Most People Probably Pay Less for Home Broadband Than We Think

It always is difficult to ascertain what “most” consumers actually are paying for home broadband service, partly because people choose a range of plans (faster speeds cost more); partly because many buy service only in a bundle, so there is not actual discrete and identifiable cost. 

In the U.S.  market that is a pronounced issue, as an estimated 70 percent of home broadband services are purchased as part of a bundle. So most of the market arguably buys home broadband in a way that obscures the actual cost. Only about 30 percent of buyers choose a service with a clear recurring price. 

Platform	Typical Speeds	Data Allowance	Monthly Price Range	Common Characteristics
Satellite	~25–30 Mbps download ~3–5 Mbps upload	10–20 GB/month (with some unlimited options at higher prices)	~$75–$85	Mainly chosen in rural or remote areas; higher latency and data caps are common; plans often come with extra fees for overage.
Cable TV	~100 Mbps (often scalable to 200+ Mbps in some markets)	Unlimited data (with occasional fair-use policies)	~$55–$65	The most popular option in urban/suburban areas; offers a good balance of speed and cost; bundle options with TV/phone are common.
Telco (Fiber/DSL)	~100–200 Mbps (fiber often delivers symmetrical speeds)	Typically unlimited or very high data limits	~$60–$70	Fiber plans (e.g., Verizon Fios, AT&T Fiber) are prized for reliability and speed; DSL remains common where fiber isn’t available.
Independent ISP	~50–150 Mbps	Varies, but often unlimited or high caps	~$50–$60	Smaller regional providers often offer competitive pricing and personalized service; plan details can be more tailored.
Fixed Wireless	~25–50 Mbps	Often moderate data caps (e.g., 250 GB/month) or unlimited with speed throttling	~$50–$60	Frequently used in rural or underserved areas; installation can be simpler and faster; speeds may vary with weather and line-of-sight conditions.
Mobile Broadband	Varies (commonly 10–30 Mbps when used as a home hotspot)	Often included as part of an unlimited smartphone plan or separate data allotment	~$55–$65	Purchased as a hotspot or integrated into a mobile plan; flexibility for on-the-go usage, but performance depends on network congestion and coverage.

And estimates vary dramatically when bundled service costs are considered. Where the estimated cost of a cable TV stand-alone service might be between $55 and $65 a month for 100 Mbps service, that same service might “cost” only about $30 to $40 a month when purchased as part of a bundle. 

Platform	Estimated Broadband Cost Portion	Notes
Cable TV	~$30–$40/month	Cable bundles often offer broadband at a discounted rate compared to standalone options, as the service is cross-subsidized by TV/phone components.
Telco (Fiber/DSL)	~$35–$45/month	Fiber bundles tend to emphasize higher speeds and reliability; the broadband portion may carry a slight premium compared to cable but still remains competitively priced in a bundle.
Fixed Wireless	~$30–$40/month	Often offered in rural or underserved regions, these bundles provide broadband at rates similar to cable bundles, though speed and data policies can vary.
Mobile Broadband	~$30–$40/month	When integrated into smartphone or home hotspot bundles, the effective broadband cost is often reduced as part of multi-line or data-centric deals.

Good Outcomes Beat Good Intentions: How Dumb Are We?

Good intentions clearly are not enough when designing policies to improve home broadband availability in underserved areas. In fact, since 2021, more than three years after its passage, the U.S. Broadband Equity, Access, and Deployment (BEAD) program has yet to install a single new connection.  

It seems we were determined to make the perfect the enemy of the good, preventing construction until we mostly were certain our maps were accurate. A rival approach would have proceeded on the assumption that residents and service providers pretty much know where they have facilities and where they do not; where an upgrade can be conducted fast and easily, and where it cannot. 

And perhaps (despite the clear industry participant interests that always seem to influence our decisions) we should not have insisted on the “fastest speed” platforms. Maybe we’d have prioritized “good enough” connections that could be supplied really fast and enabled the outcomes we were looking for (getting the unconnected connected; getting the underserved facilities that do not impede their use of internet apps). 

This is not, to use the phrase, “rocket science.” We have known for many decades that “good enough” home broadband can be supplied fast, and affordably, if we use satellite (geostationary or low earth orbit, but particularly now LEO) or wireless to enable the connections. 

To those who say we need to supply fiber to the home, some of us might argue the evidence suggests relatively-lower speed (such as 100 Mbps downstream) connections supply all the measurable upside we seek, for homework, shopping, telework. The touted gigabit-per-second or multi-gigabit-per-second connections are fine, but there is very little evidence consumers can even use that much bandwidth. 

Study/Source	Key Findings
Distinguishing Bandwidth and Latency in Households' Willingness to Pay for Broadband Internet Speed (2017)	Consumers value increasing bandwidth from 10 to 25 Mbps at about $24 per month, but the additional value of increasing from 100 Mbps to 1 Gbps is only $19. This suggests diminishing returns for speeds beyond 100 Mbps.
Are you overpaying for internet speeds you don't need? (2025)	Research indicates that many Australians are overspending on high-speed internet connections they don't need. Most households can manage well with a 50 Mbps plan unless they engage in high-bandwidth tasks like 4K streaming or online gaming.
Simple broadband mistake costing 9.5 million households up to £113 extra a year (2024)	Millions of UK households are overpaying for broadband by purchasing higher speeds than necessary. Smaller households often need speeds up to 15 Mbps but pay for over 150 Mbps, wasting £113 annually.
ITIF (2023)	- US broadband speeds outpace everyday demands - Only 9.1% of households choose to adopt 250/25 Mbps speeds when available - Clear inflection point past 100 Mbps where consumers no longer see value in higher speeds
ITIF (2020)	- Average existing connections comfortably handle more than typical applications require - A household with 5 people streaming 4K video simultaneously only needs 2/3 of current average tested speed - Research shows reaching a critical threshold of basic broadband penetration is more important for economic growth than faster speeds
European Research (2020)	- Full fiber networks are not worth the costs - Partial, not full end-to-end fiber-based broadband coverage entails the largest net benefits
US Broadband Data Analysis	- Compared to normal-speed broadband, faster broadband did not generate greater positive effects on employment
OpenVault Q3 2024 Report	- Average US household uses 564 Mbps downstream and 31 Mbps upstream - Speeds around 500 Mbps sufficient for most families
FCC Guidelines	- 100-500 Mbps is enough for 1-2 people to run videoconferencing, streaming, and online gaming simultaneously - 500-1000 Mbps suitable for 3 or more people with high bandwidth needs

We might all agree that, where it is feasible, fiber to home makes the most long-term sense. But we might also agree that where we want useful home broadband speeds, right now, everywhere, with performance that enables remote work, homework, online shopping and all other internet apps, then any platform delivering 100 Mbps (more for multi-user households, but likely not more than 500 Mbps even in the most-challenging use cases) will do the job, right now. 

Good intentions really are not enough. Good outcomes are what we seek. And that often means designing programs that we can implement fast, at lower cost, with wider impact, immediately or nearly so. “Better” platforms that cost more and are not built are hardly better.

Lower Home Broadband Speeds Correlate with Economic Growth; High Speeds Less So

Though the relationship between home broadband speed tends to be correlated with economic growth (the two tend to be found together), the relationship seems a bit non-linear. 

In other words, though the availability or non-availability of home broadband might be more correlated with economic growth, higher speeds seem less correlated. 

Title	Date	Publisher	Key Conclusions
Impact of broadband speed on economic outputs: An empirical study of OECD countries	2014	ideas.repec.org	The study found a positive contribution of broadband speed to economic outputs like GDP, but the effects were greater in lower-income OECD countries. It does not explicitly confirm linearity but suggests a positive relationship.
Is faster better? Quantifying the relationship between broadband speed and economic growth	2014	ScienceDirect	This study aimed to quantify the effect of higher broadband speeds (10 Mbps vs. 25 Mbps) on economic growth rates in U.S. counties. It found no significant economic payoff from the speed difference, suggesting that the relationship might not be linear or significant at higher speed thresholds.
The economic impact of mobile broadband speed	2014-2019 data	ScienceDirect	Using panel data from 116 countries, this study found that a 10% increase in mobile broadband speed was associated with a 0.2% increase in labor productivity with a one-year lag, but only in non-OECD and low-income countries. This indicates a potentially non-linear relationship, as effects were not robust across all countries.
Broadband Infrastructure and Economic Growth in Rural Areas	Not specified	ScienceDirect	The study suggested that the economic impact of broadband might be more significant at lower speeds (below 10 Mbps), with higher speeds showing small and statistically insignificant effects, implying a non-linear relationship.
Broadband׳s contribution to economic growth in rural areas: Moving towards a causal relationship	Not specified	ScienceDirect	Here, the focus was on adoption rather than speed per se, but it noted that economic benefits might plateau or show diminishing returns beyond a certain speed or adoption level, hinting at a non-linear relationship.
Socioeconomic benefits of high-speed broadband availability and service adoption: A survey	Not specified	ScienceDirect	The findings indicate that socioeconomic benefits might show diminishing returns as speed increases, suggesting the relationship between speed and economic outcomes is not strictly linear.

In fact, the correlation might be inverted as well: higher economic growth creates demand for home broadband. For that matter, there also are correlations between demand for home broadband and income; wealth and educational status. 

Study Title	Published	Publisher	Key Conclusions
"Exploring the Relationship between Broadband and Economic Growth"	2016	World Bank	Analyzed the bidirectional relationship between broadband and economic growth, suggesting that while broadband penetration can boost GDP, economic growth also increases demand for broadband services. documents.
"Broadband for all: charting a path to economic growth"	2014	Deloitte	Found a strong correlation between broadband availability and economic growth, indicating that as economies grow, there is an increased demand for higher broadband speeds and better infrastructure.
"The benefits and costs of broadband expansion"	2020	Brookings Institution	Discussed how economic growth leads to increased broadband adoption, as higher income levels and business expansion drive the need for improved digital connectivity.
"Mobile broadband drives economic development"	2019	Ericsson	Highlighted that economic development spurs demand for mobile broadband services, as growing economies require enhanced communication infrastructure to support business and consumer needs.
"Global Connectivity Index"	2023	Wikipedia	Indicated that nations with higher GDP per capita tend to have greater broadband penetration, suggesting that economic prosperity increases the demand for broadband services.