Ryan Johnston: What Happens to BEAD Without the Affordable Connectivity Program?

Congress dedicated more than $42 billion to help states and companies build out broadband networks to all Americans. This program, called the Broadband Equity, Access, and Deployment Program, marked a crucial step towards bridging the digital divide in our nation. But this program will fail if Congress doesn’t renew the Affordable Connectivity Program that states are relying on to connect low-income Americans.

Bipartisan legislation from Congress made it clear that states needed to offer a low-cost broadband plan to residents to qualify for BEAD funding. For the uninitiated, the ACP is a $30-a-month subsidy that an eligible consumer can use towards any broadband plan a participating service provider offers.

In fact, many providers have started offering broadband plans at a $30 price point so the effective cost of broadband to the consumer is zero. Using ACP is an easy way for ISPs to meet the affordability requirement, a “short-hand” of sorts for them to offer affordable plans using an existing — and successful — model.

However, the ACP is expected to exhaust its funding in the first half of next year, leaving a potentially disastrous scenario for families who may have little savings or discretionary income. Ultimately allowing the ACP to end leaves a crucial question unanswered: what good are networks if people cannot afford to connect to them?

During a congressional oversight hearing in May, National Telecommunications and Information Agency Administrator Alan Davidson explained to Members of Congress that the BEAD program will be negatively impacted if continued funding for the ACP is not found. He emphasized that for low-income rural Americans, the ACP is the lifeline ensuring they can afford to access the internet. Without it, some providers may hesitate to deploy in rural areas over fear that the investment will be sustainable. Subscribership concerns may prove to be a limiting factor on which rural areas are served.

The ACP extends every BEAD dollar further. A study conducted by Common Sense Media found that the ACP could reduce the BEAD subsidy needed to incentivize providers to build in rural areas by up to 25% per year. According to the study, ACP reduces the per-household subsidy required to incentivize ISP investment by $500. Simply put, ACP improves the economic case because it 1) effectively lowers the cost of service, 2) creates a customer base with less churn, and 3) makes subscribers easier to acquire because of the massive public and private investment in raising awareness for the program.

But if the ACP is allowed to end, the federal government could end up overspending on every broadband deployment made through BEAD. This ultimately means BEAD networks will fail to connect millions of Americans.

The ACP is more than a simple affordability program; for over 21 million households; it’s a gateway to our ever-increasing digital society. Without it, millions of Americans will be unable to see doctors, visit with family, shop, and engage with their communities online. At the same time, the ACP plays a significant role in future infrastructure deployment. Allowing the ACP to end all but ensures that millions will be disconnected and future funding dollars won’t go the distance to close the digital divide.

Ryan Johnston is senior policy counsel at Next Century Cities. He is responsible for NCC’s federal policy portfolio, building and maintaining relationships with Federal Commissions Commission officials, members of Congress and staff, and public interest allies. Working with various federal agencies, Ryan submits filings on behalf of NCC members on technology and telecommunications related issues that impact the digital divide such as broadband data mapping, benchmark speeds, spectrum policy, content moderation, privacy, and others. This piece is exclusive to Broadband Breakfast.

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