Nov 19, 2021 - Technology

Broadband subscriber growth stalls after pandemic gains

Data: S&P Global; Chart: Danielle Alberti/Axios

A new report from Kagan, the media research unit of S&P Global, shows that broadband subscriber growth has "cooled significantly in the third quarter," stalling in growth for the first time in three years.

Why it matters: The decline can be attributed to "a difficult comparison with the booming gains of 2020," the report says.

  • Ian Olgeirson, a research director at Kagan, says that an increase in the adoption of 5G alternatives, such as mobile hotspots and fixed wireless plans, may have also contributed to the slowed growth of broadband subscriptions.

Be smart: While broadband subscriber growth has slowed, each household's broadband use is expected to stay high.

  • Earlier this year, experts said they expected increased broadband usage to continue after the pandemic.
  • Olgeirson says remote work and school forced households to prioritize broadband connectivity during the pandemic, and "subscriptions surged during that period."

What to watch: The Federal Communications Commission in May launched a program to help low-income households pay for internet service by offering a $50 a month discount to their monthly broadband bills.

  • The Emergency Broadband Benefit program has enrolled more than 7.6 million households so far. But it's not clear if those households previously had internet service or if the program is paying for new connections.
  • The data indicates that nearly 68% of program subscribers are using the benefit to pay for mobile broadband, while slightly less than 32% are using it for cable, fiber or other home internet service.

John Horrigan, a senior fellow at the Benton Institute for Broadband & Society, told Axios he thinks the program is getting new households online based on survey data out of Philadelphia.

  • "I think it is having an impact on groups that have been way behind on broadband adoption — namely low-income households and communities of color," Horrigan told Axios.

What's next: The newly-passed infrastructure bill includes $65 billion to improve high-speed internet access and affordability.

  • $14.2 billion of that funding will be used to provide a $30-a-month voucher to low-income Americans to pay for internet service. That will replace the current $50-a-month program, offering less money monthly but widening the pool of those eligible.
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