Internet assistance program cuts subsidy payments ahead of funding draught

Regulators and members of the telecom industry are ratcheting up the pressure on Congress to renew an expiring internet subsidy program, which just downgraded its monthly subsidies from $30 to $14 as it enters its final month of operation.

The Affordable Connectivity Program (ACP), which has helped subsidize internet access for as many as 23 million households since 2021, will fully cease providing financial support at the end of May if lawmakers fail to imbue the program with new funds, Federal Communications Commission Chair Jessica Rosenworcel said in a May 1 letter to House appropriators.

The program needs at least $6 billion to continue operating until the end of the year. Rosenworcel noted in her letter that “additional funding from Congress is the only near-term solution for keeping the ACP going.”

If nothing changes, more than three-quarters of participating households said they’ll have to change their internet plan or forgo service entirely, according to an FCC survey conducted in December. And new data from OpenSignal showed that the program has given low-income subscribers more market power, allowing them to compare the value of affordable plans among broadband providers—and switch plans accordingly.

So far, legislative attempts to extend the program have fallen flat. If passed, a bipartisan, bicameral extension bill could pay for the program through 2024, buying time for legislators to work out a longer-term funding solution. However, House Speaker Mike Johnson has not scheduled it for a floor vote, leading to a petition filed by Rep. Yvette D. Clarke in early April. If signed by a House majority, it would bypass Johnson and bring the bill to the floor for a full-chamber vote.

Sen. John Fetterman is trying another tack, with a bill introduced May 1 that would fold the ACP into the FCC’s Universal Service Fund, which already supports communications access efforts (even though many say it is unsustainable and in need of reform).

The trade group USTelecom advocated for this approach in a May 2 blog post, without specifically citing Fetterman’s bill. A Senate subcommittee held a hearing on Thursday to further discuss the future of the ACP and possible solutions.

In her letter, Rosenworcel noted that continuing to fund the ACP is important because it bolsters another of Congress’s goals: investing in telecom infrastructure through the Broadband Equity, Access, and Deployment Program (BEAD). She pointed out that legislators already allocated $42.5 billion to the cause through BEAD, which is now being distributed to states.

“The ACP helps ensure broadband service is affordable, which contributes to the sustainability of the newly deployed networks that will be built with this historic national investment. This in turn allows BEAD funding to stretch further and incentivizes provider participation in rural and other high-cost areas,” Rosenworcel wrote. “Conversely, by cutting the ACP now it will reduce the number of households that can afford service, raising the cost of networks supported by BEAD funding and threatening our shared goal of achieving internet for all.”