Bipartisan bills in the U.S. House and Senate may breathe new life into the now-defunct Affordable Connectivity Program with millions in new funding to sustain it through the end of the year and shore up financial support for the FCC’s underfunded rip-and-replace program.
Impact: Last week, the Senate Commerce Committee advanced Senator Peter Welch’s (D-VT) amendment to The Affordable Connectivity Extension Act that would infuse the ACP with $7 billion in funding, with an additional $3 billion earmarked for the federal rip-and-replace program. Welch attached the amendment to the PLAN for Broadband Act, which closely matches an ACP rescue bill introduced in May and that proposed an additional $6 billion in ACP funding, the elimination of the one-time $100 device subsidy, tightening eligibility requirements, and had multiple bipartisan co-sponsors. Both the original bill and the new amendment also include funding for the FCC’s chronically under-supported rip-and-replace program (official name: Secure and Trusted Networks Act), which helps fund providers’ efforts to remove and replace equipment from Chinese suppliers Huawei and ZTE embedded in U.S broadband networks.
In the House, Representatives Nikki Budzinski (D-IL) and Mike Carey (R-OH) introduced the Secure and Affordable Broadband Extension Act last week. This legislation mimics the Senate bill and would be funded by auctioning AWS-3 band spectrum to domestic telecom companies. It also calls for cutting costs with the ACP by adjusting the eligibility threshold to 135% above the poverty line ($28,000 for a family of two) from the original 200% ($41,000 for a family of two), bringing it in line with other federal subsidies like Lifeline and Medicare Part D’s “Extra Help.” The $30/mo subsidy for eligible households ($75/mo for those on tribal lands) remains unchanged.
However, the path forward is not necessarily a smooth one on either side of Congress. The $6-$7 billion earmarked for the ACP would sustain the program only through the end of 2024, according to Kathryn de Wit, director of Pew’s Broadband Access Initiative. And as Joe Kane, director of broadband and spectrum policy at ITIF, pointed out, getting 23 million ACP households back into the program may be complicated by changes of address and shifting eligibility. Systemic political objections also persist, as evidenced by opposition from Senator Ted Cruz (R-TX) to the latest Senate effort and his threat to block the legislation through a filibuster if it does come to the floor for a vote because it doesn’t include the offsets he wants. In the House, Speaker Mike Johnson would have to agree to bring the bill to the floor for a vote, something he has not shown any interest in doing up to this point even though it would likely have bipartisan support if a vote were to be taken.
According to New Street Research analyst and former FCC official Blair Levin, even with the effort to revive the ACP advancing a little bit in the last week, the chances of anything actually passing both houses of Congress and reaching the president’s desk remains slim. In fact, Levin put the odds of passage at less than 50%. In the meantime, the effects of the end of the ACP have already started impacting broadband providers’ subscriber numbers, with Charter and Comcast both pointing to some Q2 subscriber losses directly related to eligible customers’ loss of the federal subsidy. But at least in Q2, the losses turned out better than expected. The impact on the next few quarters could be more negative as additional customers determine they can no longer afford service without ACP support. The effects on consumers also continue to bloom, with LightReading reporting that a recent survey from the Benton Institute for Broadband & Society determined the end of the ACP will cost consumers “$2 billion in lost consumer financial benefits” as they move to downgrade or end their service altogether.
