Affordable Connectivity Program (ACP)

Tuesday marks the last day that eligible households enrolled in the affordable connectivity program will receive full funding, Miriam Montgomery, chief of the FCC Consumer and Governmental Affairs Bureau’s Consumer Affairs and Outreach Division, noted during a National Association of Telecommunication Officers and Advisors webinar on Monday. The webinar also included an update on the national broadband map.

Federal law doesn't preempt New York state’s Affordable Broadband Act (ABA), the 2nd U.S. Circuit Court of Appeals decided Friday. In a 2-1 opinion, the court reversed the U.S. District Court for Eastern New York, which had barred the state from enforcing the 2021 Affordable Broadband Act (ABA). The ABA required $15 monthly plans providing 25 Mbps download and 3 Mbps upload speeds for qualifying low-income households.

HOT SPRINGS, Virginia -- Expect increasingly heated clashes in coming years between factions advancing exclusive use of spectrum and those supporting spectrum sharing, as well as policy discussions about USF contribution changes, aides to the FCC commissioners said Friday at the FCBA annual seminar here. Meanwhile, AI experts said that in the absence of congressional action they see the FTC and states becoming vigorous in regulating generative AI.

T-Mobile is considering how to use its growing fiber footprint to further bolster its Home Internet base, CEO Mike Sievert said on a call with investors late Thursday. T-Mobile earlier in the day unveiled a joint venture with infrastructure investor EQT (see 2404250047).

Sen. Ed Markey of Massachusetts and four other Senate Democrat caucus members wrote CTIA President Meredith Baker and NCTA CEO Michael Powell Friday urging their member companies to voluntarily cover a $16-per-household affordable connectivity program subsidy shortfall for participants in May. The FCC indicated earlier this month that the remaining ACP funds will be enough to pay only $14 of the usual $30 subsidy per participating household in May (see 2404100082). Committing to closing the $16-per-household shortfall “would help maintain subscribers in May, who might otherwise leave the program when faced with even the smallest price increase, while Congress continues to work on a legislative solution to this problem,” the Democrats said in a letter to Baker and Powell. “With both the Senate and House of Representatives in sessions for four weeks in May, this extra time would give lawmakers a critical window to work on and pass a legislative solution. Additionally, if Congress is able to extend the ACP, it would be devastating for ACP households that drop internet service during the period of lapsed funding, forcing them to re-enroll in the ACP, a process that can require significant time and expense.” Pro-ACP lawmakers are eyeing several potential vehicles for providing ACP with stopgap funding for FY 2024, including a proposed $5 billion loan via the draft Spectrum and National Security Act. The Senate Commerce Committee is set to mark up the measure Wednesday (see 2404250061).

The 9th U.S. Court of Appeals agreed with a lower court that denied preliminary injunction against the California Public Utilities Commission shifting to a per line surcharge for the state Universal Service Fund. T-Mobile’s Assurance Wireless had argued that the state must align with the FCC’s revenue-based method for federal USF. But on March 31 last year, the U.S. District Court for Northern California decided not to block the CPUC’s April 1 change. The 9th Circuit heard arguments on an appeal in October (see 2310170042). "The carriers have failed to show a likelihood of success on their claim that the access line rule is 'inconsistent with' the FCC rule,” Judge Ryan Nelson wrote in Friday’s opinion, which Judges Jacqueline Nguyen and Eugene Siler joined (case 23-15490). The court referred to the Communications Act's Section 254(f), which prohibits USF rules that are "inconsistent" with FCC rules. Inconsistent doesn’t mean different, Nelson wrote. "The access line rule differs from the FCC’s rule funding interstate universal service programs. But the carriers have not shown that it burdens those programs, and they have thus failed to show that they are likely to succeed on their claim that it is inconsistent with those rules." Also, the court rejected T-Mobile’s claim that the surcharge rule is preempted because it's inequitable and discriminatory. "The carriers argue that they are harmed more than local exchange carriers,” but the CPUC rule treats all telecom technologies “the same and, if anything, is more equitable than the prior rule, under which most of the surcharges came only from ever-dwindling landline services,” Nelson said. The CPUC’s "course correction" is "a fair response to a real problem,” he added. “In a world of ever-evolving telecommunications technologies, competitive neutrality must allow some play in the joints. To hold otherwise would hamstring California’s ability to satisfy its statutory mandate of providing universal service." T-Mobile also argued the change was discriminatory because the CPUC rule treats providers who get federal affordable connectivity program (ACP) support differently from those in the state LifeLine program. But the court found differences between the programs and noted that companies in ACP have the option of joining LifeLine. The decision "affirms that the CPUC's surcharge rule is consistent with federal law," said a commission spokesperson. "The CPUC will continue to utilize the surcharge to ensure consumers have safe, reliable, affordable, and universal access to telecommunications services." T-Mobile didn’t immediately comment.

The Senate Commerce Committee confirmed Thursday the panel plans to mark up the draft Spectrum and National Security Act and five other tech and telecom-focused bills during a Wednesday executive session, as expected (see 2404240074). The 108-page draft measure from committee Chair Maria Cantwell, D-Wash., would restore the FCC’s spectrum auction authority through Sept. 30, 2029, also as expected (see 2403210063). The proposal also provides a new vehicle for allocating stopgap funding for the commission’s ailing affordable connectivity program amid a delay in advancing a separate House-side bid to force a floor vote on providing that money, lobbyists told us.

California should “provide temporary bridge funding for two years through” the state LifeLine program to "mitigate harm to low-income consumers from" the impending end of the federal affordable connectivity program (ACP), consumer advocates said Tuesday at the California Public Utilities Commission. The Utility Reform Network and the CPUC’s independent Public Advocates Office sought “limited modifications” to an October 2020 CPUC decision on LifeLine-specific support amounts and minimum service standards. The groups proposed allowing LifeLine participants to temporarily apply state and federal low-income benefits to a standalone wireline broadband service, while the CPUC considers a long-term answer. Urging the CPUC to act quickly, the groups additionally filed a motion to halve the typical required time to respond to their petition to 15 days, which would make comments due May 8. The groups recently sought modification to other past CPUC decisions due to ACP expected end (see 2404230020). But the cable industry has raised concerns (see 2404230020).

AT&T added 349,000 net postpaid phone customers, which was far better than Wall Street expectations, and saw record low churn in Q1, CEO John Stankey said Wednesday as the carrier reported quarterly results. Stankey apologized for the nationwide wireless outage that hit customers Feb. 22 (see 2402220058). Compared to Verizon, whose shares sunk after it reported results Monday (see 2404220042), AT&T was up 1.88%, closing the day at $16.82.

The anticipated end of the Affordable Connectivity Program will bring big competition among broadband internet access service providers for low-income subscribers, according to telecommunications and wireless industry analysts. Multiple BIAS providers are already rolling out new low-cost offerings or pledging to temporarily subsidize ACP subscribers as they seek to capture or keep them. More providers will follow suit, we're told. With the last of its funding, ACP will provide a $14 reimbursement in May rather than the usual $30 (see 2404100082).