The clock is ticking on the Affordable Connectivity Program (ACP). Current estimates show the program may run out of funding as soon as the end of the first quarter in 2024, ten months from now. The ACP provides a $30 monthly discount to eligible households and up to a $75 monthly discount to households residing on Indian reservations. The program started with a little over 9 million households at the start of 2022, and in March 2023 was up to over 18 million enrollees. You can see the enrollment statistics on this website.
The only solution for keeping ACP operating is for Congress to refill the ACP funding bucket somehow. This topic was discussed at the recent House oversight hearings on broadband. Angela Siefer of NDIA (National Digital Inclusion Alliance) testified at that hearing and said that reauthorizing ACP was one of the biggest broadband issues on the plate for Congress. She talked about the many gains that have been made in getting broadband to low-income homes.
ACP was not created through a normal budget appropriations bill but was funded by $14.2 billion from the Infrastructure Investment and Jobs Act (IIJA). There was also rollover funding of $2.2 billion added from the previous Emergency Broadband Benefit program that had been funded by the CARES Act. That was a one-time funding event, and that means specific legislation is needed to keep the program running.
There has been talk of moving the responsibility of the ACP to the FCC’s Universal Service Fund. But that would mean the agency would have to find a new way to pay for it. The current fees levied on Internet telecommunications are not nearly large enough to absorb the ACP obligations. Congress has already been considering ways to eliminate the FCC’s Lifeline fund, so the FCC might not be a politically viable solution.
Big ISPs are in favor of the ACP. The largest recipient of the funding is Charter, and Comcast is the fourth largest. One of the things that makes it harder to continue the funding for ACP is that eleven of the top fifteen recipients of ACP are wireless carriers. There is some concern that there is fraud embedded in the claims of some of these companies, which gives ammunition to those who don’t want to see the subsidy continue.
For ISPs, one of the biggest issues that will arise from the end of the ACP is that the upcoming BEAD grants require ISPs to have a low-income plan. Most ISPS have been pointing to the ACP as their low-income solution. But if the ACP expires, ISPs will have to develop a self-funded discount plan in order to win grant funding.
Anybody who has been watching Congress this year understands the challenge of getting a divided Congress to agree to continue funding a subsidy program. Many DC pundits are convinced that there will be very little bipartisan legislation passed in 2023 and 2024. There has been a lot of recent effort aimed at getting more folks enrolled in ACP – but that effort will mean very little in the long run if the program runs out of money.