Affordable Broadband Service for All Californians is Within Reach

 

 

Broadband access has become an essential service that has taken on equal prominence with other utilities because of its critical importance to people’s lives. Yet low-income households are effectively barred from accessing broadband service due to high prices. Studies^[1] consistently show that high broadband prices are a major reason why millions remain unconnected with limited access to critical services such as telehealth, remote learning, and job opportunities. 

A recent policy shift in New York offers a new path forward to addressing this issue. The New York Affordable Broadband Act requires broadband providers across the state to offer plans for qualifying low-income households at $15 per month for 25 Mbps (the Federal Communications Commission’s (FCC) download standard at the time of the law’s passage in 2022) and $20 per month for 200 Mbps.^[2] This law also allows the New York Public Service Commission to update the standards of what is required by broadband providers in the future to align with technological advancements in applications and services.  

Failed legal challenges to New York’s law reinforce that states can directly address broadband affordability issues (as we explain in our legal analysis). This provides a clear pathway for California to adopt similar laws and policies. In line with our statutory duty to advocate for lower costs on behalf of consumers, the Public Advocates Office has analyzed the potential impact of a broadband affordability requirement for low-income consumers in California. 

The Impact of a $15 Broadband Plan on Low-Income Californians

The Public Advocates Office’s preliminary report, Broadband Policy Options to Improve Affordability for Low-Income Californians, published on March 18, 2025, examines how much low-income Californians could save if the state requires broadband providers to offer standard broadband services (defined by the FCC as 100 Mbps download/20 Mbps upload) for $15 per month to families of four earning less than $65,000 a year. 

If California adopted a $15 low-income broadband plan requirement and applied it to broadband plans in line with current service speed standards adopted by the FCC, low-income subscribers of the four largest broadband providers – AT&T, Comcast, Cox, and Charter/Spectrum – would save nearly $100 million per year.

This requirement would effectively cut these broadband bills in half, as the average weighted price for low-income broadband at 100 Mbps or less is currently $30 per month for these providers. Moreover, the financial impact on broadband providers would be minimal because low-income consumers represent a small portion of their total revenues. Our analysis estimates that a $15 requirement would reduce California-based revenues for these four broadband providers by less than one percent.^[3]

It is also possible that lowering the price of broadband could increase adoption rates among low-income Californians, especially if paired with a $15 subsidy that would effectively bring costs to $0 per month for the lowest-income households. Because broadband infrastructure is already available in most areas, the primary barrier for nearly 3 million unconnected Californians is cost – not availability. Increasing adoption, even modestly, could offset revenue losses from a $15 price cap, and in some cases, broadband providers could see increased profits by expanding their customer base. 

Additional Savings from Expanding Broadband Access

Beyond direct cost savings, affordable broadband policies can deliver significant economic and social benefits to consumers and the state government. A recent study by the Brattle Group analyzed the broader economic benefits of increasing broadband adoption in healthcare, education, and labor productivity.

One area of major impact is telehealth. Expanding broadband access at affordable rates would increase access to preventive healthcare services, reduce the need for costly emergency room visits, and lower transportation costs associated with in-person medical appointments. These factors could more than offset the cost of a $15 broadband subsidy, making such a policy a cost-effective investment for both consumers and the government. 

It is important to understand that these benefits only materialize if broadband speeds come close to the FCC minimum standard of 100/20 Mbps. The FCC’s 200+ page report underscores that essential services – including telehealth, remote education, and remote work – require a reliable, high-speed connection. Currently, some broadband providers offer substandard, low-speed plans for $10 to $15 per month. While these plans may appear affordable, they fail to support modern applications and do not provide the same economic or social benefits as 100/20 Mbps service.

Next Steps for Broadband Affordability in California

Our preliminary analysis shows that substantial savings can be delivered to California’s low-income residents through a broadband affordability requirement. 

A policy mandating $15 per month for 100/20 Mbps would provide immediate relief while requiring minimal government spending. However, a subsidy may still be necessary to increase overall broadband adoption among the lowest-income Californians, ensuring affordability policies reach those most in need. 

Additionally, while 100/20 Mbps meets today’s minimum broadband standards, the historical trend of increasing internet usage suggests that higher-speed requirements will be necessary in the near future. Policymakers should consider mechanisms to update broadband standards over time to ensure that low-income households are not left behind as Internet-based applications and services continue to evolve.

As California explores new solutions for broadband affordability, our office will continue to analyze the financial impact of potential policies and provide data-driven recommendations to ensure all Californians – regardless of income – have access to affordable, high-quality broadband.

 

[3] This limited impact is due to the overwhelming share of broadband provider revenue coming from middle- and upper-income households. The most popular broadband services sold by these four providers in California are above 300 Mbps and cost between $85 to $99. The combined revenue generated from the four providers’ most popular plans is more than 30 times the amount that would be lost under a $15 low-income broadband requirement.