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'Break-the-Glass Moment'

ACP, Rip-and-Replace Supporters Eye Other Funding Vehicles After FY24 Snub

Advocates of the FCC’s affordable connectivity program and Secure and Trusted Communications Networks Reimbursement Program believe funding for both priorities remains available this year, despite Congress having omitted funding in the Further Consolidated Appropriations Act FY 2024 minibus spending package enacted last week (see 2403210067). Program backers acknowledge funding will be more difficult as the FY24 package was their best opportunity. They also admit appropriations politics will only prove trickier with Capitol Hill hunkering down for the 2024 election campaign.

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Senate Commerce Committee Chair Maria Cantwell of Washington and other Democratic leaders are setting their sights on using future FCC spectrum auction revenue to offset ACP and rip-and-replace funding. She is proposing reauthorizing the FCC’s lapsed auction mandate for five years, without mandating sales of specific spectrum bands, based on a Congressional Budget Office analysis valuing such a plan at $12 billion-$15 billion (see 2403140066). That would be enough to cover proposals for $7 billion for ACP in FY24 and the additional $3.08 billion needed to close the rip-and-replace funding gap, lobbyists said.

There was a lot of support” during a Senate Commerce hearing last week for using spectrum proceeds to fund both priorities (see 2403210063) despite some Republican members’ misgivings, Cantwell told us. “That’s the issue” and now committee leaders need to “figure out” how to reach a compromise. Sen. Steve Daines, R-Mont., filed the Supporting National Security with Spectrum Act (S-4049) last week in a bid to offset the additional rip-and-replace money by authorizing an FCC reauction of the 197 AWS-3 licenses that Dish and affiliated designated entities returned to the FCC last year (see 2403220056).

Senate Communications Subcommittee Chairman Ben Ray Lujan, D-N.M., viewed the spectrum hearing as “encouraging” because “for the most part there was agreement to find a solution” that will allocate money to ACP and rip and replace. “There are potential solutions within the spectrum conversation,” but lawmakers shouldn’t lose sight of “the urgency to find funding for ACP and provide certainty going forward,” he told us. ACP participants “have already received” ISPs’ notices about the program’s impending funding exhaustion and “they’re concerned.”

Lawmakers will “have to get together” after Congress returns from recess the week of April 8 “and start to figure out another interesting way to get” ACP and rip-and-replace funding done, said House Communications Subcommittee ranking member Doris Matsui, D-Calif. “There are some ideas floating around” the bicameral USF revamp working group for addressing long-term ACP funding. Keeping the program running this year will likely still involve movement on spectrum policymaking, Matsui told us. She and other House Communications members will “look at” Cantwell’s proposal given she’s an “important player,” but the Senate Commerce chair “is not the only one involved” in negotiations.

One way or the other, we’ve got to deal with” the rip-and-replace funding gap given the potential negative impact of participants not fully replacing removed equipment if they don’t receive full reimbursement from the FCC, said Senate Communications ranking member John Thune, R-S.D. “The demand is much higher than we anticipated” when Congress appropriated the program $1.9 billion in the FY 2021 appropriations and COVID-19 aid omnibus package (see 2012210055).

I’m sure [rip-and-replace funding] will be part of the discussion on spectrum” legislation, but the FY21 allocation shows Congress is willing to deal with that issue via the general appropriations process, Thune told us. The Senate Commerce hearing showed “we’ve got to rebuild the spectrum pipeline,” as he and panel ranking member Ted Cruz, R-Texas, proposed in the 2024 Spectrum Pipeline Act (S-3909). “Cantwell has her idea, but we think ours makes a lot of sense,” Thune said.

'Funding Cliff'

This is a break-the-glass moment” for ACP backers if they want to keep the program running past the spring, said Vernonburg Group Chief Policy Officer Greg Guice. “All solutions need to be on the table” in case lawmakers can’t reach a short-term spectrum deal. “The best option” on the Hill remains pairing an FCC auction renewal with “borrowing authority” for the ACP and rip-and-replace money, he told us: If that’s not feasible right now, the Biden administration should examine other stopgap solutions, including using USF reserve funds to address affordability via Lifeline.

The odds are uphill,” but there are legislative vehicles Congress may consider “before the real ACP cutoff begins,” said New Street’s Blair Levin. He pointed to FAA reauthorization legislation and an extension of Foreign Intelligence Surveillance Act Section 702’s surveillance authorities as potential vehicles for allocating ACP and rip-and-replace money. Similarly, Public Knowledge sees the upcoming FAA and FISA bills as prime vehicles for moving ACP funding.

An extension” of ACP via either the FAA or FISA bill would mean “no loss of coverage” because Congress faces deadlines to act on both those bills before affordability funding runs out, said PK Government Affairs Policy Advocate Nat Purser. “We don’t have a preferred path” forward, said PK Broadband Policy Director Alisa Valentin. “We just want to make sure that there is short-term funding for this program.” The spectrum legislative talks also remain a viable way of finding short-term ACP funding given interest from Cantwell in a reauthorization-only approach to offset a bridge loan to keep the program running (see 2403140066, Valentin said.

We’re looking at any available vehicle” to avoid ACP’s upcoming “funding cliff,” said National Lifeline Association attorney John Heitmann. He pointed to “several opportunities,” including a long-sought Ukraine-Israel foreign aid package and spectrum legislation. The Senate-passed 2024 National Security Act foreign aid bill (HR-815) was specifically limited to aid for Israel, Taiwan and Ukraine rather than including unrelated provisions (see 2402070059). NaLA doesn’t “have a particular view on which” vehicle would be most viable, Heitmann told us. “We’re not picky at the moment.” The House-Senate USF working group is likely to provide a better opportunity or a long-term ACP funding source, he said.

It’s important … for folks in the public interest space to remain optimistic” about ACP’s future, Valentin told us. She sees significant “bipartisan support” for the ACP Extension Act (HR-6929/S-3565), which calls for $7 billion in funding for FY24 (see 2401100056). HR-6929 had 217 House backers Thursday afternoon. Congress’ lack of progress in allocating stopgap money is “a political thing,” said Levin, who’s also a Brookings Institution senior fellow. “There is zero doubt that if a bill” funding ACP “were to go to the floor, it would pass” the House. The “only reason it hasn’t already is because” Speaker Mike Johnson, R-La., “won’t let it come to the floor,” Levin said.