The recently passed One Big Beautiful Bill (OBBB) is likely to result in substantial changes in the financial prospects of low-income households. There is no shortage of analyses that foresee a budget shock for the less well-off among us as the social safety net contracts and the tax burden for low-income households increases. Direct effects are one thing, whether that is less food assistance or help with the heating bill in the winter. Indirect impacts are inevitable as well—and the ability to pay for home broadband service is bound to be one of them.

The following analysis estimates the number of low-income households that will lose home broadband connectivity due to OBBB’s negative impact on their household finances. The analysis shows that approximately 5.6 million low-income Americans (that is, those in the lowest 20% of the income distribution) may lose broadband connectivity as the full effects of OBBB unfold. Many low-income households rely only on a cellular data plan to go online and they are most at-risk of disconnection. At the same time, additional millions are likely to lose home wireline subscriptions, perhaps keeping some connectivity through a cell data plan. And for some, no home subscription to a broadband service may become a new normal.

In addition to the aggregate estimate of 5.6 million lost connections, this analysis presents state-by-state estimates for connections lost. About half a million households each in California and Florida may lose broadband connectivity, with 200,000 households potentially disconnecting service in states such as Pennsylvania, North Carolina, and Michigan.

What the One Big Beautiful Bill Means for Low-Income Americans

The OBBB amounts to the largest cut in the social safety net in decades—“possibly unprecedented.” Federal spending for the Supplemental Nutritional Assistance Program (SNAP) is slated to fall by $287 billion over the next ten years and cuts to Medicaid will total $793 billion over the next decade. Additionally, reductions in subsidies for health insurance under the Affordable Care Act and changes to student loan programs will also mean low-income households will spend more on essentials such as food, heating, healthcare and education.

Estimates of the impact on low-income households vary, but the two major estimates are from the Congressional Budget Office (CBO) and the Yale Budget Model. The CBO estimates that households in the lowest 10 percent of the income distribution will experience a decrease in household resources of $1,600 per year (or 3.9%), and the next lowest decile will experience a reduction of about half that.[i] This would suggest that the lowest 20 percent of U.S. households will lose $1,200. This is an average annual effect for the years 2026 through 2034.

The Yale Budget Model finds somewhat milder impacts on low-income households, in part because the model predicts that some federal cuts may be offset by state action, thereby softening the impact on low-income households. This model finds a $695 decline in income for the lowest quintile of households, (i.e., those in the bottom 20% of all homes). This, like the CBO estimate, is an average annual impact from 2026 to 2034.

Budgetary Pressures & Broadband Adoption

Low-income households, as these analyses suggest, are in for a budget shock in the next several years. When a household’s disposable income drops, something has to give—and for some households, it may be a broadband connection.

Our previous research found that having some extra financial help brings more people online—to the tune of 3.8 million households who came online when the Affordable Connectivity Program (ACP) was in operation. Millions more were able to maintain a household broadband subscription with the $ 30-per-month subsidy.

When the program ended, some ACP households suffered service disconnections or interruptions, with many having to downgrade to cheaper service (where available) to stay online.[ii] Short or long-term disconnection and service downgrades demonstrate the phenomenon of “subscription vulnerability,” in which paying a broadband bill is a struggle. As many as 43% of low-income households face subscription vulnerability. In response to the economic disruption at the outset of the pandemic, some 18 percent of low-income households lost connectivity during the pandemic’s early days.[iii]

Low-income households are clearly vulnerable to disconnection when facing financial pressures, but what is their response when faced with an increase in internet service costs? In a 2024 survey, the Benton Institute for Broadband & Society asked low-income households:

For households with annual incomes of $30,000 or less, 41 percent said they would downgrade service, 30 percent said they would continue service while cutting expenses, and 24 percent said they would cancel service.[iv] The response shows, therefore, that there is a 0.24 probability of a household whose annual income is below $30,000 per year with an internet connection cancelling service in the face of a $30 per month cost increase.

Estimating OBBB’s Impact on Broadband Adoption

The analysis discussed above of OBBB’s impacts focuses on those in the lowest quintile of households in the United States. That threshold, as 2023 American Community Survey data show, is approximately $33,000, meaning 20 percent of U.S. households in that data have incomes below $33,000 annually. In the 2024 Benton survey of low-income households, the best corresponding income threshold for analysis is households that reported an annual income of $30,000 or less.

Among all of those households, 24 percent said they would cancel service with a $30 per month service cost hike; however, this probability varies depending on the type of connectivity a low-income household has. A portion of low-income households (approximately 21%) are “cell only” when it comes to home internet service, meaning they only have a cellular data plan for their service. Many (about 50%) have both a wireline broadband connection and cellular data plan. When internet-connected respondents with annual incomes below $30,000 are asked about their response to a $30 per month price increase:

• Among cell-only respondents, 51% say they would cancel service.
• Among those with both wireline and cell data service plans, 20% would cancel service.
• For those with wireline broadband only (a small set of 7% of the sample), 8% would cancel service.

With these probabilities of disconnection in hand, and knowing the internet adoption rates for different types of low-income households, it is possible to calculate how many households could potentially lose a broadband connection (either wireline or cellular data) in the face of a change in disposable household income. The figure is the product of the overall number of households in the lowest quintile of income, that quintile’s internet adoption rate, and the probability of disconnection. The table below shows the results for the 26 million households whose annual income is $33,000 or below for the three types of internet-connected households noted above (along with internet adoption rate and probability of disconnection).

Disconnection potential among households in the lowest income quintile

The estimate of 5.6 million lost broadband connections amounts to 22 percent of all households in the lowest quintile of the income distribution (i.e., those with annual household incomes below $33,000). Of these 5.6 million, this analysis estimates that 3 million households will be left with no home broadband connection (cell-only and wireline-only households), while 2.6 million may disconnect a cellular or wireline subscription, or both. (For households with both wireline and wireless subscriptions, this analysis does not allow an estimate of what share of disconnections will be wireless and what share will be wireline). Nonetheless, the 5.6 million estimate shows the number of households that will experience a setback in household broadband connectivity in light of OBBB impacts.

Considerations in This Analysis

The 5.6 million estimate depends on a question that asks about a hypothetical $30 per month increase in internet service costs. In contrast, the analyses of OBBB on low-income households noted earlier estimated effects in terms of disposable income. The probabilities of disconnection are based on an inquiry about a price change that would affect a household budget. Predicted impacts of OBBB aggregate a number of changes in the economic environment, namely, a reduction in benefits for low-income households that strain their finances.

While the hypothetical price increase in broadband and the projected decrease in household resources are not identical phenomena, households are likely to look for expenses to cut, with broadband among them. The annual financial impact of a $30 per month internet price increase ($360 per year) is much smaller than the Yale budget model’s estimate on the decline in income ($695 per year) for the lowest quintile homes, as well as the CBO estimate for income loss ($1200 per year).

Another consideration is whether respondents' stated intentions about the likelihood of disconnecting service in a survey will align with actual behavior when faced with changes to their economic circumstances. Broadband service is now commonly understood as a household necessity, and in the face of price changes (e.g., the termination of the ACP subsidy), many households go to great effort to maintain service.[v] At the same time, the 5.6 million estimate is based upon respondents’ estimates on behavior for a $360 annual change in disposable income, which is much less than income effects estimated in the analyses cited within.

For this reason, this work relies fully on survey respondents’ self-reported statements regarding the probability of disconnection in the face of service price increases. Even if household members take on side jobs or cut other expenses to maintain a broadband subscription, as research suggests is a possibility, other cost burdens that OBBB introduces to low-income households may mitigate that effect. Income from new side jobs, for instance, might support food purchases or heating bills, not broadband. It is worth noting in this context how sizable the projected cuts to the social safety net are. As one analysis found, they amount to 0.3 percent of gross domestic product, ten times the amount of the next largest one-time cut in such programs (which dates to 1981).

Broadband Adoption Amidst Scarcity

A final issue is how these projected changes will play out. The entirety of OBBB’s negative impacts for low-income households will not be felt next year, but over a number of years, as the CBO and Yale models make clear. This means that subscription losses of 5.6 million are not likely to show up in a single national survey measuring broadband adoption. The more likely dynamic is for low-income households to experience periods of disconnection that arise when limited disposable income must be shifted to cover higher food or medical costs. These periods of disconnection may be protracted, but perhaps not permanent.

For many, however, not having home service may become a new normal—which will likely place increased pressure on community anchor institutions such as libraries to serve as alternative access points for low-income individuals. These institutions have traditionally been a foundation of “broadband workarounds” for individuals without home internet access who need to be resourceful in finding alternative means to use the internet.[vi]

Community anchor institutions will face increased demands as they continue to fulfill this role. The cruel irony is that the Trump Administration has already taken the budget knife to funding sources, such as the Institute for Museum and Library Services, that support such institutions. New Broadband Equity, Access, and Deployment (BEAD) Program rules also will make it more difficult for community anchors to play a role in supporting community access.[vii]

The table below shows how projected disconnections play out state-by-state. The figures in each state are proportional to the share of households in each state that fall below the household income figure that marks the national threshold for the lowest quintile, or $33,000 annually.

State by state results

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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