Regulation - What is it Good For?

The Affordable Connectivity Program

One of the programs to come out of the Infrastructure Investments and Jobs Act is the Affordable Connectivity Program (ACP) which will replace the Emergency Broadband Benefit (EBB) program as the funding source to provide discounts on broadband for low-income households.  This program is being funded for $14.2 billion, which is part of the $65 billion aimed at broadband issues.

There are differences between the two programs. The biggest change for most participants is that the $50 discount under the EBB plan will be reduced to $30 per month in the ACP. There is also a change in eligibility requirements. The EBB plan was eligible for households with incomes of 135% or less of the federal poverty level. The new ACP plan allows homes with incomes up to 200% of the federal poverty level. To put that into perspective, the ACP discount could be claimed by a household of three with a total household income up to $44,000 (using the 2021 definition of poverty).

The existing EBB plan will stay in effect temporarily. Households can still enroll in the EBB and will get the $50 discount through the end of February 2022. There will be an automatic conversion to the new Affordable Connectivity Plan for those that are eligible for both plans. There are some household that are eligible for the EBB due to being unemployed due to Covid-19 that might not qualify for the new plan.

One of the principles in the new plan is that ISPs must allow households to apply the $30 discount to any broadband product at the same price and terms available to other customers. The new rules have a direct rebuke of Verizon and a few other ISPs and prohibit upselling – forcing customers to buy a more expensive plan to get the discount. The ACP rules also prohibit requiring customers to sign long-term contracts to get the discount.

There are a few new rules that ISPs are not going to like. An ISP may not require a household to submit to a credit check to get the discount. It also appears that the new rules stop ISPs from disconnecting customers for non-payment until after 90 days.

It doesn’t appear that any ISP that enrolled in the EBB program will have to take any extra steps to be part of the new ACP program – it looks like the change will be made automatically on March 1, 2022. ISPs still would have to take the needed steps to join the EBB or ACP.

There is no set ending for the plan, and if not renewed, would expire when the $14.2 billion of funding has been spent. There is also nothing in the new law that defines what happens to the $2.2 billion that remains in the EBB program. There are already a few in Congress lobbying that the leftover funding should be added to the ACP funding.

The big $42.5 billion federal BEAD grant requires that any grant winners have a low-income broadband solution, and joining this program is the easiest way to meet that requirement. ISPs that elect not to join the ACP will need to have some similar internal discount plan to get the federal grants.

A lot of ISPs didn’t enroll in the EBB program because they viewed it as temporary and transitory. While there is no guarantee that the new ACP plan will survive for the long haul, there is enough funding in this plan to last for many years. ISPs really should consider this.

3 replies on “The Affordable Connectivity Program”

Thank you for summary of the proposed new rules. These are great points to highlight. One difference I read is that the enrollment in EBB ENDS December 31, 2021. Any household enrolled (meaning approved) will continue to receive $50 a month until March 1.

ACP begins on December 31, 2021 and those households will receive $30 a month. Someone will not be able to enroll in EBB as of January 1, 2022. It remains to be seem if the ISPs will begin applying ACP January 1, 2022.

Currently Charter/Spectrum in California has told customers they need to start service first at market rate then get approval for EBB. The company does not apply the EBB credit retroactively to when the customer was required by the company to start service. We will be looking to ACP rules to change that process.

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