The question of broadband affordability is often clouded by misconceptions, with many discussions overlooking key data points regarding internet pricing and household spending.
Here's what the data actually reveals:
Slower Price Increases Compared to Inflation
- Internet service prices, as tracked by the Bureau of Labor Statistics (BLS) Consumer Price Index, have increased at a slower pace than overall prices. Since January 2010, internet service prices have increased 13%, while overall prices have increased 46%. This indicates that, when adjusted for inflation, internet service costs have effectively decreased by nearly 22%.
Low Household Spending on Internet Services
- On average, families spend around $76 per month on internet services, which constitutes less than 1% of their after-tax income. For perspective, this amount is less than half of what households typically spend on electricity each month.
Increased Access Among Low-Income Households
- Internet access among low-income families has grown notably in recent years. In 2019, only 61% of households earning under $25,000 annually had internet access at home. By 2023, this percentage had increased to 71%, as reported by the National Telecommunications and Information Administration (NTIA).
Reasons for Lack of Internet Access Are Primarily Non-Financial
- Among the lowest-income households without internet access, the primary reason is a lack of interest rather than cost. NTIA data shows that 59% of households earning less than $25,000 cited lack of interest as the main reason they do not have internet at home, while only 18% pointed to cost as the main factor.
The bottom line: The data shows that broadband services are affordable for most households, with cost being a secondary barrier for low-income families. Instead, other factors, such as perceived relevance and utility, play a more significant role in the decision to forego internet access.
