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Survey: Broadband Prices Decreased During Pandemic

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(Image credit: Tim Robberts/Getty Images)

Telecom providers say broadband costs have been going down while value has been increasing during the pandemic, according to a new study just released by USTelecom.

The study comes as Congress tries to hammer out a compromise infrastructure package, one that currently contains billions for broadband on the assumption that if the price is too high or the speed is too slow or competition is lacking, government money might be needed to overbuild faster, cheaper networks.

Drawing on public data, including from the FCC, the latest Broadband Pricing Index (BPI) study shows "continued and substantial price reductions for the most popular and highest-speed broadband internet services," according to USTelecom.

"This research demonstrates the significant and continuing downward trend in broadband prices that is causing affordability as a barrier to broadband adoption to recede," USTelecom said.

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That price was decreasing despite unprecedented demand for broadband during the pandemic and increased pricing for consumer goods.

“These findings are relevant to the current debate surrounding broadband affordability," said USTelecom president Jonathan Spalter. "In a year when everything seemed to be going up...the price of broadband went in the opposite direction. This continues a years-long story of declining prices, not to mention accelerating speeds that have unlocked a range of broadband-fueled innovations. The truth is: more Americans have cheaper and flat-out better broadband service choices than they did one year ago.”

The study compared prices in two ways, the prices of the most popular speed tiers and the prices of the highest speed tiers, and found substantial price reductions on both counts, with prices for the most popular tier down 7.5% year over year (YOY)--9.3% when adjusted for inflation--and prices for the highest speed service down 2.3% YOY, 4.2% adjusted for inflation.

At the same time, the cost of goods and services during the pandemic was up 1.9%.

"Today’s US Telecom report is the latest in a spate of flawed and deeply conflicted research from internet service providers on the price of their own service," said Joshua Stager, deputy director of broadband and competition policy at New America’s Open Technology Institute. "It is curious that US Telecom would rely on third-party surveys rather than get the pricing data directly from its ISP members. If internet service is as affordable as US Telecom claims, ISPs could prove it by disclosing their pricing data to the FCC....OTI’s research makes clear that the cost of broadband in the United States is too often opaque, misleading, and unaffordable."