Unwillingness to Participate Still Plagues Broadband Deployment Programs: Experts

Only 20% of eligible participants have enrolled in Lifeline, said Georgetown business professor Tim DeStefano, noting that the number is similar for the Low Income Home Energy Assistance Program, which helps low-income families pay home energy bills. With a take rate of 43% in its later stages, the now-dead Affordable Connectivity Program (ACP) was more successful than most, he said.

The unwillingness of many to participate in subsidy programs has triggered lots of research, DeStefano said. Some people simply don’t know that the programs exist or how they could benefit, he said, and others don’t sign up if enrollment seems difficult and time-consuming. Many also see applying for benefits as carrying a “stigma” for their families, he said.

The larger providers with a presence across most parts of the U.S. drove ACP take rates, while smaller providers had little effect, DeStefano said. The FCC’s ACP outreach program ran out of money and seems to have had little effect on getting people to sign up, he added.

Scott Wallsten, president of the Technology Policy Institute, questioned current reform efforts on Capitol Hill. Just about every term, Congress puts out a call for comments on USF, and “lots of lawyers love it,” he said. “They get paid to write the same thing again and again.” There are a lot of interests tied to each USF program, and as a result, "they’re incredibly hard to change.”

Targeted efforts like vouchers tend to be more effective at getting people connected than broader subsidies, Wallsten said, adding that it also works better to address people rather than companies. People don’t like digital literacy classes, with one study showing that people will pay an extra $10 a month not to have to take training classes, he said. You have to consider “the value of a poor person’s time. They might be working multiple jobs.”

There's still not a good sense of price “elasticity” for broadband and how pricing affects decisions by low-income people to subscribe, Wallsten said. “That’s an important thing to know because it helps us predict what the effect of any program will be.”

ACP had problems, including the fact that “probably way too many people were eligible … which helped the money run out a lot faster,” Wallsten said. If you’re not giving money to people who are online only because of the subsidy, “you haven’t done anything for the digital divide.” Before ACP started, some ISPs were set to offer broadband at lower prices than what the program paid, he said. “A lot of the benefits went to ISPs, not the people necessarily.”

Wallsten called for policymakers to experiment. “We should be trying all kinds of things and be open to the results and implementing those results even when they’re not popular,” he said. That's “really easy to say and really hard to do.”

Top Economic Issue

Connecting the “heartland” of the U.S. to affordable broadband is “the No. 1 economic issue of our time,” said Angie Cooper, president of Heartland Forward, a think tank based in Arkansas. “You can’t do anything if you don’t have access to the internet or can’t afford that access.”

Cooper said her group launched an “old-school” outreach campaign with billboards, radio ads and flyers during the COVID-19 pandemic to explain the availability of broadband affordability initiatives, including the ACP and emergency broadband benefit program. Heartland was able to help 100,000 people sign up, she said. “We fed information back to the FCC to say, ‘Here’s what’s working in these local communities,’ because it’s got to be local. They’ve got to trust you to really engage.”

The Information Technology and Innovation Foundation, meanwhile, said in a Monday report that USF is too expensive, “prioritizes the wrong problems and funds it all with a high, sector-specific tax rate.” Congress should “reduce the overall size of the program and fund it with general revenue.” The current funding model is “ineffective,” the report said. “Consumers always bear most of the burden of taxes even when they are technically levied on companies.”

The ITIF report argued that private and federal investment have already closed the broadband deployment gap, and the government “should stop spending on obsolete, duplicative deployment programs.” Congress and the FCC should also eliminate the USF high-cost fund program “once current funding obligations are complete” and “stop subsidizing companies’ operating expenses,” ITIF said.