The following is a recap of a conversation between KC Digital Drive Executive Director Aaron Deacon and FCC Commissioner Anna Gomez at the US Ignite communities call on July 11, 2024. View a recording of the conversation here.
The Affordable Connectivity Program (ACP) was a federal internet subsidy program that provided qualifying households with up to $30 per month to reduce the cost of broadband internet. The program ran from January 2022 through the end of May 2024, and provided support to over 23 million households across the United States by the time of its conclusion.
The ACP Outreach Grant Program
According to FCC Commissioner Anna Gomez, a key driver of the ACP’s success was the outreach undertaken by local governments and community organizations to promote the program. Much of this work was supported by the ACP Outreach Grant Program, an FCC initiative to fund grassroots awareness and enrollment campaigns by local organizations. The ACP Outreach Grant Program marked the first time that the FCC had directly partnered with community organizations, and Commissioner Gomez credited the program with helping to build consumer trust around the ACP and more effectively reach underserved communities to ensure they were able to benefit.
The Future of Low-Cost Internet Plans
Many ISPs offer discounted broadband plans to low-income households. While some providers offered these plans even before the pandemic, many providers began offering low-cost plans for $30/month or less during the ACP period. This allowed ACP beneficiaries to purchase a broadband subscription at no cost to them and raised the service levels of many existing low-cost plans. With the expiration of the ACP, the future of these plans has been uncertain. At the end of May, a number of ISPs publicly committed to voluntarily continue offering plans at $30 or less to low-income households through the end of the year. However, without a replacement for the ACP, it is uncertain how many ISPs will continue offering these plans after this year, and at what prices and speeds.
The Future of the ACP and the Universal Service Fund
Commissioner Gomez expressed hope for the ACP’s refunding by Congress through the end of 2024, noting the bipartisan support for the program. However, she pointed out that a long-term solution to broadband affordability will also require Congressional action to make the program more sustainable, including possible reform to the Universal Service Fund (USF). The USF is a subsidy program paid for by fees levied on telecommunications providers that funds four programs aimed at promoting universal access to telecommunications services. These programs include the Connect America Fund (CAF), which subsidizes the deployment of broadband in rural areas, Lifeline, which provides a $9.25/month to low-income households for phone or internet subscriptions, E-Rate, which subsidizes internet access and telecommunications services for schools and libraries, and the Rural Health Care program, which supports the provision of telehealth services in rural areas.
The USF is currently funded at approximately $8 billion per year, which is approximately the same annual cost required to continue providing the ACP for everyone enrolled at the time of its conclusion. There are a number of proposals for how to reform the USF to be able to absorb a program like the ACP, but the FCC and others are still in discussions with Congressional leaders to determine how these reforms may take place, or whether other mechanisms may be more appropriate for achieving a more sustainable program for advancing broadband affordability. An additional complication for USF reform is the recent determination by the 5th Circuit that the USF’s fee framework is unconstitutional. The future of USF will therefore be dependent on an eventual finding by the Supreme Court on the constitutional limits of how the USF can receive funding.