Broadband prices drop as speeds and competition climb – studyBroadband prices drop as speeds and competition climb – study

US broadband pricing has dropped in 2024 across both sub-1 Gbit/s speed tiers as well as 1-Gig options thanks in part to rising competition across the sector, USTelecom found in its fifth-annual Broadband Pricing Index (BPI).

Pricing in the BPI-Speed category (speeds of 100 Mbit/s to 940 Mbit/s), representing about 55.4% of tiers purchased, saw "real" (adjusted for inflation) pricing drop 9.4% year-over-year, and nearly 60% since 2015.

Pricing in the report's new BPI-Gigabit category (speeds ranging from 940 Mbit/s to 1 Gbit/s) saw real pricing drop by 9.4%.

(Source: USTelecom, Broadband Pricing Index 2024)

The BPI, authored by Arthur Menko, the founder of Telcodata and Business Planning, said the two categories in the report represent more than 80% of US broadband customers. Approximately 55.4% select service in the BPI-Speed range compared to 25.1% electing gigabit service.

Downward pricing could spell a troubling trend for cable operators now that some of them, including Comcast, view average revenue per unit (ARPU) growth as the key metric of their broadband businesses.

The study found that broadband pricing continued to lag overall inflation over the 2015 to 2024 period. While the cost of consumer goods and services climbed by 32.2%, according to the Consumer Price Index for All Urban Consumers (CPI-U), BPI-Speed prices declined by 41%.

The trends identified by the latest BPI enter the picture amid a surge in US broadband competition, particularly from a relatively lower-priced fixed wireless access (FWA) sector that has been enjoying the bulk of subscriber growth in recent quarters.

"An intensely competitive broadband marketplace is delivering big-time for American consumers and our innovation economy," USTelecom President and CEO Jonathan Spalter said in a statement. "This competition and broadband companies' investment in modern infrastructure is driving powerful efficiencies and lower prices with benefits that extend from the global reach of U.S. competitiveness to the hyper-local reality of household budget."

Rising speeds

The study also found that broadband speeds (likely due to the expansion of fiber networks and cable network upgrades) are also on the uptick, causing a reduction in the cost per megabit.

The latest BPI found that weighted downstream speeds reached about 301 Mbit/s in 2024, up 113.5% from the 141 Mbit/s seen in 2015. Additionally, weighted upstream speeds in 2024 hit 96 Mbit/s, up 88.5% from 51 Mbit/s in 2015.

The BPI-Speed portion of the study uses FCC and other public data to assess US residential fixed broadband pricing across a selection of cable operators (Altice USA, Cable One, Charter Communications, Comcast, Cox Communications, Mediacom Communications and WideOpenWest) and telcos (AT&T, Consolidated Communications, Frontier Communications, Lumen, TDS, Verizon and Windstream) that represent more than 90% of all terrestrial broadband services sold in the US.

The new BPI-Gigabit index also relies in part on FCC data and likewise defines peer providers as the 14 operators representing 90% of fixed broadband subscribers. The criteria for that category includes symmetrical 1-Gig speeds or 940 Mbit/s downstream by 880 Mbit/s upstream and unlimited data usage.