Affordable Connectivity Program (ACP)

Rep. Yvette Clarke, D-N.Y., is circulating a discharge petition (H.Res. 1119) in a bid to force a floor vote on her Affordable Connectivity Program Extension Act (HR-6929/S-3565), which would appropriate $7 billion to keep the ailing FCC broadband fund running through the end of FY 2024. Clarke's petition will likely help ACP backers in their push to advance the funding proposal out of the lower chamber and amplify pressure on Congress to act before the program's current money runs out in the coming weeks, lobbyists told us. Advocates acknowledge they still face headwinds in the Senate, where leaders continue eyeing alternative vehicles for the appropriation. Congress approved the Further Consolidated Appropriations Act FY 2024 minibus spending package last month without ACP money (see 2403280001).

Affordable connectivity program providers will be reimbursed up to $14 for providing the benefit to nontribal households next month, said an FCC Wireline Bureau public notice Tuesday in docket 21-450 (see 2403040077). ISPs will also be reimbursed up to $35 for serving tribal households and up to $47 for connected devices.

Hotwire Communications asked the FCC to abandon its proposal for banning bulk billing arrangements between ISPs and apartment buildings (see 2403050069). Hotwire noted in an ex parte filing posted Tuesday in docket 17-142 that it discussed with Wireline Bureau staff challenges consumers faced when they attempted to apply their affordable connectivity program benefit to a service offered through bulk billing. The company said the difficulties are due to "flaws in the ACP rules," suggesting the FCC amend its rules to "facilitate greater use of ACP discounts where bulk billing arrangements are present" should the program be replenished. Hotwire also asked the commission to consider the item during a commissioners' meeting. "This would enable the public to review and provide input on the draft rulemaking for three weeks prior to the vote," Hotwire said.

President Joe Biden called out congressional Republicans Saturday for Capitol Hill's failure so far to allocate stopgap funding for the FCC's ailing affordable connectivity program. The funding would keep ACP running through the end of FY 2024. Congress approved the Further Consolidated Appropriations Act FY 2024 minibus spending package last month without ACP money (see 2403210067). Advocates are eyeing other vehicles for appropriating the funding ahead of ACP's existing allocation running out in May (see 2403280001). “For months, I've called on Congress to extend the program,” but “Republicans in Congress still haven't acted, putting millions of their own constituents in a position where their internet costs could go up -- or they could lose connection altogether,” Biden tweeted. He proposed an additional $6 billion for ACP in an October supplemental domestic Appropriations request (see 2310250075). Republicans "have called the program ‘wasteful,’ and now threaten to cut it,” Biden said: “We can't let that happen” given it has “helped over 23 million households save $30-$75 each per month on their monthly internet bills.” House Commerce Committee ranking member Frank Pallone, D-N.J., later echoed Biden, tweeting “House Republicans are playing political games and refusing to extend this vital program before it runs out of funding.”

Tribal-area wireless provider Smith Bagley asked the FCC to temporarily provide expanded monthly tribal Lifeline benefits of $25 to $65.75 to make up for the loss of funding as the affordable connectivity program expires. “Over 329,000 Tribal households currently receive ACP discounts, including residents living in remote rural areas that have poverty rates many times the national average,” said a petition posted Monday in docket 11-42: The loss of tribal ACP funding "will have devastating impacts as many residents will find high-quality broadband connections to be priced out of their reach, with few or no options to connect.” Smith Bagley also reported on a call with an aide to FCC Commissioner Anna Gomez on the proposed 5G Fund. It emphasized that the upcoming Tribal 5G Fund auction mechanism “must treat remote Tribal lands as a special case to ensure that these highest-cost areas are not excluded from receiving support as a result of an auction process,” said a filing in docket 20-32. The firm “discussed the extraordinary costs that the company faces in accessing fiber backhaul to its towers, 90% of which are today served by microwave. Without fiber, it will be difficult to meet the Commission’s 5G Fund auction performance requirements.”

The FCC’s Consumer Advisory Committee, which will have a special focus on AI, held its first meeting under its new charter Thursday at FCC headquarters. Chairwoman Jessica Rosenworcel said the FCC eagerly awaits the group’s work on AI and robocalls. The group also heard reports from FCC staff about several consumer issues before the agency, including the affordable connectivity program's demise (see 2404020075). CAC last met in August (see 2208300059).

The FCC's digital discrimination rules might inadvertently bar ISPs from offering discounted service to low-income subscribers, Phoenix Center co-founder/Chief Economist George Ford wrote Wednesday for the Yale Journal on Regulation. He said Congress in response needs to drop or rewrite the Infrastructure Investment and Jobs Act (IIJA) Section 60506, which prohibits digital discrimination of broadband access "based on the protected classes limited to income level," including requiring services to be offered on “comparable terms and conditions." Section 60506 seeks to prevent any differentiation in price based on income, so a lower price offered only to lower-income households "could be legitimately argued to be prohibited discriminatory conduct under the FCC’s rules," he said. The affordable connectivity program plans offered today, the low-cost plans offered by ISPs prior to ACP, and the low-cost offerings required by the broadband equity, access and deployment program seem "to constitute a prima facia case of prohibited discrimination under the plain terms of the IIJA and the FCC's rules," he said.

FCC Chairwoman Jessica Rosenworcel re-emphasized the potential impact of affordable connectivity program funding exhaustion in letters Tuesday to Senate Commerce Committee Chair Maria Cantwell, D-Wash., Senate Appropriations Financial Services Subcommittee Chairman Chris Van Hollen, D-Md., and other congressional leaders. Cantwell and other lawmakers are eyeing ways they can allocate stopgap funding that would keep ACP running through the rest of FY 2024. Congress approved the Further Consolidated Appropriations Act minibus spending bill last month without that money (see 2403280001). Rosenworcel warned lawmakers Tuesday that notices from the Universal Service Administrative Co. and ISPs warning participants that April would be the last month of a full ACP subsidy may be sent when many committee members "are at home in their districts and hearing from their constituents about the benefits of the ACP.” She attached data to each letter outlining “the number of enrolled ACP households in each state, territory, and congressional district.” Press reports about ACP participants’ reactions to the program’s potential end “echo" what the commission has heard "from ACP households directly, with many writing the agency to express their distress and fear that ending this program could lead them to lose access to the internet at home,” Rosenworcel said. “In what is perverse, both rural and Tribal communities will likely see new broadband deployment in remote areas” via funding from the 2021 Infrastructure Investment and Jobs Act, “but persistent challenges with cost -- absent the ACP -- may limit the ability of this investment to close the digital divide.” The FCC “remains ready to keep this program running, should Congress provide additional funding,” she said: “We have come too far to allow this successful effort to promote internet access for all to end.”

Pointing to Comcast's broadband business facing headwinds due to fixed wireless and fiber competition and the discontinuation of the affordable connectivity program, Deutsche Bank Research said Monday it was lowering the cabler's stock price target by $2, to $53. In a note to investors, an analyst said it was upping Comcast's 2024 broadband subscriber loss forecast by 285,000, to 435,000, mostly due to ACP-related churn: It's assuming 15% of Comcast's roughly 1.4 million ACP subscribers will disconnect without the subsidy, costing Comcast 210,000 subs across Q2 and Q3.

Advocates of the FCC’s affordable connectivity program and Secure and Trusted Communications Networks Reimbursement Program believe funding for both priorities remains available this year, despite Congress having omitted funding in the Further Consolidated Appropriations Act FY 2024 minibus spending package enacted last week (see 2403210067). Program backers acknowledge funding will be more difficult as the FY24 package was their best opportunity. They also admit appropriations politics will only prove trickier with Capitol Hill hunkering down for the 2024 election campaign.