According to a study from the University of Wisconsin EDA Center, monthly expenditures on broadband access in Wisconsin plateaued in 2016, which could impact policy decisions for broadband expansion moving forward.
In the Great Lakes region, monthly personal consumption expenditures on internet per household went through a period of acceleration from 2006 to 2016 but has since plateaued.
For example, the average household expenditure on internet in Wisconsin in 1997 was $2.33 per month and rose to $29.38 per month in 2021. Most of that growth happened between 2006 and 2016 when internet expenditures increased from $8.93 per month to $26.26 per month. This leveling off in average household spending on internet services could be a sign of little change in broadband adoption rates in more recent years.
If broadband adoption rates hold steady, big leaps in state internet personal consumption expenditures are not likely.
Other findings include:
- Higher income households pay more for monthly internet subscriptions.
- There is no clear pattern of rural or urban households paying more for their internet services.
- Rural households tend to have a greater difficulty paying for broadband and report higher levels of disruption to their current internet service.
- The typical household is willing to pay (WTP) $77.25 to move from no internet services to 25 Mbps and $124.99 for 50 Mbps and $154.24 for 1200 Mbps but increases in willingness to pay plateaus for higher speeds.
- Lower income households (<$35,000) are willing to pay $46.72 for 25 Mbps services whereas higher income households (>$150,000) are willing to pay $165.76 for 25 Mbps services.
- Households are willing to pay $17.94 per month on average for greater reliability (fewer outages).
- The lowest income households (<$35,000) are willing to pay $10.85 and higher income households (>$150,000) are willing to pay $38.48 for more reliable services.
While reliability has value to consumers, speed appears to impact their WTP most. Rural residents want broadband. In the survey choice experiment, rural residents chose to not purchase internet services less frequently than urban residents. Rural residents experience a 22% greater loss in utility (satisfaction/ happiness) when they are forced out of the market for broadband.
The study was authored by McKenzie Boyce, Steven Deller and Kristin Runge. Read the full study results here.
