Renters and condo owners willing to pay more for fiber, trade group study says

14 June 2016 by Steve Blum

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Fast, fiber-based broadband raises the perceived value of a condominium by $8,600 and renters would be willing to pay an extra $80 per month for it, according to research just released by the Fiber to the Home Council, an industry trade group. On the other hand, most renters and owners don’t take broadband availability into consideration when choosing a place to live: the study says only about a third of apartment and condo dwellers who moved in 2015 or 2016 thought to ask about it.

There’s no explanation for this contradiction, although the study does speculate that…

Potential residents do not always think to ask about broadband when viewing a property since it is not immediately visible to the eye (unlike other MDU amenities).

Likewise, some owners/ operators don’t yet fully appreciate the importance of advanced broadband to consumers and don’t place enough priority on marketing this amenity.

To jump in on the speculation, I think a couple of things are going on. First, the dollar figures are averages and I would place a small bet that if you dive into the data, you will see a significant gap in willingness to pay between people who asked about broadband and those who did not.

Second, there’s probably some substitution thinking going on. Some people would assume that fast, fiber broadband would allow them to trim other bills, cable TV particularly. In other words, the premium they’d be willing to pay isn’t based on the notional intrinsic value of broadband but on direct savings elsewhere.

The FTTH Council research also indicates that the more costly, or newer, a property, the more willing renters and owners are to pay extra for fiber.