Study Puts Cost on Broadband Divide: $7,700

A lot of people in Washington, D.C., talk about the cost of the digital divide, but the Internet Innovation Alliance has assigned an actual number to the value of a broadband subscription: about US$7,700 a year.

The average U.S. household can save more than $7,700 each year by bargain hunting online with a broadband connection, broadband advocacy group the Internet Innovation Alliance (IIA) said in a study released this week.

"Broadband is a great investment for penny-pinchers," said Bruce Mehlman, cochairman of the IIA.

The average U.S. family can save more than $2,700 a year in entertainment and more than $1,500 in travel through broadband, according to the study. A household can also save nearly $1,000 a year in housing when looking for rental listings online and more than $950 in groceries by shopping online, according to the study, authored by Nicholas Delgado, a financial planner and principal of Chicago-based financial advisory firm Dignitas.

All this for the cost of a $490-a-year broadband connection. And that's not even factoring in more intangible benefits of broadband, including information on jobs, better communication with friends and family, easier access to health-care information, and applications to help households save energy, Mehlman said.

"We're certainly at a time in the global and national economy when there's a lot of focus on saving time and saving money," Mehlman added. "Ways to use information technology to save money seems like a very timely topic to us."

Delgado looked at the average costs of items offline and compared them to the costs of the same items offered on websites or discounts offered by sites such as Couponmom.com. To determine an annual cost savings of more than $2,700 for entertainment, he looked at sites such as Groupon.com, Livingsocial.com and Bargainseatsonline.com to find savings for activities including concert tickets, sporting events and restaurant dining.

Beyond the large-ticket items, broadband can save Web users about $95 a year on gasoline, $76 on nonprescription drugs and $193 on newspaper subscriptions, with most newspapers offering free news online. The numbers are based on an average U.S. household income of $63,000.

This week, the U.S. National Telecommunications and Information Administration (NTIA) released a report saying that 36 percent of U.S. residents don't subscribe to broadband at home. Only 4 percent of the nonsubscribers said they didn't buy broadband because it wasn't available to them.

IIA commissioned the study because the people there had an intuitive sense that "bargain shoppers willing to put in the time" could save significant money online, Mehlman said. "This information offers you a compelling reason that going online can save you money," he added.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

Subscribe to the Daily Downloads Newsletter

Comments