Could an extension of the federal broadband subsidy be close?
"We need it for work, school and our zoom meetings," said Luis Coronado, left, about the end of Affordable Connectivity Program, while spending time with his family in Huntington Park, California, on April 19. 2024. Genaro Molina/Los Angeles Times via Getty Images
A Senate committee advanced a $7 billion funding vehicle for the Affordable Connectivity Program, which expired at the end of May.
Two months after a popular federal broadband subsidy expired, lawmakers are still trying to revive it.
The Affordable Connectivity Program, or ACP, which provided more than 23 million low-income households with a $30-a-month subsidy to pay for internet access, ran out of funding at the end of May. Efforts to restore funding since then have mostly stalled, despite the popularity of the program and even as those millions of households saw their internet bills go up.
But after months of negotiation, a new proposal to extend funding surfaced Wednesday. The Senate Commerce Committee voted to add $7 billion in funding for the program to the PLAN for Broadband Act, which would require a national broadband strategy to close the digital divide.
The amendment would again temporarily fund the program until the money runs out, so lawmakers would then have to find a long-term funding solution or let it expire again.
Democratic Sen. Peter Welch of Vermont, who has helped spearhead ACP extension efforts, said before the committee’s vote that elected officials “understand the importance of that program and how it benefits folks in every single one of our states.”
New Mexico Sen. Ben Ray Lujan, another Democrat who has been behind similar extension initiatives, noted the role of the program and the 2021 infrastructure law in working to close the digital divide.
“Ninety million people just couldn't afford [high-speed internet], and we learned during COVID the importance of this powerful program to ensure families could connect,” Lujan said. (The ACP is an offshoot of the COVID-era Emergency Broadband Benefit subsidy.)
Many outside groups praised the Senate committee’s actions. The Benton Institute for Broadband and Society called it a “huge step” to rectify people’s loss of connectivity, which the group said has already resulted in lost financial benefits for consumers and a loss of efficient health care delivery for providers.
David Dorwart, chairman of the National Lifeline Association, said the internet is a “requirement for modern life,” and so families need to be connected consistently.
“Funding the ACP is good for everyone, everywhere—from veterans to single moms and older Americans, from rural farming communities to our largest urban centers,” Dorwart continued. “Low-income Americans cannot afford to wait any longer to have their ACP benefits restored.”
The path forward for the funding extension appears anything but smooth. It is unclear whether it has the votes to pass the full Senate or the House, where a bipartisan group of lawmakers introduced companion legislation to the Senate bill late last month. The House bill received praise across the political spectrum.
But some lawmakers are unhappy that the extension doesn’t include any tweaks to the program’s eligibility criteria or a mandate some were seeking that the Federal Communications Commission implement anti-fraud and performance measures.
Indeed, Texas Sen. Ted Cruz, a Republican and the committee’s ranking member, expressed concerns that the extension has “no reforms in it at all,” and that the $7 billion in funds are not being offset elsewhere. Other outside groups have raised similar concerns.
But those concerns could become moot if internet providers are impacted. There are some indications that internet companies are starting to feel the pinch from the end of the ACP. In a recent earnings call with investors, Charter Communications President and CEO Chris Winfrey said the company lost 149,000 internet customers, “most of which” was driven by the ACP’s expiration, he said. Despite that, Winfrey said Charter has retained “the vast majority of ACP customers so far.”
“The real question is customers' ability to pay, not just now, but over time,” Winfrey said. “I expect we'll have a better view of the total ACP impact once we're inside the fourth quarter. The lack of ACP will also drive higher levels of market churn and selling opportunities for connectivity services over time.”
But the very nature of how the FCC funds several of its broadband programs for low-income people could be under threat, and have implications for the ACP, which oversees the program. The U.S. Court of Appeals for the Fifth Circuit ruled in late July that the Universal Service Fund is unconstitutional in how it raises money from consumers, throwing its future into doubt. Separate legislation has suggested using USF funds to make the ACP permanent.
The decision, which will likely be appealed before the U.S. Supreme Court next year, drew rebukes from government and industry alike. In a statement, FCC Chairwoman Jessica Rosenworcel called the ruling “misguided and wrong.”
One issue upon which there is bipartisan agreement is that all Americans need to be connected to thrive in the economy. Welch urged them in a statement after the committee vote to “put politics aside” and work to bring people out of “digital darkness.”
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