Are U.S. broadband prices rising or falling?

There’s no question U.S. consumers are relying more heavily on broadband services in the wake of the Covid-19 pandemic. But are the costs for those services rising or falling? Well, the answer depends on who you ask and what metric you’re using to measure “cost.”

Last month, independent research firm BroadbandNow published a report which found broadband prices in the country fell significantly between the first quarter of 2016 and the fourth quarter of 2021. The study included data from around 50 U.S. broadband providers.

According to the report, the cost of higher-tier services of 500 Mbps or above fell the fastest, dropping 42% to an average of $59.22. Meanwhile the average price for service offering speeds of between 200-499 Mbps decreased 35% to $34.39 and the cost of speeds between 100-199 Mbps fell 33% to $32.35. The cost of a slower service providing speeds between 25-99 Mbps fell significantly less, but dropped 14% all the same to $8.80. Fiber tended to be cheaper than cable offerings across speed tiers.

However, a fresh study released by the U.N.’s International Telecommunication Union (ITU) this week determined fixed broadband prices in both the U.S. and across the world more generally rose in 2021 “after years of steady decline.” The methodology for the ITU’s report homed in on the cost of the cheapest standard, non-promotional fixed broadband plan offering at least 5 GB of high-speed data from the operator with the largest market share in each economy. It measured cost in terms of the price in U.S. dollars and as a percentage of gross national income (GNI).

Data from the report showed that in 2016, U.S. fixed broadband spending amounted to 0.82% of GNI and cost $38.10. In 2021, those figures were 1.01% and $54.42, respectively. On a global scale, relative prices for fixed broadband rose year on year from 2020 to 3.5% of GNI and $27. The GNI target set by the U.N. is 2%. Only 64 of the nearly 200 economies included in the report met that benchmark.

The ITU attributed declining affordability to a global economic downturn which was triggered by the pandemic.

While the U.S. still met the U.N.’s GNI target in 2021, the ITU noted “consumers in low-income countries must pay 28 times more, in relative terms, than those in high income economies” for their fixed broadband service. If prices continue to rise, it warned “the risk is that a significant portion of the world's population will be left behind: those who face a trade-off between purchasing internet access and meeting other basic needs.”