Home broadband customers do not like price increases anymore than do mobile subscribers or video subscription customers. But, by definition, high inflation rates mean a general rise in virtually all prices.
On the other hand, U.S. high-speed home broadband prices arguably have declined over the past couple of decades, especially in relation to prices of other products.
According to BroadbandNow, U.S. home prices “have fallen since 2016, with the highest speed plans falling the most.”
The average price decreased by $8.80 or 14% for 25 – 99 Mbps. The average price decreased by $32.35 or 33% for 100 – 199 Mbps. The average price decreased by $34.39 or 35% for 200 – 499 Mbps. The average price decreased by $59.22 or 42% for 500+ Mbps, according to BroadbandNow analysis. Other studies show the same trend.
According to the Blandin Foundation, prices dropped between 16 percent and 38 percent between 2015 and 2020, for example.
Data from the U.S. Bureau of Labor Statistics shows prices for health insurance, for example, rose 43 percent between 2015 and 2021 while home broadband prices dropped 26 percent.
sources: BLS, High Speed Options formatting
The same downward trend was seen in Australia home broadband markets.
sources: BLS data, NCTA formatting
ISPs sometimes argue their business models are unsustainable if capital investment keeps rising and average revenue per account keeps dropping.
There is a “simple” if difficult solution: raise prices to cover costs. As difficult as that is in competitive markets, there is no other long-term and sustainable solution. Subsidies can help, but only so much. Revenue has to be greater than cost.
Consumers will not like it, but retail prices have to rise.
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