A new study from U.S. News & World Report examines the speeds and prices Americans are getting from their internet service providers (ISPS), delving into the impact that rising internet costs have had on households’ ability to pay other essential bills.
In August U.S. News & World Report conducted a survey involving over 3,500 U.S. adults who subscribe to home internet services. The survey group included subscribers to various internet service providers (ISPs), but the top five ISPs used by respondents were Comcast’s Xfinity, Spectrum, AT&T, Verizon and T-Mobile.
Around one-third of respondents (36%) reported download speeds of 100 Mbps or less. Although the Federal Communications Commission (FCC) defines broadband capability as access to download speeds of at least 25 Mbps, 8% of respondents reported download speeds less than that. This indicates that nearly one in 10 households “doesn’t actually have broadband internet service,” the report said.
About half (53%) of respondents said when they signed up with their current ISP, their internet bill was between $20 and $60 per month. Around the same number (48%) said that today, that has gone up to between $41 and $80 per month for service from the same ISP.
“This may help explain why almost one-third of Americans without broadband say cost is the obstacle standing in their way,” the report noted, adding affordable service is “particularly scarce” in rural and low-income areas.
Although inflation peaked in June 2022, its impact on internet costs has lingered.
The report said the price of internet service didn’t necessarily jump as high as other essential costs like grocery bills. But more than a third (39%) of the survey’s respondents said they have had to “cut personal expenses in order to pay their monthly internet bill.”
Over half (61%) said inflation’s impact on the cost of household items, such as groceries, has made it difficult to pay their monthly internet bill.
“Savvy consumers can shop around and compare ISP costs and services, but many will discover that budget-friendly internet providers can be tough to find, especially in certain parts of the country,” said the report.
Internet affordability is by no means an unspoken issue in the broadband sector. Industry groups have rallied behind programs such as the Affordable Connectivity Program (ACP), which provides “eligible” Americans $30 per household for internet connectivity.
However, nearly two years after the program was started, some have gauged that half of all households eligible for the ACP internet subsidy are still unaware of the benefit. Adding to concern, the $14 billion ACP has been projected to run out of money sometime next year unless Congress allocates more funding for the program.
Former FCC lawyer Diane Holland previously told Fierce that has created a “double-edged sword”—as the FCC works to get the word out about ACP, more eligible households will sign up for the subsidy.
“And that is going to deplete the funding even more quickly than it's currently being depleted,” said Holland.
These affordability questions will persist as internet has “gone from a luxury to a necessity,” said the U.S. News & World Report, with 85% of Americans going online every day.
Despite the majority of the survey’s respondents struggling to pay their internet bills, they are still willing to pay more for higher speeds. More than half (62%) of respondents would pay more for faster internet speeds, with 45% willing to pay $5 to $10 more a month and 17% willing to pay $11 to $20 more per month.