ACP's End Seen Bringing 'Even More Brutal' Competition for BIAS Providers

The expected end of ACP has the potential to be a many months long churn event for BIAS providers, GlobalData analyst Charles Garrett told us. The 23 million ACP households losing their subsidy "puts more jump balls into play than you can remember happening at one time before," he said. Many BIAS providers already have low-income offerings but will reposition those offers or tweak the terms to try to keep existing ACP subs and land new low-income customers. The hyper-competitive connectivity market will be "even more brutal for a stretch," he said.

Cable operators' post-ACP offerings reflect that they can't afford the loss of additional broadband subscribers atop customers who have already migrated to Verizon and T-Mobile fixed wireless offerings, Dell'Oro Group's Jeff Heynen told us. Garrett said fiber operators might not take much of a post-ACP hit as they don't have a lot of recipients on their rolls.

Recently announced low-cost offerings tied to the expected end of ACP include Comcast's Now (see 2404180012) and Verizon's Forward. Alabama-based Fastwyre Broadband said earlier this month it would self-fund the $30 ACP subsidy through August.

Starting May 1, Mediacom will retire its low-cost plan -- Connect2Compete Plus, which provides 100/5 Mbps service for $30/month with no install fees or equipment rental costs -- and launch Xtream Connect, Tom Larsen, senior vice president-government and public relations, said in an email. That plan will feature 100/20 Mbps service for $15/month plus a $14 modem rental fee that will be waived for households participating in the National School lunch program, he said. Xstream Connect will be available for households in Mediacom's service territory participating in federal programs including Medicaid, the National School Lunch Program or Supplemental Security Income, he added.

Charter Communications' ACP subs will receive a partial credit of $15 on their May bills, and a $35 credit on Tribal lands, a Charter spokeswoman emailed. She said to offset the $30 ACP credit, Charter is offering ACP subs a free Spectrum Unlimited Mobile line -- a $30/month value -- for 12 months, as long as they're not already receiving a free line.

ACP-enrolled households may be eligible for several low-cost plans from Cox should ACP end, the company said Wednesday as it announced it will pass on the partial benefit to its customers in May. "Our work does not start or stop with the [ACP], and we will continue providing access and affordable internet in the communities we serve," Cox President Mark Greatrex said. WideOpenWest also said it's highlighting its existing low-cost service tiers. Altice said it has communicated with customers about staying connected to Optimum services through low-cost offerings if ACP ends.

"We're hoping that all of the [ISPs] will take a hard look at what their actual network usage statistics are for the folks that they're rolling out ... new plans" to, said Next Century Cities Senior Policy Counsel Ryan Johnston. While it's understandable that providers may decrease service quality proportional to price, "we're hoping that is not going to be something that is going to significantly impact the households that need that sort of low-income support," Johnston said. The FCC is in a "great position" to serve as a "mediator" between ISPs and consumers, he added, suggesting the commission issue additional consumer-friendly guidance as households consider their internet needs in a post-ACP world.

Given the necessity of broadband, it's unlikely BIAS providers will see a large wave of ACP's 23 million households dropping service immediately should the program end, Garrett said. Instead, he said there could be many quarters of churn and declining subscriber numbers. The broader economy and inflation also could impact how many unplug post-ACP, he said.

ACP was introduced during the pandemic, when many schools were closed and residential internet service became more important, Heynen said. Today, not every household that was receiving the ACP benefit will come back, even if there are reduced-price service tiers, he said.

One challenge providers face is not knowing if ACP's demise is permanent or temporary, given how much the success of the broadband equity, access and deployment program relies on there being a customer base waiting for and able to afford broadband access when it arrives, Garrett said.

Awareness of these programs is the biggest hurdle to wider adoption among consumers, Heynen said. He said internet service providers typically haven’t done a very good job of advertising these offerings or making it easy for consumers to qualify for reduced rates.