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Senators introduced an amendment to the FAA reauthorization that would give the ACP an additional $6 billion
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New Street says for the first time, “there is a material chance that an ACP extension happens.”
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If passed, ACP would undergo some modifications
UPDATE 5/10/2024: The Senate on Thursday passed the FAA reauthorization bill without the ACP amendment attached.
NSR's Blair Levin said in a note the Senate's decision was "consistent with what we have been hearing about the reluctance of the Senate leadership to allow non-germane amendments to the FAA bill." Congress may introduce the amendment as standalone legislation, which has "some, but not high odds."
A standalone bill would likely pass the Senate, but "we still think it has significant issues in the House," Levin wrote.
Original story published on 5/8/2024 follows.
We’re seeing a faint glimmer of hope for the U.S. government’s Affordable Connectivity Program (ACP).
A group of U.S. senators on Tuesday introduced a bipartisan amendment to the Federal Aviation Administration (FAA) reauthorization, a bill that Congress is aiming to pass before the agency’s operating authority expires at the end of Friday, May 10.
The FAA amendment would allocate $6 billion in funding for the ACP – somewhat less than what Congress proposed for the $7 billion ACP Extension Act – as well as make a few tweaks to the program.
If passed, the amendment would reduce ACP eligibility by income from 200% of the federal poverty line to 135%, which is the eligibility threshold for the FCC’s Lifeline program.
It would also eliminate the ACP’s alternative verification process. ISPs with their own discounted internet plans have had the option to verify ACP applicants themselves, instead of making consumers apply through the government’s National Verifier system.
Other tweaks include repealing the ACP’s device subsidy, eliminating ACP eligibility through the U.S. Department of Agriculture’s Community Eligibility Program and a provision that allows the FCC to update eligibility rules within 180 days of enactment.
May marks the last month of ACP, with the monthly subsidy now worth $14 instead of $30 for non-tribal households. A number of ISPs have already come forth with ACP alternatives, such as paying out-of-pocket for customers’ ACP benefits themselves or enrolling customers into their own discounted internet plans.
“While there remains uncertainty about the fate of this amendment and the FAA reauthorization process, for the first time we think there is a material chance that an ACP extension happens,” said New Street Research analyst Blair Levin in a note to investors.
Levin added if the amendment passes, it will set up “a ticking clock” for Congress to adopt Universal Service Fund (USF) reforms that “would put the ACP (and the rest of the USF system) on a sustainable framework.”
Gigi Sohn, executive director for the American Association for Public Broadband (AAPB), called on the Senate “to move quickly to add this amendment” to prevent the 23 million households on ACP from losing internet access.
“This amendment demonstrates that Congress can put politics aside. The Senate should move quickly so this extremely popular program can continue,” said Sohn in a statement. “By doing so, Congress would give themselves and the FCC time to start the process of reforming the Universal Service Fund so it can provide a permanent funding mechanism for low-income families to get and stay connected.”
Kathryn de Wit, director of Pew’s broadband access initiative, also voiced her support for the FAA amendment.
“With millions of people lacking access to a service that has become essential for quality of life and economic well-being, the time to act is now,” she said in a statement to Fierce Network.
Joe Kane, director of broadband and spectrum policy at ITIF, told Fierce, “This is the most united, bipartisan effort to extend ACP yet.”
“If ACP survives the month, this is the vehicle that will do it,” he said.
However, Kane noted it’s “disappointing” that the proposed amendment reduces ACP eligibility “so dramatically” and removes the device credit. It also remains to be seen how the ACP amendment fits into the FAA bill, as the latter “has its own quirks.”
“Compromise was always going to be necessary in the current political climate, however,” he said. “The core of ACP as a direct subsidy targeted at those for whom affordability is a barrier to broadband adoption, would remain intact.”
And even if the amendment does pass, the appropriated funding will likely last a year. So, “this is not the end of the ACP saga.”