Tribal-area wireless provider Smith Bagley asked the FCC to temporarily provide expanded monthly tribal Lifeline benefits of $25 to $65.75 to make up for the loss of funding as the affordable connectivity program expires. “Over 329,000 Tribal households currently receive ACP discounts, including residents living in remote rural areas that have poverty rates many times the national average,” said a petition posted Monday in docket 11-42: The loss of tribal ACP funding "will have devastating impacts as many residents will find high-quality broadband connections to be priced out of their reach, with few or no options to connect.” Smith Bagley also reported on a call with an aide to FCC Commissioner Anna Gomez on the proposed 5G Fund. It emphasized that the upcoming Tribal 5G Fund auction mechanism “must treat remote Tribal lands as a special case to ensure that these highest-cost areas are not excluded from receiving support as a result of an auction process,” said a filing in docket 20-32. The firm “discussed the extraordinary costs that the company faces in accessing fiber backhaul to its towers, 90% of which are today served by microwave. Without fiber, it will be difficult to meet the Commission’s 5G Fund auction performance requirements.”
Affordable Connectivity Program (ACP)
What is the Affordable Connectivity Program (ACP)?
The Affordable Connectivity Program was a recently expired subsidy for low-income households to lower the cost of purchasing broadband internet and connected devices. The program was signed into law as part of the 2021 Infrastructure Investment and Jobs Act and administered by the FCC up until June 1, 2024, due to expiration of the ACP’s funding.
Will the ACP Return?
Congress continues to debate restoring ACP funding, with immediate next steps likely to come from the Senate Commerce Committee or Congressional discussions on revising the Universal Service Fund.
President Joe Biden called out congressional Republicans Saturday for Capitol Hill's failure so far to allocate stopgap funding for the FCC's ailing affordable connectivity program. The funding would keep ACP running through the end of FY 2024. Congress approved the Further Consolidated Appropriations Act FY 2024 minibus spending package last month without ACP money (see 2403210067). Advocates are eyeing other vehicles for appropriating the funding ahead of ACP's existing allocation running out in May (see 2403280001). “For months, I've called on Congress to extend the program,” but “Republicans in Congress still haven't acted, putting millions of their own constituents in a position where their internet costs could go up -- or they could lose connection altogether,” Biden tweeted. He proposed an additional $6 billion for ACP in an October supplemental domestic Appropriations request (see 2310250075). Republicans "have called the program ‘wasteful,’ and now threaten to cut it,” Biden said: “We can't let that happen” given it has “helped over 23 million households save $30-$75 each per month on their monthly internet bills.” House Commerce Committee ranking member Frank Pallone, D-N.J., later echoed Biden, tweeting “House Republicans are playing political games and refusing to extend this vital program before it runs out of funding.”
The FCC's digital discrimination rules might inadvertently bar ISPs from offering discounted service to low-income subscribers, Phoenix Center co-founder/Chief Economist George Ford wrote Wednesday for the Yale Journal on Regulation. He said Congress in response needs to drop or rewrite the Infrastructure Investment and Jobs Act (IIJA) Section 60506, which prohibits digital discrimination of broadband access "based on the protected classes limited to income level," including requiring services to be offered on “comparable terms and conditions." Section 60506 seeks to prevent any differentiation in price based on income, so a lower price offered only to lower-income households "could be legitimately argued to be prohibited discriminatory conduct under the FCC’s rules," he said. The affordable connectivity program plans offered today, the low-cost plans offered by ISPs prior to ACP, and the low-cost offerings required by the broadband equity, access and deployment program seem "to constitute a prima facia case of prohibited discrimination under the plain terms of the IIJA and the FCC's rules," he said.
The FCC’s Consumer Advisory Committee, which will have a special focus on AI, held its first meeting under its new charter Thursday at FCC headquarters. Chairwoman Jessica Rosenworcel said the FCC eagerly awaits the group’s work on AI and robocalls. The group also heard reports from FCC staff about several consumer issues before the agency, including the affordable connectivity program's demise (see 2404020075). CAC last met in August (see 2208300059).
FCC Chairwoman Jessica Rosenworcel re-emphasized the potential impact of affordable connectivity program funding exhaustion in letters Tuesday to Senate Commerce Committee Chair Maria Cantwell, D-Wash., Senate Appropriations Financial Services Subcommittee Chairman Chris Van Hollen, D-Md., and other congressional leaders. Cantwell and other lawmakers are eyeing ways they can allocate stopgap funding that would keep ACP running through the rest of FY 2024. Congress approved the Further Consolidated Appropriations Act minibus spending bill last month without that money (see 2403280001). Rosenworcel warned lawmakers Tuesday that notices from the Universal Service Administrative Co. and ISPs warning participants that April would be the last month of a full ACP subsidy may be sent when many committee members "are at home in their districts and hearing from their constituents about the benefits of the ACP.” She attached data to each letter outlining “the number of enrolled ACP households in each state, territory, and congressional district.” Press reports about ACP participants’ reactions to the program’s potential end “echo" what the commission has heard "from ACP households directly, with many writing the agency to express their distress and fear that ending this program could lead them to lose access to the internet at home,” Rosenworcel said. “In what is perverse, both rural and Tribal communities will likely see new broadband deployment in remote areas” via funding from the 2021 Infrastructure Investment and Jobs Act, “but persistent challenges with cost -- absent the ACP -- may limit the ability of this investment to close the digital divide.” The FCC “remains ready to keep this program running, should Congress provide additional funding,” she said: “We have come too far to allow this successful effort to promote internet access for all to end.”
Pointing to Comcast's broadband business facing headwinds due to fixed wireless and fiber competition and the discontinuation of the affordable connectivity program, Deutsche Bank Research said Monday it was lowering the cabler's stock price target by $2, to $53. In a note to investors, an analyst said it was upping Comcast's 2024 broadband subscriber loss forecast by 285,000, to 435,000, mostly due to ACP-related churn: It's assuming 15% of Comcast's roughly 1.4 million ACP subscribers will disconnect without the subsidy, costing Comcast 210,000 subs across Q2 and Q3.
The California Public Utilities Commission will audit carriers for compliance with the state’s April 2023 shift to connections-based contribution to universal service public purpose programs. In a Wednesday ruling, CPUC Administrative Law Judge Hazlyn Fortune directed the agency's utility audit branch to ensure carriers are reporting and remitting the surcharge in a reasonable manner and as directed in the CPUC's October 2022 decision (docket R.21-03-002). T-Mobile has resisted the contribution mechanism change in the courts (see 2310170042). In a separate ruling Wednesday, ALJ Robyn Purchia clarified that California LifeLine pilot programs using federal affordable connectivity program (ACP) funds will continue through at least May 31. "If the ACP receives additional federal funding, the pilot programs may continue up to June 8, 2025," said the ALJ: If the ACP doesn't receive more funding by April 30, providers must notify California LifeLine customers by May 1 "that their service may be discontinued or otherwise changed."
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.
House Commerce Committee ranking member Frank Pallone (N.J.), Communications Subcommittee ranking member Doris Matsui (Calif.) and 10 other subpanel Democrats urged NTIA Administrator Alan Davidson Tuesday "to continue to prioritize affordability in your administration of" the $42.5 billion broadband equity, access and deployment (BEAD) program as the agency reviews states' plans for the money. The Democrats wrote Davidson days after Congress approved the Further Consolidated Appropriations Act FY 2024 minibus spending package without hoped-for stopgap money for the FCC's affordable connectivity program or Secure and Trusted Communications Networks Reimbursement Program (see 2403210067). "Access to internet service is meaningless to consumers if the cost of signing up is a barrier,” the lawmakers said in their letter. “Studies show that nearly half of all broadband non-adopters cited cost as the primary reason they did not have home internet service." The 2021 Infrastructure Investment and Jobs Act, which created ACP and BEAD, "includes separate affordability provisions that are specific to the BEAD program," the lawmakers said: "Congress decided to allocate BEAD funds to states and territories since they are best situated to determine the needs of their communities, but it did not change any existing authority to oversee broadband or pricing." NTIA has "administrative oversight and programmatic support responsibilities to ensure the funds would be spent consistent with Congressional intent, including the review and approval of proposals after significant consultation between the state or territory and NTIA," the Democrats said. "These are critical procedures for NTIA to follow in determining whether low-cost plans are in fact affordable for the areas and markets where they are proposed." It "would be a significant missed opportunity in the administration of BEAD if these affordability provisions are not exercised to their fullest to help middle-class and low-income Americans afford the cost of internet service, consistent with the statute," the lawmakers said. Congressional Republicans have criticized NTIA's reviews of state plans' affordability provisions as a form of rate regulation (see 2312180063).
Senate Commerce Committee Democrats and Republicans who back allocating an additional $3.08 billion for the FCC’s Secure and Trusted Communications Networks Reimbursement Program and stopgap funding for the commission’s ailing affordable connectivity program used a Thursday spectrum-focused hearing (see 2403210063) to vent about the Hill's failure thus far to address either priority. The Further Consolidated Appropriations Act FY 2024 minibus spending bill, which congressional leaders released early Thursday morning as an amendment to legislative vehicle HR-2882, as expected (see 2403190062) includes neither ACP nor rip-and-replace funding.