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Willingness to Pay for Broadband Internet


In the fall/winter of 2022, the UW-Madison EDA University Center conducted a statewide survey of Wisconsin residents on broadband access and affordability, with the goal of estimating the willingness to pay for broadband. As the state makes significant investments in broadband infrastructure, attention is shifting to the willingness, or ability, of people, particularly lower income people, to pay for broadband subscriptions.

  • Higher income households pay more for monthly internet subscriptions. This may be due to choosing to purchase a higher quality internet package when one has the financial means of doing so. Households also indicate they have an easier time fitting broadband into their monthly budget as their income level rises.
  • 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.

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