Members of the congressional Universal Service Fund revamp working group are considering whether, and how much, the 5th U.S. Circuit Court of Appeals' ruling will affect their rollout of a framework for overhauling the program. The court ruled last week that the FCC's USF contribution factor is unconstitutional (see 2407240043). Experts believe lawmakers will likely factor the ruling into the framework, but it could be moot should the U.S. Supreme Court reverse the decision on appeal (see 2407260044). Uncertainty about USF’s future will likely extend the working group’s already lengthy process, lobbyists told us.
Affordable Connectivity Program (ACP)
What is the Affordable Connectivity Program (ACP)?
The Affordable Connectivity Program was a recently expired subsidy for low-income households to lower the cost of purchasing broadband internet and connected devices. The program was signed into law as part of the 2021 Infrastructure Investment and Jobs Act and administered by the FCC up until June 1, 2024, due to expiration of the ACP’s funding.
Will the ACP Return?
Congress continues to debate restoring ACP funding, with immediate next steps likely to come from the Senate Commerce Committee or Congressional discussions on revising the Universal Service Fund.
Latest News on the Affordable Connectivity Program
Kentucky Gov. Andy Beshear and North Carolina Gov. Roy Cooper possess the best telecom policy credentials among the main contenders to be the Democrats’ vice presidential nominee, broadband advocates and other policy observers told us. All the contenders hold broadly similar views to Vice President Kamala Harris on broadband and telecom policy matters, but could bring different perspectives to the ticket, experts said in interviews last week.
Wisconsin Gov. Tony Evers (D) said Friday he will ask the legislature to spend more on broadband in the next state budget. Evers made the announcement as his broadband task force released its fourth annual report. Spending $345 million in state and federal funds for broadband since 2019 has brought Wisconsin a broadband adoption rate of about 88%, the report said. “Through our investments, more than 410,000 homes and businesses will be connected to new or improved high-speed internet service, but as this report shows, we've got more work to do,” said Evers. The report’s recommendations include continued state spending on broadband, more workforce training, streamlined permitting and locating processes and greater coordination with tribes and localities. To fill the gap the end of the federal affordable connectivity program (ACP) left, the task force recommended creating “a state internet assistance program to increase broadband affordability and adoption.”
Charter Communications' internet subscriber numbers took a hit in Q2 from June's expiration of the affordable connectivity program, the company said Friday. It followed Comcast saying ACP wasn't a big weight yet but is expected to be a notable drag in Q3.
Verizon lost 410,000 prepaid wireless customers tied to the end of the affordable connectivity program in Q2, the company said Monday as it became the first major wireless carrier to report earnings since the impact of ACP's demise could be measured. Overall prepaid customer losses were 624,000. But Verizon also gained a net 148,000 postpaid customers, which beat expectations. Revenue of $32.8 billion just missed consensus estimates. Though most numbers were positive, Verizon was down 6.08% to $39.09 for the day.
Former President Donald Trump’s selection of Senate Commerce Committee member Sen. J.D. Vance, R-Ohio, as his running mate puts a backer of additional funding for the FCC’s lapsed affordable connectivity program on the presidential ticket of a party that has many members who criticized the initiative. Vance is lead Senate GOP co-sponsor of the ACP Extension Act (HR-6929/S-3565) and subsequent Secure and Affordable Broadband Extension Act (S-4317). Both propose giving the affordability program billions of dollars in stopgap funding for FY 2024 (see 2401100056). Vance also helped lead an unsuccessful bid to include $6 billion in ACP funding in May as part of the 2024 FAA Reauthorization Act (see 2405090052). Vance, a freshman senator, opposed former-FCC nominee Gigi Sohn and Commissioner Anna Gomez during their confirmation processes last year (see 2307120073).
States hope they can increase federal engagement on telecom no matter who is president in 2025, current and former state utility commissioners said in interviews. In a possible second Donald Trump presidency, “the states and localities are really going to be where broadband policy is made,” predicted Gigi Sohn, Benton Institute for Broadband & Society senior fellow. Some said there is a lot of uncertainty about how a Trump administration might change rules for state grants under NTIA’s $42.5 billion broadband equity, access and deployment (BEAD) program.
The FCC Enforcement Bureau removed K20 Wireless and its CEO, Krandon Wenger, from the commission's list of providers participating in the affordable connectivity program. In addition, it barred them from participating in any successor program. On Tuesday, the bureau denied K20 and Wenger's request to stay its removal order following a May order claiming they "engaged in serious, willful misconduct in violation of multiple ACP rules." In an investigation, the bureau found K20 "changed the non-tribal residential addresses associated with subscribers to false addresses on tribal lands when it transferred the subscribers to its ACP service." Providers receive a greater subsidy when tribal households are offered the benefit. A proposed $8 million fine was not imposed in the removal order (see 2405100032).
The U.S. Supreme Court’s June decision in Loper Bright Enterprises v. Raimondo that overruled the Chevron doctrine (see 2407010036) will likely heavily influence discussion during a House Communications Subcommittee hearing Tuesday on the commission’s FY 2025 funding request, congressional aides and lobbyists told us. Chevron gave the FCC and other federal agencies deference in interpreting federal laws. Republican FCC Commissioner Brendan Carr is urging the commission ahead of the House hearing to drop a planned July 18 vote on a draft order and Further NPRM letting schools and libraries use E-rate support for off-premises Wi-Fi hot spots in response to the ruling. The hearing will begin at 10 a.m. in 2123 Rayburn.
California state senators pushed back on two digital equity bills Tuesday. Multiple Communications Committee members during a livestreamed hearing raised concerns about the Assembly-passed AB-2239, which would ban digital discrimination as the FCC defines it. Also, the committee scaled back the Assembly-approved AB-1588, which had proposed to update the California LifeLine subsidy program to support broadband for low-income households. The committee directed the LifeLine bill’s sponsor to find a compromise with industry opponents and other stakeholders over the summer recess that runs from July 3 to Aug. 5.