Amid high inflation trends, broadband prices have declined over the years

It’s no secret that the U.S. has experienced high inflation rates since the COVID-19 pandemic. In June 2022, it reached a 20-year peak at 9.1%. While inflation has decreased since then, many consumers have still been hit hard by rising prices for goods and services.

Interestingly enough, broadband has proved itself an outlier in these trends. Analyses have shown that pricing has declined even while other prices have increased.

Broadband prices lag behind inflation

According to USTelecom’s 2023 Broadband Pricing Index report, broadband prices for the most popular and fastest broadband internet services continue to decline, even as speed tiers increase.

As noted in the report, “This is in contrast to what consumers and their wallets are typically experiencing across the board with other goods and services.”

The report compares two categories of broadband prices:

• BPI-Consumer Choice – Compares providers’ most popular speed tier of broadband service in a given year to their most comparable 2023 service.
• BPI-Speed – Compares providers’ fastest speed tier option in a given year to the comparable plan in 2023.

The report also compares prices over two time intervals, 2022 to 2023 and 2015 to 2023.

Broadband pricing declines across both time intervals

From 2022 to 2023, USTelecom’s report notes an 18.1% decline in the price of providers’ most popular speed tier and a 6.5% decline in the price of providers’ fastest speed tier.

The report notably states that even without factoring in inflation, broadband prices still lag behind the rising cost of overall consumer goods and services from March 2022 to March 2023.

We can see even larger price declines from 2015 to 2023, with prices of providers’ most popular plans decreasing by almost 55% and prices of providers’ fastest speed tiers dropping by almost 56%, factoring in inflation.

In an eight-year comparison of the consumer price index (CPI) for essential goods and services (health insurance, car insurance, rent, college tuition and food), broadband prices in the two categories are significantly reduced.

Study shows a contrasting trend

A recent Technology Policy Institute (TPI) report of 2024 broadband prices is worth mentioning due to contrasting conclusions from analyses of the Federal Communications Commission’s (FCC) Urban Rate Survey (URS), the U.S. Census Bureau of Labor Statistics (BLS) and the BLS Consumer Expenditures Survey (CES).

The TPI notes that internet service prices have historically risen more slowly than inflation. When overall inflation reached 9.1% in 2022, internet prices only increased by 2.6%.

However, the TPI’s report illustrates that the internet price index increased by approximately 7.8% from June 2022 to June 2024 while overall inflation increased by 6.0%. This contrasts with the much more significant increases in the CPI compared to the internet price index in previous years.

Despite this recent trend over the last two years, the TPI notes that “one or two years does not necessarily mean a permanent change in a trend,” and that this trend isn’t all that surprising due to the significantly high overall inflation rate in the past.

The TPI also states that the internet price index could decrease in the future due to providers’ responses to the demise of the Affordable Connectivity Program (ACP).

ACP ends, providers introduce low-income plan alternatives

Internet affordability has always been at the forefront of digital divide discussions, especially since internet service is no longer a privilege, but a necessity in today’s digital society.

Various federal programs have been established to help consumers with the cost of internet, most notably the ACP. However, ACP funding ran out in early May 2024, leaving many without access to affordable internet options.

Since then, many internet service providers (ISPs) have compensated for the loss of the program by offering low-income internet plans of their own. Consumers must still be eligible for these plans but can generally have eligibility by participating in other federal assistance programs.

As the TPI stated, these programs could contribute to decreases in the internet price index.

Low-income internet options to lower your internet bill

Despite declining pricing trends, the cost of internet service is still too high for many consumers. According to Allconnect analysis of internet plans in the U.S., the average price of internet plans is around $90/mo., and that price has remained steady over the years.

Luckily, there are cheap internet options available from internet providers around the country. Explore low-income internet plans from top ISPs below:

• Verizon Forward: Discounted Verizon Home Internet services for qualifying customers. Get 300 Mbps for $20/mo.
• Spectrum Internet Assist: Eligible customers can receive 50 Mbps for $24.99/mo.
• Optimum Advantage Internet: Up to 50 Mbps for $14.99/mo.
• Xfinity Internet Essentials: Up to 50 Mbps for $9.95/mo., or up to 100 Mbps for $29.95/mo.
• Access from AT&T: Up to 100 Mbps for $30/mo.
• Mediacom Xtream Connect: Up to 100 Mbps for $28.99/mo.
• Cox Connect2Compete: 100 Mbps for $9.95/mo.

If you aren’t eligible for a low-income program from your ISP, there are still many plans available for less than $50/mo. Our cheap internet page outlines some of the best affordable internet plans from top providers like Xfinity and Verizon.

Providers also offer promotional discounts and perks that are worth exploring. For example, you could receive discounted internet for your first year or two and even get free subscriptions and equipment.

Explore the best internet deals of the month from top providers.

Before choosing an internet provider and plan, always consider the speed you need to ensure you can seamlessly enjoy your everyday internet activities.

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