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How Should Governments Tackle Broadband Affordability?

Broadband subscriptions are more expensive in the United States than in other countries, but addressing this supply-side imbalance doesn't necessarily mean that low-income families will be able to afford broadband.

High-speed Internet will continue to be too expensive for many households unless leaders recognize that broadband affordability requires different solutions depending on the context, a new article from Pew Charitable Trusts suggests.

The article cites research showing that Americans tend to pay more for broadband than citizens in other countries. Specifically, Americans pay a monthly bill that can range from $50 to $85, on average, which can be about two or three times more than what people who live in the European Union pay.

The article goes on to imply that supply-related solutions, such as greater competition in the broadband market, can help drive down average monthly costs for U.S. citizens.

"[B]roadband deployment in the U.S. has been market driven, with private-sector telephone and cable companies investing in infrastructure in areas that provide higher rates of return," the article explained. "This means they tend to focus on areas with denser and higher-income populations. As a result, many broadband markets are uncompetitive monopolies or duopolies, which leaves consumers with limited choice and higher prices."

But adjusting the supply side may not solve another broadband affordability problem — namely, that low-income households struggle to scrounge up the money needed for high-speed Internet.

Pew's own research indicates that 43 percent of Americans who make less than $30,000 a year don't have a broadband subscription. In stark contrast, only 8 percent of Americans who make more than $75,000 lack a broadband subscription.

Moreover, income is the main factor that predicts whether a household will have high-speed Internet.

"Further, although the research center found differences in broadband adoption by gender, race and ethnicity, and community type (urban, suburban and rural), income is the only category for which this difference is statistically significant," the article said.

This reality is why governments need to connect low-income households to programs, such as the Affordable Connectivity Program, that subsidizes the cost of broadband subscriptions and devices. Without an approach that specifically targets low-income families, the article argues that "we may ultimately deepen the digital divide."