Of particular interest in Forvis Mazars’ latest study—“The 2025 Rural Broadband Benchmark Study: Trends & Industry Trajectory”—are findings on expenses and revenue, voice and internet service trends, and participation in the Alternative Connect America Cost Model (ACAM).
Expenses and revenue: Total operating expenses increased 2.90% in 2024. Without including depreciation expense, operating expenses increased 2.77%. After a period of relatively modest growth in expenses, the broadband industry experienced expense increases reflecting a higher inflation rate from 2020 through 2024. The decrease in 2023 and 2024 corresponded with lower inflation rates from the high of 6.5% in 2022.
Operating expenses more than doubled the 2024 increase in total operating revenue of 1.4%. The increase in operating expenses equals the 2.9% rate of inflation in 2024 as calculated using the annual Consumer Price Index (CPI). Three metrics drive the broadband rating: Operating income as a percentage of network access revenues, broadband internet revenue growth, and operating income growth.
Broadband services’ impact on financial results: A graphic in the report shows that, before 2001, voice revenues as a percentage of operating revenues were about three times that of internet revenues as a percentage of operating revenues. However, internet surpassed voice around 2007. In 2024, internet revenues were 26.7% of operating revenues and voice revenues were only 5.6%, according to the study.
Companies electing ACAM I and EACAM: The report says that 102 of the 141 companies that participated in the study elected ACAM I, ACAM II, or Enhanced ACAM (EACAM) as their form of regulation.
The report features a graph showing that in 2024 legacy rate-of-return companies had higher operating income as a percentage of operating revenues than those that used model support. ACAM II companies had outperformed legacy rate-of-return companies in the prior two years, and those electing EACAM experienced a lower percentage in 2024 than all but ACAM I companies in 2023.