A lot of folks have been pleading with the FCC to pick up the tab to continue the the Affordable Connectivity Program (ACP). Folks are assuming that the FCC has the ability to take on the ACP program inside the Universal Service Fund. To make that work, the FCC would have to apply a monthly assessment against all broadband users – something the FCC should have the authority to do if it votes to reinstate Title II authority over broadband at its April meeting.
What might it look like for the FCC to absorb the dying ACP program? FCC Chairwoman Jessica Rosenworcel told Congress that rolling the ACP into the USF could add $9.00 to monthly broadband and telephone bills. She also cited an internal FCC report that found that broadband bills could increase between $5.28 and $17.96 per month. I decided to kick the tires on the FCC’s estimates.
Taking over the Existing ACP. The existing ACP has 23.3 million recipients. That includes 13 million cellular customers, and the rest using landline or wireless broadband. It’s not easy to pin down the number of U.S. broadband customers that a fee might be assessed to. For example, there are numerous wholesale arrangements that would have to be defined – like assessing the fee on a landlord who includes broadband in the rent. Using a variety of sources, I assumed there about 121 million total broadband customers that could be assessed a fee to support ACP.
Funding the current ACP with a monthly fee on all broadband users equates to a monthly fee of $5.78. However, the monthly ACP fund disbursements grew 28% over the last year, so an initial fee would have to be set higher to prepare for growth over the next year. That means the starting USF fee might have to be something like $7.50 per month, and there would have to be additional future increases to the fee until the ACP fund reached equilibrium. It’s not hard to envision the broadband fee growing significantly beyond $10 per month in a few years.
This also raises the uncomfortable question about giving low-income households a $30 monthly discount and then charging the same folks to fund the program. If low-income households are excused from the USF fee, then the fee to everybody else would be increased by another 20%.
Exclude Cellular from ACP. There is a lot of controversy about giving the ACP discount to cellular customers. Almost all of the cellular companies involved in the program are cellular resellers, and most of the suspected ACP fraud involves cellular ACP claims.
If ACP is limited to landline (and fixed wireless) customers, the broadband fee would be a lot smaller. With the current number of ACP enrollees, the FCC broadband fee would be roughly $2.54 per month. However, it seems likely that a lot of ACP recipients receiving the discount on cellphones would convert that to a home broadband connection, which would quickly boost the fee.
The most common qualification for ACP is participation in the SNAP program that provides food subsidies for low-income households. There are currently 21.6 million households that get SNAP benefits, and if all of them applied for the ACP discount, the monthly fee to fund the USF would equate to $5.36. The current economy has historically low unemployment rates, and a future dip in the economy could quickly add to households eligible for SNAP and ACP.
Assessing a Fee on Broadband Isn’t Easy. It’s more challenging than you might think to assess a fee on every broadband customers. A fee on single family homes and standalone businesses is fairly straightforward. But there are a lot of complicated broadband billing arrangements. Landlords for both residents and businesses often build broadband into the rent. Landlords might drop broadband rather than pay a fee for every tenant. There are many arrangements providing free broadband to public housing. There are many varieties of wholesale broadband relationships that would have to be figured out.
Impact of Raising Rates. It’s not hard to imagining the furor that would ensue if people drop their broadband connection as unaffordable because of the extra fee. One of Chairman Rosenworcel’s fears is that funding broadband this way would push a lot of broadband rates to an unaffordable level.
Conclusion. I think Chairwoman Rosenworcel is in the right range with her estimate if you trend the current ACP recipients to grow for a few more years. However, the FCC has alternatives. If ACP recovery was limited to home broadband and not cellphones, it looks like the fee might might top out at $6 or $7 – lower than her $9 projection. If cell phones remain eligible for ACP, it’s not hard to envision the USF fee growing far past her cited $9 fee – that might be how the FCC predicted a $17 fee.
But the real issue isn’t the size of the monthly fee – but whether the FCC is willing to take on the responsibility. If the FCC was to assess a $5 – 7 fee on every broadband user, the agency would be in the crosshairs by both sides of the political spectrum. Realistically, it also seems likely that an attempt by the FCC to implement such a fee would be challenged and end up in court for years – which wouldn’t help anybody.
The FCC is obviously being cautious, but they might be right in doing so. Tackling such a controversial solution with such high visibility would likely put the FCC under a lot of scrutiny, which might even bring the entire Universal Service Fund under attack. I know it’s not the answer that people want to hear, but the best solution is for Congress to fix ACP – unfortunately, nobody is feeling highly hopeful about that.
They will get it the same place they got it in 1994, by adding a fee each month to my Verizon bill and I still have DSL like I did then. Take the customer’s money then screw them!!!!!! THIRTY F@#$%^& YEARS. i’M 84 AND SOON DEAD!!!!!!!!!!!!!!!!!!!!!!!!!!!
CHARLES K. (kEN) SCHUCHT
“If ACP recovery was limited to home broadband and not cellphones, it looks like the fee might might top out at $6 or $7.”
Appears to be the best approach. Low income households would better benefit from a landline subsidy since many end up using mobile smartphones as a substitute.
Need internet coverage
If ACP is limited to landline and fixed wireless customers; while excluding cellular customers, the (USF) Universal Service Fund broadband fee would be a lot smaller. With the current number of ACP enrollees, the FCC broadband fee would be low in cost; but excluding cellular customers would not be closing the digital divide, and alot of ACP recipients receiving the discount on cellphones would convert that to a home broadband connection, which would quickly boost the fee for everyone; which may cause recipients to drop their broadband connection because they can’t afford the steadily rising cost. This would cause the recipient head count to continously change, and difficult to keep track; which would affect the total fee to the recipient.
The current economy has historically low unemployment rates, and a future dip in the economy could quickly further widen the digital divide, and add to households eligible for the ACP program by having little to no income; which would equate to it being more expensive because more people would qualify, and the more recipients would raise the (USF) Universal Service Fund broadband fee; regardless to which program they were qualified for the ACP; such as SNAP benefits, or public housing.
Whether it be cellular customers, landline broadband, wireless broadband, It’s not easy to pin down the number of U.S. broadband customers that a fee might be assessed to. For example, there are numerous wholesale arrangements that would have to be defined – like assessing the fee on a landlord who includes broadband in the rent. The total broadband customers that could be assessed a fee to support ACP. Again, it is not easy to pin down the customers that a fee might be assessed to; unless their is a verifiable count from each program; that is held accountable if the recipients isn’t verified, and updated perhaps on a weekly, or monthly bases. The head count would change the fee accordingly. The controversial fraud issue is not only with cellular companies. It’s the ability to verify the changes in recipient count that actually qualify. This data has a need for accurate, and updated tracking that was never enforced to begin with. The lack thereof is what opened the gates for fraudulent activity. I’d like to see more aggressive behavior to combact the digital divide; instead of the usual bureaucracy unnecessary red tape. Perhaps the (USF) Universal Service Fund could match the funds of the recipients to offset the fee to the recipient.
CEOs of these companies are raking in the dollars.. They would not notice any difference in their pay if you help people.
The world 🌎 has been digital for decades now and the thought of not having connectivity as a basic freedom in 2025 is not only absurd it’s a disgrace. Our world 🌎 as everyone knows is becoming more diverse and brutal and being able to connect in a safe efficient way is more important than ever. I think paying 2 or 3 dollars more is absolutely worth every penny. Everyone knows there’s plenty of $$$$ to pay for this. 👁️👁️👀🌹😎🆗🌅👍
I work with the low income community. Cell phones are often the best option. I saw a survey of low income folks that said half of them don’t have a bank account, so they don’t have a credit or debit card they can give a phone company. This means they often have to choose landline or cell phone. Most people choose a cell phone. Lifeline is an option, but before ACP came around that program was on its last leg. $9.25 just doesn’t buy enough data to get you through the month anymore.
My name is Elizabeth Morin I’m in the ACP program and I would like the program to stay on it helps me out talking to my family please keep the program open for people it helps a lot of people without wifi
I had AT&T internet. I am disabled and live on SSI income, I do get foodstamps, and I live in a low income apartment. I struggle to pay for my phone through Verizon. I miss having the internet. It was just above $10.00 a month, then out of the blue they increased it to over $70. Not doable for me!!!
ACP NEEDS TO Continue even if all customers pay a small fee for it. $30 dollars a month is alot of money for low income people and those living on low fixed incomes each month. The internet is a way to keep current. It is a necessity, not a luxury. The regular phone bill keeps going up. Soon I won’t be able to talk to anyone by phone or pay bills by phone. The internet needs to be affordable to All Americans, especially those who need help staying connected. Find a way to keep the ACP funded before its too late.
It seems the best plan is to include individual households with the most need those as suggested in the article, who receive SNAP. The problem is how can you ask broadband or cellular users to cough up more money from an already expensive monthly fee paid by the user. If the Federal Government doesn’t subsidize some of the fees, it’s simply too expensive.