Rural residents pay more for Internet access, but federal dollars might make the service more affordable

Rural residents pay more for Internet access. (BroadbandNow graph
from WWAMI Rural Health Research Center via The Daily Yonder)

Part of the Infrastructure Investment and Jobs Act includes a goal of spending billions of dollars to make broadband available for every American. But even if broadband is available "everywhere," will everyone be able to afford it?

State broadband offices are gaining access to their "first chunk of the $42.5 billion that will be doled out over the next five-plus years as part of the Infrastructure Act's Broadband Equity Access and Deployment program," reports Brian Whitacre of The Daily Yonder. When it comes to access, "Rural advocates have high hopes for the BEAD program, [but] there is also a requirement for states to describe how their plan to award funds will address broadband affordability."

Rural residents need access and affordability. "The most recent data show dramatic rural–urban gaps in broadband access and adoption (percent of households signing up for broadband)," Whitacre reports. "It's widely recognized that affordability plays a large role in why households remain offline. But because there is no federally collected data on the broadband price that includes both rural and urban areas, very few studies have been able to quantify the price differences across these geographies."

BroadbandNow (an independent broadband availability website) has uncovered that information. The company "went through the painstaking process of gathering pricing data from over 4,000 terrestrial broadband providers in late 2020 and compiled them into a Zip code-level database that is publicly available," Whitacre reports. 

The data show that "in late 2020, the average monthly cost of a . . . broadband connection was nearly $13 higher in rural Zip codes. In many ways, this is expected. After all, rural areas tend to have dramatically fewer options for connecting – and there is a good argument that this 'competition gap' is driving higher prices," Whitacre writes. "But the BroadbandNow data also allows us to break out urban vs. rural prices based on the number of providers available in a Zip code."

While BroadbandNow data illustrates the competition gap, BEADS affordability requirements will help mitigate those expenses for rural families. Whitacre writes, "States are generally going to be spending [BEAD] money in locations without another viable high-speed option, which by itself should decrease consumer costs in those locations. . . Beyond this, all BEAD funding recipients are required to "offer at least one low-cost broadband service option for eligible subscribers." Many states are interpreting this as offering an option for $30 per month or less, so that it would be fully covered by the Affordable Connectivity Program monthly subsidy."