USTelecom—The Broadband Association Wednesday released the 2020 Broadband Pricing Index (BPI), new research the organization says shows the decreasing cost and increasing value of broadband service in the United States between 2015-2020.
Using FCC and other public data, the BPI research assesses recent trends in residential fixed broadband pricing and reveals during the 2015-2020 period, there have been substantial reductions in price for both the most popular and highest-speed broadband internet services and significant improvements in overall broadband speeds.
“Broadband companies invest between $70-80 billion each year in faster and more reliable U.S. broadband infrastructure, and this new report documents the degree to which this investment has produced broadband services that are not only increasingly fast, but also significantly less costly than even just five years ago,” said USTelecom President/CEO Jonathan Spalter. “At a time when American consumers are now leading the world in internet traffic per user, this is measurable progress.”
However, the report acknowledges there’s much more work to do. The data shows broadband is becoming more affordable – reducing, but certainly not eliminating, an obstacle to broadband adoption. Eighteen million Americans mostly in rural America remain unconnected and 30 percent of K-12 students do not have access to high-speed internet and/or the devices needed to learn from home. Additional effort, understanding and data is needed around the issue of affordability and the BPI report seeks to contribute to that discourse, according to USTelecom.
Spalter added: “Everyone should have access to the power and promise of connectivity. This is an immediate national priority of the highest order. Washington can help put the digital divide and the homework gap in the rearview mirror with smart investments and proven policies. There is no one silver bullet to achieve universal connectivity, but programs exist to bridge this gap. They deserve more attention and innovation.”
Broadband Pricing Index (BPI) key findings:
The analysis makes price comparisons over time on two fronts: the most popular speed tiers and the highest speed tiers in 2015 and 2020.
- The most popular tier of broadband service in 2015 (BPI-Consumer Choice) is now priced 20.2 percent lower and offers 15.7 percent faster speeds in 2020 on an average subscriber-weighted basis.
- The highest speed offerings in 2015 (BPI-Speed) are now priced 37.7 percent lower and offer 27.7 percent faster speeds in 2020 on an average subscriber-weighted basis.
- Price reductions run counter to inflation, which has increased consumer costs for overall goods and services by 9.3 percent over the same five-year period analyzed in the report. When inflation is considered, the real price of the most popular tier of broadband service has dropped 28.1 percent since 2015; and the real price of the highest speed broadband service has dropped 43.9 percent.
- The combination of declining prices and rising speeds deliver greater value to consumers – as shown by a declining cost per megabit of connection speed (Mbps) of 37.9 percent for the most popular service and 56.1 percent for the highest speed service.
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