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Broadband Prices Mostly Stable Last Year

Broadband Prices Mostly Stable Last Year

I know I speak for everyone, without exception, when I say how exciting this time of year is, since it’s when the FCC releases its annual Urban Rate Survey (URS).1 Let’s unwrap this new toy and see what’s inside.

The data show that overall, prices, which here are the sum of monthly charges, surcharges, and other mandatory charges, remained fairly stable.

These estimates are consistent with the Bureau of Labor Statistics (BLS) monthly internet services price index, and lower than the overall rate of inflation. The Figure below shows the same information as above plus the BLS Internet price index and the overall Consumer Price Index (CPI-U), all set at 2018=100 to make it easier to compare. Note that the URS is a survey of representative available plans and is not necessarily representative of the plans to which consumers choose to subscribe, while the BLS price indices reflect changes in prices of a changing representative basket of goods, so do take into account consumer preferences.

The figures below show the median prices, as well as the 25th and 75th percentile of prices for plans offering download speeds of 25, 50, 100, and 1000 Mbps. The figures show stable or decreasing prices except for an increase in the 25 Mbps group.2

The data suggest that prices for internet access have remained, overall, stable in nominal terms and have fallen in real terms relative to the prices of other goods and services.

Endnotes

1 The URS, which included about 12,000 rates in the 2023 survey, is a tool the FCC uses to administer the universal service program. Companies that receive subsidies from the Universal Service Fund must set "reasonably comparable rates to those in urban areas." The FCC uses the URS data to define "reasonably comparable." Because the FCC attempts to make the survey representative of available plans by weighting each plan appropriately, the data are also useful for examining prices and price changes.

Note that the years in the figures here correspond to the report with the following year in the title. For example, the data for 2022 in this post are from the 2023 report. The FCC titles the report for the following year because that is the year the benchmark rates will apply.

2 To increase the number of plans in each group, I include plans offering 20 percent more or less than the specified range. So, for example, the 25 Mbps group includes plans offering 20 - 30 Mbps.

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