The White House requested $6 billion from Congress to ensure the continuation of the Affordable Connectivity Program (ACP), which offers free or discounted high-speed internet to qualifying households – and is in danger of running out of money next year.
The new funding proposal from the Biden Administration is part of a $56 billion supplemental domestic budget request for "critical domestic priorities," including childcare, disaster relief and energy independence. Regarding the ACP, the Administration called for “additional funds to strengthen the program by extending free and discounted high-speed internet for eligible households through December 2024.”
Industry groups have been quick to commend the proposed funding, including statements from NTCA–The Rural Broadband Association, the Fiber Broadband Association, the Benton Institute for Broadband & Society, US Telecom, INCOMPAS, National Lifeline Association (NaLA) and the National Digital Inclusion Alliance (NDIA).
Worries over the program’s future have become increasingly urgent over the year, as experts have indicated that the ACP is likely to run out of money sometime in the spring of 2024.
“Kudos to the White House for including $6 billion in the domestic supplemental for the Affordable Connectivity Program, the monthly broadband subsidy for low-income, tribal and high-cost households,” said a statement from Gigi Sohn, the first executive director of the American Association for Public Broadband (AAPB). “While everyone, from ISPs to digital equity and low-income advocates, to veterans and underrepresented communities can rejoice, it will still take a lot of work to ensure that this becomes law, and to ensure that the ACP has a forever home in the FCC's Universal Service Fund.”
Indeed, the proposed package will still need to get through a divided Congress.
In a note today New Street Research Policy Analyst Blair Levin said that the Administration’s request is a “positive step for ACP and the ISPs,” but noted “there are still too many uncertainties about the budget process ahead to have confidence that the ACP program will be re-funded and sustained.”
While businesses, such as Verizon and Charter, support ACP funding, Levin said, “There's uncertainty about the program's future beyond the upcoming election,” which could impact state planning and non-subsidized network upgrades from copper to fiber.
“At least we now have a functioning house and can expect a budget process to commence in the next few days. But the parameters of that process are unclear. There are positive indicators for the ACP, but the budget process is so fraught, every new request faces hurdles,” Levin wrote.
Levin pointed out that many Republicans, including Speaker Michael Johnson and the number two House Republican Steve Scalise, represent districts with high numbers of ACP enrollees, with 29% and 21% of households respectively. Nonetheless, he suggested that these leaders may prioritize national party interests over constituent concerns.
The Administration also asked Congress last week for $106 billion in emergency funding that would include aid to Israel and Ukraine. Levin said these national security budget proposals “will start with more bi-partisan support than the domestic recommendations.”
The Administration domestic recommendations such as the ACP could “probably receive bi-partisan majorities,” but Levin expressed doubt those provisions will receive a clean vote.
“The odds of a December 2024 deal to assure that households are not cut off just before Christmas are not high,” he said. “Still, it is far better for the prospects of ACP to be on the table, and put there by the White House, than to not be part of the debate.”
Even if approved, Levin said the ACP request will only get the program past the next election, creating uncertainty for internet expansion through the Broadband Equity Access and Deployment (BEAD) program and other ISP deployments.
The American Civil Liberties Union (ACLU) joined other groups in support for the requested funding. However, the ACLU’s statement said it is “concerned that $6 billion is not quite enough. We urge Congress to act quickly to appropriate at least $7 billion, so that their constituents can stay connected throughout next year’s holiday season, and, ideally, beyond."
Experts estimate that nearly 40% of U.S. households are eligible for the ACP discount. However, nearly two years after the program was started, some have gauged that half of all households eligible for the ACP internet subsidy are still unaware of the benefit.
Former FCC lawyer Diane Holland has said as the Federal Communications Commission (FCC) works to get the word out about ACP, more eligible households will sign up for the subsidy.
“And that is going to deplete the funding even more quickly than it's currently being depleted,” Holland told Fierce earlier this year. “It's a great thing that more people are learning about the program, but it also brings about a more dire need to get more funding in the program.”