Once a luxury, high-speed internet service has become a utility nearly as commonplace and essential in homes as power or water. As such, you can plan on fitting internet somewhere in your monthly budget, but just how much should you be allocating for it?
Shop internet providers on your terms
Compare internet providers with fast speeds and flexible data at the price you need. Choose your plan and set up service on Allconnect, for free.Shop internet providers
How much does internet cost per month?
The average starting price for internet is around $35, but most Americans are paying an average of $60/mo. for broadband. In some areas, internet plans can run much higher, up to $100 or more for select plans. Add equipment, fees, installation and all the other necessities and the monthly cost of internet can add up quick.
Monthly prices for top internet providers in the U.S.
*Pricing per month plus taxes for length of contract. Additional fees and terms may apply. Pricing varies by location and availability. All prices subject to change at any time. May or may not be available based on service address. Speeds may vary. As of 03/17/20.
What added fees do internet providers charge?
As with many services, the initial price you see for internet is not exactly what you can expect to pay. Fees will vary by provider, but some of the added costs that could inflate your bill include:
- Equipment rental – Modem and router rentals can add $10-$20/mo. to your internet bill. Some providers may include equipment at no extra cost, especially with their higher-tiered plans. Others may allow you to use your own compatible equipment to avoid paying the equipment rental fee.
- Installation/activation fees – Installation costs are thankfully one-time fees, but they can add $100 or more to the initial cost of internet. Many providers waive the installation fee for new customers, or offer self-installation at a reduced cost. In addition to the installation fee, an activation fee may also apply.
- FCC Universal Service Fund fee – The FCC charges internet providers a quarterly fee to help fund the expansion of broadband access to rural and low-income areas. Internet providers often pass these fees onto their customers. The fees typically aren’t much, around $5/mo. or less, but the exact fee will vary by provider.
- Late payment fee – Penalties for late payments vary state to state, but you could be charged a percent of your bill or a set fee of $20 or higher for late fees. And if your internet service is disconnected due to non-payment, you may be charged an additional fee to restore service.
- Cancelation fee – Terminating service before the end of your contract can levy high cancelation fees. Most internet providers prorate early termination fees depending on how many months are left on your contract and may charge hundreds of dollars for opting out of your service. Some providers, such as CenturyLink, Spectrum and Verizon do not require annual service agreements, so you don’t have to worry about early termination fees.
Even if your internet provider does not charge added monthly or one-time fees, regional and federal taxes will add to your monthly internet costs. Check out our guide to internet fees for more information about internet fees from specific providers.
Why does internet cost so much?
Internet providers aren’t charging high rates simply because they can. Around 94% of U.S. households have access to at least two internet providers, so pricing stays fairly competitive. There are a few reasons why internet service can get pricey.
One of the main reasons for internet prices to run high is the cost of equipment and installation in new service areas. Fiber-optic cables are expensive, so fiber-optic internet providers may have higher prices to recoup the costs of installing new lines. Same goes for satellite internet — those satellites aren’t cheap. This is also why DSL internet, which uses existing phone lines to deliver service, is commonly one of the cheaper internet options.
The plan you choose also has a lot to do with how much you pay for internet. More often than not the faster a plan is, the more it will cost. Cable and fiber-optic internet often give you the most speed choices, so these two service types will have some of the highest-priced plans, should you opt for faster speeds.
And of course, as with any home service, you can expect fees and hidden costs to factor into your bill as well. Equipment rental fees, installation costs, Wi-Fi fees and data overages, if applicable, can inflate your monthly payment. Unfortunately, these fees often aren’t clearly stated in the advertised price, so it pays to do a little research before committing to a new internet service.
So how much should I be paying for internet?
Asking how much you should pay for high-speed internet is like asking how much you should pay for TV service. There’s no precise answer because it all depends on what you need.
For a basic internet package, you can expect average monthly costs around $50 or less. More robust internet packages (faster speeds, whole-home Wi-Fi, high data allowances), will likely range from $60 to $100/mo.
How to avoid overpaying for internet service
Determining what your internet needs are and finding a plan that best fits them is the best way to keep from overpaying for internet. Additionally, it will also help you avoid getting stuck with a plan you’re not happy with.
Think about what you’ll be using the internet for
Knowing what you use the internet for or intend to use it for, and how many connected people/devices you have in your home will help you narrow down the speeds you need. Activities such as streaming in HD, gaming online and uploading to social media will require faster speeds, especially if you plan to connect multiple devices. Take our speed test to get an idea of what speeds you need.
Shop available speeds, then price
With your ideal speeds in mind, see what plans are available from internet providers in your area. Look for plans that best match the speeds you want and try to narrow down your options to a few that are close to those speeds. Avoid plans significantly slower than what you need, even if the price is enticing because it likely won’t be able to handle all your online activities.
If two or more internet providers offer the speeds you want, take a look at the price and features of each to determine which plan is best for you. Along with the monthly price, consider contract requirements, equipment fees, installation and other factors that could influence the overall cost.
Bundle or upgrade to a faster plan for the perks
The sticker price for bundles or faster internet plans may be a little higher, but what you get in return can make up for the extra cost. Providers such as AT&T and Cox offer monthly discounts for bundling your internet plan with qualifying TV service.
Some providers will waive equipment and installation fees with select plans. Choosing a faster plan may cost you more per month, but the total yearly costs could be about the same as a slower plan if you can avoid upfront installation costs and equipment fees.
Try to get a plan with a high data cap, or none at all
Data overages are something many of us don’t think about until we’ve unknowingly gone over the limit and got hit with a $50 fee. Many providers impose data caps, usually around 1 TB per month (which is actually a lot of data) but some may have much lower caps. Oftentimes, the data cap varies not just by provider, but also by plan.
If lots of HD and 4K streaming are in your future, you’ll likely want at least 1 TB of data per month, but an unlimited data plan would be even better. AT&T, Frontier, Spectrum, Verizon FiOS and Xfinity offer unlimited data options with select plans.
Check the fine print for added costs
Installation costs can add $100 or more to your upfront costs. Equipment rental fees may add $10 or more to your monthly bill. Contracts will lock you into service for a set amount of time, during which the internet price could go up. These are all things to consider when shopping for internet. Compare plan speeds and pricing, then take a closer look at the conditions of each plan to avoid overpaying for service.
Ways to lower your internet bill
If you’re stuck in a plan or like the plan you have but are looking for ways to save on your bill, there are a few ways you can cut monthly internet costs.
- Downgrade your plan – Could you reduce your internet speeds without sacrificing your favorite online activities? If so, it may be worth downgrading your internet plan to a slower, and cheaper, plan. Make sure you aren’t in a contract before attempting to change your service.
- Switch internet providers – Shop for a lower-priced plan from another provider. Many providers offer introductory pricing or other incentives, such as contract buyouts to help you save.
- Use your own equipment – You might be able to use your own modem and/or router to avoid monthly equipment rental fees. A good router can run $150 or more, but if your fees were $15/mo., it will pay for itself in 10 months.
- Watch your data usage – If your plan has a data cap, keep a keen eye on how much data you’ve used throughout the month. This is especially applicable for satellite internet users, who often have lower data caps compared to other connection types.
- Negotiate with your internet provider – Call your internet provider and see if you can get a lower rate. It won’t always get you a lower price, but it can’t hurt to ask. To help your cause, be firm in your request and come with knowledge about what other providers in your area are offering.
In summary, get a plan that fits your needs and cut costs where you can
Which internet providers are available in your area plays a major role in how much you pay for internet, but you have control over which plans you pick and the extra costs you have to pay.
Choose a plan that best fits your speed requirements, then cut costs where you can by using your own equipment, keeping an eye on your data and re-evaluating your plan when your contract is up.
Rely on our internet experts for more tips on how to save on your internet costs, and to shop for the right internet plan for your home.
Originally written on 5/19/2019. Last updated on 3/17/2020.