Lack of Affordable Connectivity Fund Money Could Hobble Broadband Deployment: Experts

WASHINGTON, June 20, 2023 – Experts are pushing Congress to extend the funding available to the Affordable Connectivity Program or else it will hamper efforts to build out infrastructure in other parts of the country.

The essence of the argument is that the $14.2-billion ACP, which provides a $30- and $75-per month subsidies to low-income Americans, is helping internet service providers with revenues used to build more infrastructure in underserved areas. But experts are warning that the ACP – which currently enrolls about 18.5 out of 48 million eligible Americans – could run out of money as soon as early 2024, which observers have said could affect private investment in broadband deployment.

Kathryn de Wit, broadband program director of Pew Charitable Trusts, said at a Wednesday event hosted by think tank New America that the ACP is a crucial link supporting other federal grants aimed to accelerate nationwide broadband deployment, including the $10-billion Capital Project Fund and the $42.5-billion Broadband Equity, Access, and Deployment program.

“This is the first time we’re seeing these deployment grants make a specific requirement for recipients to actually include and participate in an affordability program,” said Kathryn. “They are trying to stabilize revenue for internet service providers who are connecting areas that might not offer a high return on investment.”

This funding from the ACP would provide the groundwork for a decade-long investment in internet infrastructure, according to Jonathan Cannon, technology policy counsel at think tank R Street Institute.

“We’ve got one program here that’s getting people connected, getting people access, driving markets, driving deployments,” said Cannon.

Joshua Stager, policy manager at the advocacy group Free Press, echoed the importance of affordability in broadband deployment efforts.

“It was a core requirement because as much as BEAD and CPF are focused on access and building out networks to unserved areas, those networks if they are unaffordable, they’re not really gonna work,” said Stager.

The discontinuation of ACP funding could also spell disaster for households already dependent on the subsidy, potentially leading to financial distress, debt accumulation, and long-term damage to their credit scores, warned Stager.

Amid discussions on prolonging the financial viability of ACP, proposals have emerged advocating for the utilization of the Universal Service Fund—a roughly $9-billion annual program dedicated to bolstering essential telecommunication services. However, the fund’s sustainability has been under pressure as the growing prevalence of broadband services among Americans has led to a decline in voice service revenues, which is the primary driver of the USF.

Despite a lack of definitive solutions, panelists strongly urged Congress to prioritize the replenishment of ACP as an urgent bipartisan matter, emphasizing the need for a solution that will have a lasting impact for future generations.

“Having access to affordable and accessible broadband is a civil right and it’s one that we need to continue to fund and to save,” said Anita Banerji, senior program director to the Leadership Conference on Civil and Human Rights.

CORRECTION: A previous version of this story incorrectly spelled the name of Anita Banerji. This version also clarifies that Banerji is the senior program director to the Leadership Conference on Civil and Human Rights.