Here are the key takeaways from a recent Federal Reserve Bank of NY study…
- This study introduces a new community-level measure of broadband affordability that considers local median monthly household income and costs of living relative to local costs for broadband.
- Low- and moderate-income communities pay a notably higher share of their income for broadband— 2.43% compared to 0.51% in wealthier areas—exceeding the FCC’s 2% affordability benchmark.
- In cities where broadband is less affordable, households are more likely to use slower or lower-quality plans due to cost or limited infrastructure. In areas with the least affordable broadband, 26.7% of households rely solely on mobile devices, limiting access to jobs, financial services, and other key resources.
- Data on broadband pricing is still scarce in small and rural areas, limiting the ability for businesses, government, and community anchor institutions to understand the economic costs and benefits of broadband infrastructure. This underscores the need for localized pricing data to support digital access research.
All very interesting, but I’m always a sucker for an equation to determine a community-level measure of broadband affordability. And this report has that too:
The numerator is the average price for the cheapest internet service plans offered by providers in the geography, and the denominator is the median monthly household income for the geography. This is multiplied by 100 to create a percentage measure of Relative Broadband Affordability experienced by households in a given geography. Relative Broadband Affordability is helpful for understanding the ability of households within a census tract or census place to pay for broadband relative to their median household income. However, to understand just how affordable broadband is to a community, it is important to compare it to other communities within their city.
Turns out affordability impacts the decision to go for mobile-only connection, as the graph below indicates.
