In fact, importantly, wireless broadband prices are dropping even without taking to account inflation. These price changes amount to a 6.6% and 9.0% annualized price cut for fixed and mobile broadband, respectively, providing convincing evidence rebutting assertions that broadband providers have significant market power. As the chart below displays, fixed and wireless broadband annualized prices changes are among the smallest on the CPI.
Price cuts indicate that broadband providers cannot charge higher prices without risking significant competitive backlash. The plunge in real broadband prices is consistent with the view Free State Foundation Director of Policy Studies Seth Cooper and I advanced in our January 2022 Perspectives from FSF Scholars that "overall competitive conditions in the broadband . . . market and across service sectors within the market remained equally strong or even improved." The evidence for robust broadband competition has only strengthened since publication of our Perspectives, with further substantial subscriber growth for innovative, low-price fixed wireless subscriptions and cable MVNO offerings.
Real broadband price decreases are also consistent with the benefits of infrastructure reforms implemented by the FCC over the past 5 years that removed substantial deployment barriers, such as the 2018 “Small Cell Order” and 2017 “IP Transition Order.” Removal of those barriers, combined with increasing competition, may have created an environment where provider cost reductions from infrastructure reforms are being returned to the consumer, at least in part, through real price cuts.
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