ACP Fallout: Wireline Retains Most, Wireless and Satellite Face Major Losses

WASHINGTON, Nov. 20, 2024 – Despite concerns over widespread disconnections following the expiration of a federal broadband subsidy program that served one-in-six U.S. households, a new study shows more than 90% of participants who subscribed to wireline broadband have remained connected. 

The analysis, authored by Blair Levin, a noted broadband policy analyst at New Street Research, revealed stark differences in retention trends among wireline, wireless, and satellite broadband providers in the now-expired Affordable Connectivity Program.

“It appears that the vast majority of those receiving the ACP subsidy for wireline have stayed on a broadband service even though the subsidy has gone away,” Levin said. “Over 90% of those who were receiving ACP subsidies and used the funding to connect to wireline broadband are still connected.”

This translates to roughly 10 million cable and fiber-optic customers who have maintained service, with total disconnections projected to affect only 7.2% of these subscribers by the end of the year.

In contrast, wireless ACP broadband subscribers, estimated at 13 million, saw significant fallout, with 70-80% – approximately 9-10 million subscribers – no longer maintaining service. Satellite providers fared even worse, losing over 90% of their ACP-supported customers

The ACP, which subsidized broadband access for low-income households, supported 23 million subscribers before its expiration on May 31, 2024. Policymakers feared the program’s end would trigger a wave of disconnections, with the Federal Communications Commission citing survey data showing that 77% of respondents anticipated losing their ACP benefit would disrupt their internet service, forcing them to either change their plan or drop service entirely. 

New Street’s findings, however, offer a more nuanced picture, showing that the impact of the program’s expiration varied dramatically depending on the type of broadband service. 

While overall retention of ACP-customers among wireline providers was strong, company-specific data revealed varying degrees of impact, with some providers weathering the expiration more effectively than others.

Among wireline providers, Charter suffered the largest losses, projecting a total decline of 355,000 ACP-supported subscribers. Of these, 50,000 disconnections were recorded in Q2 2024, with an additional 180,000 losses occurring during Q3 and another 125,000 anticipated by the end of Q4. Despite these figures, Charter continues to serve a massive ACP base of more than 4.5 million customers.

Comcast followed as the second-most impacted wireline provider, out of its 1.3 million total ACP customer base, Comcast expects a total loss of 96,000 ACP subscribers by year-end.

AT&T and Cox also faced declines. AT&T projected a total loss of 85,000 of its 1.1 million ACP subscribers, including 6,000 lost in Q2; 32,000 during Q3; and 47,000 anticipated in Q4. Cox expected to lose 52,000 of its 737,000 ACP participants, mostly distributed over the latter half of 2024.

Altice USA and Verizon projected comparatively smaller losses. Altice expected 18,000 ACP subscriber losses, while Verizon forecasted 15,000. At the program’s peak, Altice served a total of 130,000 ACP subscribers, and Verizon had 219,000 participants.

Smaller providers like Frontier, T-Mobile, Lumen, and TDS Telecom reported minimal losses due to relatively small ACP customer bases. Frontier projected a loss of 8,000 customers; T-Mobile expects 4,000; Lumen forecasts 2,000; and TDS Telecom anticipates losing 1,000. 

Consolidated Communications reportedly expects no ACP-related disconnections, likely due to its relatively small number of ACP subscribers – just 6,000.

Levin acknowledged the limitations of the data, stating, “We are not suggesting that these numbers are 100% accurate. For example, this data may not capture those ACP customers who had to change their broadband providers due to reasons such as moving. . .There likely was some churn associated with that in 1Q which isn’t quantifiable.”

He also noted that the wireless data may not be as reliable as the wireline data, reflecting challenges in accurately tracking wireless disconnections.