American Consumer Institute ConsumerGram: Are Broadband Prices Too High?

Recent findings by ACI suggest “affordability” depends on context

 WASHINGTON – Today the American Consumer Institute Center for Citizen Research released a ConsumerGram addressing the affordability of broadband Internet service.  They find that “affordability” for a given consumer depends not only on the price of the service, but also on different consumer preferences, income and, importantly, on increases in the value or functionality of the service.  The ConsumerGram highlights the frequently ignored fact that Internet charges reflect what consumers really care about – download speeds – and when taking broadband speed into account, consumer prices have been declining rapidly.  The ConsumerGram likens the change in price to getting three quarts of extra gasoline for the same gallon price and notes that:   “The daily cost of broadband compares favorably to the price of a large cup of coffee, the cost of doing a load of laundry or the daily cost of taking care of a pet dog.”  

While examining Bureau of Labor Statistics’ data on consumer prices, ACI found that while prices for most goods and services have increased the past five years, wireless communications services and Internet access services including electronic information services have actually declined.  And, if service quality and speeds are taken into consideration they have declined dramatically in real terms. 

“The FCC broadband plan correctly emphasizes the affordability to consumers of Internet access,” according to Larry Darby, senior fellow at the American Consumer Institute.  “That said, affordability is a complicated notion, not a buzzword, as some like to use it.  We are confident the Commission will agree and consider it in the right economic context.” 

The ConsumerGram was authored by Larry F. Darby, and is available in PDF by clicking here … affordability.