The internet has become such an important part of our lives.
However, many of us don’t want to spend the money.
We figure out ways to get it for free or for a reduced price because the providers seem to think they can charge ridiculous rates per month.
If you’ve been wondering why the internet is so expensive, here are 10 reasons to help explain it.
Why Is The Internet So Expensive?
Depending on where you live and what providers are available, the internet can be an expensive monthly bill.
Often, there’s no way around it.
If you want internet in your home, you have no choice but to pay for it.
Now, you can find out why they’re as pricey as they are.
1. Markets Aren’t Competitive
One of the first things that you’ll notice when you go to get internet is that there aren’t many choices.
There may only be one provider in your area.
If you’re lucky, you might find a second provider, but this can be rare.
Since the markets aren’t competitive, there’s no need for the providers to provide great service or great prices.
They know that they have you right where they want you.
They can charge you whatever they want because they know that you don’t have a choice.
In other parts of the world, there are multiple providers.
It leads to a more competitive market.
The providers know that they have to work to offer great prices so that you’ll choose them over the competition.
It gives you a chance to do some price comparisons and choose the provider with the best overall deal.
For the most part, in the U.S., this doesn’t exist.
You call the one provider in town, and they give you their monthly price.
You either take the internet or you don’t.
If you don’t, it’s no big deal to the provider because they know that you’ll come around eventually.
Until then, there are plenty of other customers who will pay their rates because we have become so dependent on having an internet connection.
2. Equipment Is Costly
There are various pieces of equipment needed to access the internet.
Depending on the type of network you’re connecting to, you might need a gateway, a bridge, a hub, a switch, or a router.
The router is the most common way to access the internet from your home.
You can buy one from any electronic store or you can rent one from your internet provider.
For sheer convenience, most people choose to get their router from their service provider.
The added benefit of this is that the provider will be in charge of replacing it if it breaks or becomes damaged over time.
As new technology becomes available, the provider will also be responsible for upgrading it.
By renting the router, there’s an added charge on the bill.
Many don’t realize it, but it will often be $10 or more a month just to have the rental equipment.
It makes the monthly internet bill that much more expensive.
It’s not just the equipment inside your home that makes the internet expensive.
It’s all the other equipment that’s needed to supply you and the rest of your community with the internet service.
Cables that are either buried or carried on polls will head to a central office.
Within this office, there will be massive pieces of equipment that will offer the connectivity.
Servers and routers will fill the data center/central office to ensure that you have continuous internet.
The cost of this equipment is considerable, and it’s a reason for the high prices.
Eventually, the cost of such equipment is anticipated to be lower.
At this time, costs are still high, so providers have no choice but to make the investments.
They pass these costs on to end users, leading to high monthly internet bills.
3. Maintenance Must Be Performed
A lot of maintenance has to be performed on internet lines.
It’s all part of the infrastructure costs that are involved with having internet in a particular area.
If you’ve ever seen an internet service provider’s truck driving around town, it’s one of the maintenance people responsible for keeping everything up and running.
In a single town, there may be dozens of vehicles.
There may also be several dozen trained technicians to help with maintenance.
This comes at a substantial operating cost.
Often, there’s maintenance that needs to be done on both hardware and software.
Technicians will work in the main server room or office in order to perform routine maintenance.
Additionally, they may have to reset servers, make necessary updates, and troubleshoot configurations.
Outside of the server room or office, technicians may have to check on the towers, the cable lines that are hung or buried, and more.
If there’s an issue, repairs will need to be made right away.
Otherwise, it can lead to outages for countless individuals.
Any time a customer has trouble connecting to the internet, maintenance has to be performed.
Some of the troubleshooting can be done by phone.
Other times, it requires sending a technician out to the home.
With maintenance being performed randomly and routinely, both on-site and off-site, it comes at a cost.
There are costs involved with vehicles, labor, and overall equipment maintenance.
Understanding these costs will help to identify the operating costs that a provider must deal with and how it translates to high internet bills.
4. Poor Infrastructure
Internet is a requirement for so many homes and businesses.
However, many rural areas are still without internet.
The FCC has identified that close to one-fourth of the population in rural areas, around 14.5 million people, are without internet.
Infrastructure is expensive, which is one of the reasons it’s not everywhere across the U.S.
Additionally, there are many areas where the infrastructure is severely lacking.
Fiber optic cable is the best option, and there are very few cities where this is available.
With the infrastructure being what it is, many people find that their internet is slow and spotty.
They encounter countless outages because the cables aren’t quality material.
Broadband coverage isn’t strong in many rural cities.
When people are encountering low-quality internet, it should at least be affordable.
Unfortunately, most people notice just the opposite.
They’re still faced with expensive internet because the service providers feel as though they have to make up for the poor infrastructure.
They know that they’re going to have more outages, so they charge more in order to compensate for the more frequent repairs.
With everyone complaining about the expensive internet costs, improving infrastructure seems impossible.
It costs money to invest in more equipment and more labor to dig the cables.
Where is that money going to come from?
The federal government doesn’t seem too interested in footing the bill.
Until they do, providers will continue to charge high rates so that they can slowly expand and provide more and stronger infrastructure around the country.
At the rate at which infrastructure is being built, however, it could take a decade or longer to get everyone internet.
By the time they’re finished, all of the existing infrastructure will be outdated, and the process will have to start all over again.
5. Installation Is Time-Consuming
Have you ever seen the process that it takes to install the infrastructure for the internet?
In most instances, cable has to be buried underground.
It goes all the way from the data center to each individual home.
This requires a significant amount of labor.
It’s not a one- or two-day job, and it certainly requires a number of technicians to get the work done.
Further, these technicians are highly trained, so they are being paid very well to do their job.
If the data center is located miles away from a community, there could be 20 miles or more of cable that has to be buried.
There are a lot of costs involved, including labor, overtime, as well as the equipment needed to help the installers get the job done.
Each time new installs take place, it’s a cost that the service provider must endure.
Since there are always new communities being built and expansions being made, providers are always incurring these costs.
It’s one of the reasons internet rates never seem to go down.
6. Regulations Are Lacking
If you’ve noticed, there aren’t a lot of regulations concerning internet service providers.
The problem with that is that they have entirely too much control over the quality of service they provide and what they’re able to charge.
Essentially, internet providers are allowed to create monopolies.
They can run an entire city as the sole provider.
Since they are allowed to do this, they have the power to charge anything they want, and they have chosen to charge a lot.
Internet providers are lumped into the category of “telecommunications.”
At one point, there was a concept of net neutrality.
It identified that all internet service providers had to provide the same content, applications, and even access to sites.
Additionally, they would have to offer it all at the same speeds as other providers.
However, providers argued that this would take away from the competitive nature of providing internet services.
Additionally, they felt that they were being de-incentivized from expanding their services.
In December of 2017, the FCC ruled to repeal the concept of net neutrality.
It has resulted in there being no network neutrality regulation in the U.S. While internet service providers benefit, customers do not.
There are still many unresolved issues surrounding regulations.
Until there can be a proposal that is accepted by the government as well as providers, they will remain unregulated.
Only when regulation kicks in will it appear that prices will ever become competitive (and thus, lower).
7. There Are Different Speeds
There are various internet speeds, which will impact the cost of what you pay.
The faster your internet is, the more you’ll pay.
Most internet speeds are based on the download speeds, measured in Mbps or megabytes per second.
Some of the most common speeds being offered by providers include the following:
- 100 Mbps
- 200 Mbps
- 300 Mbps
- 600 Mbps
- 900 Mbps
If you decide to perform multiple activities online at once, you’ll want to consider higher speeds.
It’s also important to note that there are different types of internet connections.
They’ll help you access different speeds and provide you with better or worse service.
Depending on your area, you may have access to several internet options.
Dial-up is one of the slowest forms of internet.
While many believe it is obsolete, it’s still found in many rural areas of the country.
The biggest downside to this form is that you can’t make or receive phone calls while connected to the internet.
Satellite is another option, often found in rural areas.
If you’re not able to get a clear signal from your satellite, though, you lose connectivity.
Broadband is one of the most common ways to access the internet and is commonly offered through your cable provider.
DSL (Digital Subscriber Line) is an advanced version of dial-up.
It’s faster and of higher quality.
It uses two phone lines, allowing you to connect to the internet with one and receive phone calls on the other.
Cable is another form of internet, which is similar to broadband but a bit faster and more dependable.
Finally, there’s fiber optics.
It’s the most innovative and the fastest.
Unfortunately, it’s not readily available around the U.S. Further, it’s the most expensive because it uses the latest and greatest technology.
You may be at the mercy of your location and your provider to determine what is available.
It’s worth exploring your options, especially if you’re looking for faster and more dependable internet.
8. Rural Areas Can’t Access
Rural areas are often stuck with whatever poor form of internet they can get.
While many providers have promised to expand their services, it will result in higher charges because of the added equipment and labor that is necessary to expand.
When rural areas are forced to use subpar internet, it can result in other added expenses.
For a traditional dial-up, there may be the need to have one or two landlines.
There may also be the need for a higher-end modem to avoid getting the connection dropped.
For a satellite, there’s an investment in a satellite dish as well as the cost of satellite service.
When other services do become available, providers will often tack on a startup cost to help compensate for the expense of expansion.
9. High Demand
Demand is a top reason for the high prices of internet bills.
The internet providers know that there is high demand.
They want the internet to check their social media sites.
Of course, they also need the internet to be able to work from home.
The demand is only getting greater, especially as many companies have learned that people can often be more productive by teleworking.
When there is demand, internet providers get greedy.
They know that you need them, so they can charge whatever they want.
No matter what they charge, people will find a way to pay for it because the internet is such a requirement in today’s day and age.
10. It’s Still Too New
The reality is that the need for the internet is still a relatively new concept.
The government hasn’t caught up with the demand.
It makes it difficult for the regulations to be in place.
Further, companies haven’t had enough time to get out there and improve upon the infrastructure.
Once upon a time, people would have to pay for long-distance calling.
It would cost a significant amount of money to call from one coast to another.
The longer the call, the more it would end up costing.
Today, long-distance fees don’t exist.
You can talk for as long as you like without paying anything additional.
“Long distance” represents an old-school mentality that doesn’t exist anymore.
Area codes represent various parts of the country, though most people are no longer linked to the area codes on their cell phones.
People can take their phone numbers with them.
Internet connections and online aliases are following suit.
People can create an email address that can be accessed from anywhere in the world.
People can use mobile devices to get onto the internet from anywhere as long as they can do so through their cellular provider or with a Wi-Fi hotspot.
It’s only a matter of time before internet connections will become cheaper.
Hopefully, there will be a time when the internet will be free.
Then, we can sit back and reminisce about a time when we had to pay for the internet, just as we had to pay for long-distance calls.
Even texts were once limited.
Now, they’re unlimited and so are the minutes that you can use your mobile service.
There are rarely hidden fees anymore, unless you decide to call or text when you’re outside of the U.S.
Only then are there fees that you’ll want to explore in detail.
As the internet becomes more readily available, it will be seen as a requirement instead of a luxury.
When it’s been around for long enough, the price may come down or the expense may go away entirely.
However, we’re not at that point just yet.
How To Save On Internet Services
While the internet can be expensive, there are a few ways that you can save on your monthly bill.
You’ll want to consider what you can afford and how fast your internet needs to be.
Many internet providers will offer two speeds, though this will vary based on where you live.
The slower internet is going to be a download speed of around 300 Mbps.
If you’re only using the internet to browse websites and check email, this should be more than enough.
The faster internet speed may be close to 1 Gbps.
This is the kind of internet speed that you want if you’re playing online games or streaming TV shows and movies.
There’s no need to pay for faster internet than you actually need.
You may end up saving $20 a month or more simply by downgrading your internet.
Another way to save is by bundling.
Many internet providers will offer other services, including landline telephone, cable, and even wireless phone service.
When you bundle two or more services, you can end up saving quite a bit per month as opposed to getting them all separately.
Again, though, only pay for what you need.
You’re not really saving money if you’re bundling a landline without actually using it.
Shop around for your internet services.
Depending on where you live, there may only be one or two companies, and that’s one of the main reasons it’s so expensive.
However, by shopping, you can be sure that you’re getting the best possible deal.