzed in the report. When inflation is considered, the real price of the most popular tier of broadband service has dropped 28.1 percent since 2015; and the real price of the highest speed broadband service has dropped 43.9 percent.
- The combination of declining prices and rising speeds deliver greater value to consumers – as shown by a declining cost per megabit of connection speed (Mbps) of 37.9 percent for the most popular service and 56.1 percent for the highest speed service.
Reducing, but not eliminating obstacles to broadband adoption:
The data released today shows broadband is becoming more affordable – reducing, but certainly not eliminating, an obstacle to broadband adoption in the United States. Eighteen million Americans mostly in rural America remain unconnected and 30 percent of K-12 students do not have access to high-speed internet and/or the devices needed to learn from home. Additional work, understanding and data is needed around the vital issue of affordability and the BPI report seeks to contribute to that discourse.
Spalter added: “Everyone should have access to the power and promise of connectivity. This is an immediate national priority of the highest order. Washington can help put the digital divide and the homework gap in the rearview mirror with smart investments and proven policies. There is no one silver bullet to achieve universal connectivity, but programs exist to bridge this gap. They deserve more attention and innovation.”
Read USTelecom’s 2020 Broadband Pricing Index (BPI) research HERE.