Read the rules for broadband deployment programs such as the Capital Projects Fund (CPF) or Broadband Equity Access and Deployment (BEAD) program and you’ll see a requirement for service providers receiving funding to participate in the low-income Affordable Connectivity Program (ACP). Yet the future of that program is uncertain.
The ACP pays up to $30 a month toward the cost of internet service for low-income households. The program was given a one-time infusion of $14.2 billion, which is expected to run out in 2024.
That’s a big problem for the BEAD program, said Kathryn de Wit, project director for the Broadband Access Initiative at Pew Charitable Trusts, on a recent webinar briefing with reporters.
The U.S. has set a goal of getting everyone in the country connected to affordable high-speed broadband and according to de Wit, both BEAD and ACP are necessary to reach that goal.
“While BEAD offers important and needed incentives [involving] capital costs, ACP balances that out by addressing long-term operational costs that can come with operating in [high-cost] areas,” she said.
In addition, she said, ACP eliminates the need for customers to repeatedly sign up and cancel service because they sometimes have trouble paying their bills. In other words, ACP “stabilizes and increases the revenue base” for providers, she said.
Without this stability, providers may not be willing to apply for CPF or BEAD funding or may need to scale back on anticipated matching funds, potentially threatening the ability of the programs to meet broadband deployment goals.
Blair Levin, senior fellow for the Metropolitan Policy Program at think tank Brookings Institution, shared a similar concern on a recent webinar organized by Broadband Breakfast. Investors are most willing to invest in new developments in low-income communities when the ACP is available because the program increases the estimated take rate, he said. Conversely, investors would be less likely to invest in the absence of the ACP.
Will ACP Get More Funding?
There is some language in the BEAD rules stating that providers’ participation in ACP successor programs would be suitable for meeting program requirements. But whether Congress will pass legislation to continue to fund the ACP or a successor program is unclear, particularly considering that the debt ceiling bill adopted several weeks ago contained various “clawbacks” on government funding programs.
One possible solution that could be quickly implemented as a stop gap measure would be to direct unspent funding originally allocated for COVID relief efforts to the ACP program, de Wit said.
That’s an idea that a bipartisan group of eight senators recently proposed in a letter sent to President Biden in late June. Signing the letter were Roger Wicker, Mike Crapo, Kevin Cramer, Thom Tillis, Shelley Moore Capito, J.D. Vance, James Risch, and Todd Young.
Also on the media briefing with de Wit was Angie Cooper, executive vice president of Heartland Forward, which calls itself a nonprofit nonpartisan “think and do tank” focused on economic renewal.
“Affordability is still the number one barrier” to getting everyone online, and ACP is critical to overcoming affordability problems, Cooper said.