Many Power Users Among Low-Income "Home Broadband" Households

Life often is more complicated and surprising than any theory can predict. Consider home broadband consumer behavior. Consider a recent analysis by Openvault, of “low-income” home broadband households using subsidy programs.

“Broadband usage patterns of participants in the FCC’s Affordable Connectivity Program are significantly exceeding those of the broader connected population,” according to Openvault. 

Launched in January 2022, the ACP provides low-income households with a $30 per month ($75 for tribal households) subsidy that can be applied towards a monthly internet subscription. 

One might guess that low-income households would sign up for a value package, perhaps often a 100-Mbps connection that might, with the $30 subsidy, be almost--or actually--free. That might also suggest that total household consumption would be lower than usual, simply because speed tends to correlate with total data consumption. 

source: Openvault-+

But Openvault suggests that often is not the case. ACP participants’ median usage of 499.3 gigabytes per month is almost 60 percent higher than the median of 313.9 GB per month for all subscribers, Openvault says.

ACP participants are 36 percent more likely to be power users of 1 TB or more, and 52 percent more likely to be super power users of 2 TB or more, Openvault notes. Also, ACP participants’ average usage of 654 GB per month is 33.3 percent higher than the average of 490.7 GB for all subscribers.

There is a fairly simple reason for such data. The ACP can be used by college students. Younger users and college students tend to be heavier consumers of internet data. Eligible participants include people who:

• Received a Federal Pell Grant during the current award year;

• Meets the eligibility criteria for a participating provider's existing low-income internet program;

• Participates in one of these assistance programs:

• Free and Reduced-Price School Lunch Program or School Breakfast Program, including at U.S. Department of Agriculture (USDA) Community Eligibility Provision schools.

• SNAP

• Medicaid

• Housing Choice Voucher (HCV) Program (Section 8 Vouchers)

• Project-Based Rental Assistance (PBRA)/202/811

• Public Housing 

• Supplemental Security Income (SSI)

• WIC

• Veterans Pension or Survivor Benefits

• or Lifeline;

• Participates in one of these assistance programs and lives on Qualifying Tribal lands:

• Bureau of Indian Affairs General Assistance 

• Tribal TANF

• Food Distribution Program on Indian Reservations

• Tribal Head Start (income based)

• Affordable Housing Programs for American Indians, Alaska Natives or Native Hawaiians

That list includes some people and households most people would consider “low income.” But it also includes college students who are only temporarily “low income.” They also are more likely to be “power users.” 

The data do not preclude, however, the notion that many low-income households might be using the subsidies to buy higher-speed service, whether those customers are students, the eldersly or others with low income.