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Broadband can save users $8,400 a year, study says

The service allows users to compare prices and save money on gasoline, an advocacy group says

U.S. residents can save nearly US$8,400 a year in entertainment, clothing, food and other expenses by subscribing to broadband, according to a study released Friday.

Before factoring in the cost of a broadband subscription, broadband users can save $8,870 a year, compared to a savings of $7,695 last year, according to the new study by the Internet Innovation Alliance(IIA).

The savings difference between this year and last is due to a rising cost of products and services offline and an increase in comparison shopping services on the Web, said Bruce Mehlman, the IIA's co-chairman. "Consumers are spending more, and there are more opportunities for differential pricing" between offline and online products as the U.S. economy improves, he said.

One of the largest savings came in the area of entertainment, where broadband customers could save nearly $2,500, or 48 percent, of their yearly expenses, according to the study, by Nicholas Delgado, principal at financial planning firm Dignitas. Broadband customers could save nearly $1,660, or 20 percent, of their travel expenses, and nearly $1,050, or 60 percent, of their clothing expenses.

The IIA study also saw an 85 percent savings in a household's newspaper subscription costs, a 33 percent savings in nonprescription drug expenses, and a 26 percent savings in food expenses. The savings are based on a household income of about $63,700.

Broadband users could save a smaller percentage of their newspaper budget this year than last, with more publications charging for Web content and rising online subscription costs, the study said. In the other categories in the study, the percentage of savings increased or remained steady.

Access to the Internet allows shoppers to compare prices on a wide variety of items and gives them access to a larger inventory of products, IIA said. Shoppers can also find Web-only discounts and coupons, and they can save gasoline costs by shopping online, the advocacy group said.

Mehlman called the Internet a "game changer" for people who like to compare prices.

Not all broadband users will save the entire $8,400, but broadband subscribers who comparison shop can find significant savings, Mehlman said.

"This is the counterintuitive case where you have to spend more [by subscribing to broadband] to save money," he said. "It takes bandwidth, it takes time and it takes work, but if you're committed, the savings are there, and you'll far more than pay for the cost of the broadband."

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 [email protected]


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