The Cost of High-Speed Internet

Internet is as essential nowadays as water, electricity and gas. But figuring out your options or how much your internet should cost per month is not easy. Let’s break down what’s available, the average cost of internet and how you can save on your monthly high-speed internet costs.

What is high-speed internet?

The FCC defines high-speed internet, also known as broadband, as internet that’s always on and is faster than the average dial-up connection.

Types & Speeds of Internet Connections

High-Speed Internet Providers

What factors contribute to internet cost?

• Equipment rental – Most ISPs rent their equipment to customers for around $10. Rented equipment primarily consists of modems and routers.
• Installation/activation fees – Installation and activation fees cost about $100 on average. Not all companies charge an installation fee, but they are common.
• FCC Universal Service Fund fee – This is a fee placed upon telecommunication companies, and it is used to keep their services affordable for Americans. While the FCC doesn’t require ISPs to pass this cost on to their customers, it is permitted and done.. The current FCC UFSF fee is set at 19.6%.
• Late Payment fee – Late payment fees vary by provider but tend to range from $9 to $25 per late payment. The average late payment fee is around $12.
• Cancellation fee – If an ISP requires a contract for their internet plans, then there is likely a cancellation fee for those who want to exit the contract early. Some companies charge a flat-rate cancellation fee of around $100-$150, sometimes reducing the cost by a small amount per month of contract completed. Other ISP companies charge a cancellation fee based on the number of months remaining in the contract—often in the range of $10-$20 per month left on the contract.

How much should you be paying for internet?

For those wondering how much is the cost of internet, Americans are expected to pay an average price of $79 per month in 2020. In 2018, the average American household used 290 gigabytes of data per month. 

There are four main types of high-speed internet: cable, DSL, Fiber Optic, and satellite. Cable uses coaxial cables, like cable television, and costs an average of $58 per month. DSL uses the same wires as traditional phone lines and costs an average of $43 per month. Fiber Optics are a newer technology that requires fiber optic cables be installed and costs an average of $56 per month. Satellite internet relies on satellites and satellite dishes to transmit internet data and costs an average of $91 per month.

The internet can be costly, both to purchase and to run. Even so, as can be seen by the numbers above, high-speed internet has become an integral part of U.S. life, quickly becoming a necessity of the modern world.

Ways to lower your internet cost per month

• Switch Providers annually – When you sign up as a new customer with an internet provider, you can often gain discounts and other deals on your internet plan.
• Negotiate – Despite appearances, few company policies and prices are truly set in stone. Talk to your ISP agent, and you may be able to negotiate a better rate.
• Use your own equipment – Monthly rental fees can make up a significant portion of your internet bill. Supplying your own modem and router can keep these rental fees off your account.
• Choose a lower speed – Internet plan prices closely reflect their offered speed. Choosing a plan with a lower speed will often save money.

How to choose the best internet service

Which internet provider is best for you is going to depend on certain contextual factors. Ask yourself: What do you plan to use the internet for? How many devices do you plan to have simultaneously connected to it? How many people are likely to be using your network regularly? What deals and promotions are offered in your area? Although it can be frustrating, the more choices you have to make, the more opportunity you have to assemble the best deals. If these questions feel overwhelming, don’t worry, below is a step-by-step walkthrough of how to choose the best internet service for you.

1. Determine what you need from your internet. Decide how many devices you plan to have connected to your home network at a time. Look at what you use your devices for and determine what level of internet speed makes sense. This guide provides a reference for which internet speeds are suitable for different types of activity and can be a useful tool in determining what speeds will meet your needs.
2. Assess what is available. Available internet plans and services vary by location. Speed and availability are the main factors affected by locale, but the price can be impacted as well. For this step, you can click here to find out which providers and plans are available at your location.
3. Shop around. Look at the details of plans offered in your area and compare speed, price, data caps, contracts, fees, deals and discounts, and bundling options. The goal here is to determine which provider will offer you the best of what you want for the most reasonable price. Ask yourself, “of the available providers who fit my needs, who has the best of these things.”
4. Make your selection. With the data collected, it is time to decide. Once you have gone through the previous steps, you should arrive at a provider that stands out above the rest for you. Now, all that’s left is to contact them and schedule an appointment.

Consider the cost of internet

Internet pricing can sometimes surprise you, especially when you consider all of the different costs that might get factored into your bill. Below are some  common features and add-ons that might up your internet bill.

• Overage charges – Plans that have data caps will see charges added to your account if you go over your allotted data amount.
• Unlimited data add-on – Many internet plans that have data caps can have an unlimited data add-on purchased alongside them, removing the data cap but increasing the monthly price.

Determine the speed you need

• Cable – Cable internet is newer than DSL. It delivers roughly two times the speed, although it is still significantly slower than fiber. Cable is best for people who have moderate to high internet speed requirements. The average monthly cost of cable is $58.
• DSL – DSL is the earliest of high-speed internet types and still accounts for a significant number of users. While cable and fiber are faster, DSL is still capable of delivering speeds that are fast enough for most residential internet activity. DSL is best for people who have low to moderate internet speed requirements. The average monthly cost of DSL is $43.
• Fiber – Fiber Optic internet has the least availability, being a new technology that requires specialized lines. Fiber is currently the fastest form of commercial internet. It is best for people who have very high internet speed requirements. The average monthly cost of Fiber Optic is $56.
• Satellite – Satellite is significantly slower than other forms of high-speed internet, but is available nearly everywhere, as it does not use landlines but instead relies on satellites and dishes. The average monthly cost of satellite is $91. It costs significantly more than other forms of high-speed internet as it depends on much more expensive technology. 

What are the options in your area?

Every internet provider has a disclaimer posted along with their service plans. This disclaimer lets potential customers know that plans, speeds, and prices may vary by location. While this can be frustrating, it is primarily due to the nature of the American telecommunication infrastructure. In general, the more urban and densely populated an area, the more internet service options there will be. For an in-depth look at what is available in your area, take a look at our review of the best internet providers.

FAQs

How much does wifi cost?

Average monthly internet bills in the United States are expected to be $79 in 2020 but this can vary greatly depending on location, plan, and provider. The primary difference between regular internet and WiFi is a piece of equipment called a router. Most providers rent routers to their customers for $5-$10 per month. To figure out your wifi cost per month, add the cost of a router to the cost of your internet plan.

How much should high speed internet cost?

Unless a plan offers certain premium features that you are pursuing, such as top speeds and unlimited data, try to keep the cost of high speed internet below $58 on cable, $43 on DSL, $56 on fiber, or $91 on satellite. Following this guideline will keep you from paying above average for your internet type. Americans are expected to pay $79 per month for their average cost of internet in 2020.

Who has the cheapest internet?

Despite relying on some of the newest technology, Verizon Fios is the most affordable provider out of the ones reviewed. The cheapest Fios plan doesn’t deliver speeds beyond what cable internet can achieve, but it is cheaper.