Consumer Reports Investigation into Broadband Finds Consumers Saddled with Confusing Bills, High Prices, and Lack of Competitive Choices

WASHINGTON, DC – Consumer Reports today announced new findings from a first-of-its-kind nationwide participatory broadband study conducted to better understand the true cost of broadband in the United States.

CR launched the Fight for Fair Internet project in 2021 with dozens of partner organizations across the country to collect and analyze consumer internet bills. Unlike previous research by organizations that looked at broadband pricing by drawing on data from publicly available sources such as internet service provider (ISP) websites, CR collected data directly from monthly internet bills sent to and paid by real consumers. 

The findings of this project uncovered the price consumers pay for internet service as well as the additional costs of broadband service, including package speed costs, equipment costs, data and usage costs, and more. These findings support what many consumer advocates have long argued: greater competition and choice leads to more affordable broadband options.

CR collected and analyzed over 22,000 bills from all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. These bills included more than 500 separate ISPs and various types of internet service, such as coaxial cable, fiber optic, satellite, fixed wireless, and DSL. While this is not a nationally representative study and is not predictive of the broadband market, it is one of the most ambitious efforts of its kind to understand how much consumers are paying at a moment in time. A snapshot at our findings are below: 

• Internet pricing can sometimes appear to be arbitrary; in several instances companies charged different prices for exactly the same service plans. 
• Overall, average pre-discount prices for internet service ranged from less than $40 to more than $100 a month. The median price of the 18,359 bills where we could clearly identify internet cost was $74.99.
• The average internet speeds consumers purchased varied dramatically, most ranging from 10 Mbps up to 1 Gigabit, or roughly 100 times faster.
• The bills we received show that prices can vary by market, especially when consumers have choice among providers.
  • Americans in markets where we received bills from at least three broadband competitors reported paying, on average, about $5 per month less for service than those in areas where we received bills from one or two providers, and reported prices were lower still as the number of local competitors increased.
• Many of the bills collected included add-on fees for extra services, such as “unlimited data allowances” or data overage fees with plans that have data caps. There can also be extra charges for equipment (router or modem rental fees).
• More than a dozen ISPs were found to charge company-imposed fees—also known as junk fees—under names such as “network enhancement fee,” “internet infrastructure fee,” “deregulated administration fee,” and “technology service fee.” They can surprise consumers when they appear on monthly bills, and can enable providers to raise prices without seeming to violate marketing or contractual price commitments. 

“CR launched this initiative to find out the true cost of internet service. While we expected some confusing bills, we were surprised to see how difficult it was for consumers to understand what they’re paying for and the frequency of hidden fees,” says Jonathan Schwantes, senior policy counsel at CR. “These findings should alarm policymakers and regulators about the lack of competition in the marketplace and the tactics providers deploy to increase profits.” 

A 2021 CR nationally representative broadband survey found that 43 percent of Americans who have broadband service said they were dissatisfied with the value they get for the money. Only 22 percent said they were “completely” or “very” satisfied with the value they get for the money.  In that same survey, nearly a quarter of Americans who have a broadband service in their home say it’s difficult to afford their monthly broadband costs. That percentage was higher for people of color.

CR has long advocated for greater competition and more transparency in the broadband marketplace. CR is supporting the Federal Communication Commission’s ongoing broadband label proceeding, which has a real chance to solve many of the problems uncovered by our research. A broadband label would clearly present pricing information, any additional fees (e.g. device rental fees), promotional discounts and length, and performance information (i.e., expected download and upload speeds).

To address the issues of broadband competition and data caps, CR is urging Congress to pass two important bills – the Community Broadband Act and the Uncap America Act.

The Community Broadband Act would boost competition by helping cities provide low-cost municipal broadband service to compete with the biggest providers, and make sure providers don’t game the system to keep competitors out of their markets. The Uncap America Act would require that data caps be used only for network management purposes, and direct the FCC to prohibit data caps in the fixed broadband market where they cannot be technically justified.