American Consumers Could Save at Least $8.1B Annually with 5G Home Broadband, According to New Report

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Jun 15, 2023, 10:00 ET

WASHINGTON, June 15, 2023 /PRNewswire/ -- Americans could save over $8.1 billion a year thanks to increased home broadband competition from 5G fixed wireless access (FWA), according to a new report by Econ One, commissioned by CTIA. The analysis finds that more mid-band licensed spectrum is key to making sure 5G FWA offerings can be scaled to maximize these economic benefits.

Executive Summary: 5G FWA home broadband service offers high speeds and low prices, competing directly with cable, fiber, and other broadband providers. Lower prices for home broadband service means consumers are keeping money in their pockets. The fastest and most effective way for policymakers to see 5G FWA bring more competition and further drive consumer savings is by making additional spectrum available for licensed 5G use.

Full Report: More spectrum means more savings. With sufficient spectrum resources, FWA could drive down cable pricing even more aggressively than it is today, resulting in over $8.1 billion in consumer savings.

"We now have an affordable broadband option available to millions, offering real competitive choice in more and more communities, and providing a critical tool in helping close the digital divide," said Meredith Attwell Baker, President and CEO, CTIA. "With more 5G spectrum we can further expand this service and bring these benefits to even more Americans."

5G FWA accounted for 90% of all new broadband subscriptions in 2022, and the two fastest growing home broadband providers are wireless companies offering 5G home broadband over exclusive-use licensed spectrum.

To determine how consumers will benefit from the further expansion of 5G FWA, Econ One conducted a survey to estimate the impact it would have on wireless home broadband substitution and consumer pricing under a number of different scenarios. The results found significant consumer savings, especially in markets where cable is the only high-speed broadband provider, which currently represents about 30% of high-speed broadband households. If 5G FWA expands into these markets at current prices, then prices on existing cable broadband offerings will fall by 37% in response to the new competition. This price reduction is estimated to yield at least $5.7 billion in annual consumer savings alone.

"FWA is bringing real benefits to consumers, but it's a data-intensive product, and growth can only occur in areas where service providers have sufficient spectrum capacity," said Hal Singer, Managing Director, Econ One.

The authors determined that if operators had sufficient additional spectrum capacity to compete more aggressively with fixed broadband providers for subscribers, FWA would further drive down cable pricing resulting in $8.1 billion in savings. Considering other surpluses, overall consumer benefits from this heightened competition would increase to $9.6 billion a year.

"The policy implication is clear," said Augustus Urschel, Economist, Econ One. "The best and fastest way to increase home broadband competition, which will bring significant consumer savings, is getting more full-power licensed mid-band spectrum into the hands of FWA providers."

SOURCE CTIA