The Value of $7 Billion: The Affordable Connectivity Program and the Future of Access and Adoption

The Affordable Connectivity Program (ACP) provides eligible customers a discount of up to $30 per month for broadband services. The benefits of the ACP—especially compared to other programs—is  that it is tech-neutral; it does not limit users to a specific means of connection and gives customers choices over what service they want. It’s important to highlight that last year’s Infrastructure Investment and Jobs Act (H.R. 3684) included funding for the Broadband Equity, Access, and Deployment Program. This $42.5 billion investment is designed to be the quintessential infrastructure program to connect those on the wrong side of the digital divide. This program is imperiled if there are no customers on the other side of those connections purchasing services. The ACP is a mechanism to ensure customers can afford to remain connected.

Last week, a bipartisan, bicameral delegation introduced legislation to extend the ACP by allocating an additional $7 billion that should see the program continue through the end of the year. Absent congressional intervention, the program is due to run out of funding as early as April this year. Federal Communications Commission Chairwoman (FCC) Jessica Rosenworcel has warned congressional leaders they will begin winding down the program and stopping new enrollment on Feb. 7, 2024 if there is no additional funding. With the end date approaching and 23 million customers waiting with baited breath, the question remains what is the future of the ACP?

Even if Congress were to extend the ACP another year, it would just punt the question of how to keep the program running long-term. The best chance of preserving the ACP as a permanent program is to roll it into a future Universal Service Fund (USF) Program. As R Street highlighted in comments submitted to the Senate USF Working Group, unlike the ACP which depends on congressional appropriations, the USF Program is funded by a tax on interstate end-user revenues. While this fee faces its own challenges and scrutiny, Congress is in a perfect position to make reforms to the USF Program that reflects the modern connected landscape and maintains a light-touch program that gives customers flexibility to choose services that suit their needs, without additional burdens to providers.

However, some have raised concerns about the ACP’s impact on the marketplace. But evidence proves the opposite; according to a recent study, the most popular broadband speed tier plan prices dropped by 18.1 percent. There has also been scrutiny about the eligibility criteria and size of the subsidy—which can be addressed as part of an extension or renewal. Congress can and should at the very least look to study the ACP and collect more data about how to ensure the ACP is narrowly tailored to target customers who depend on the program to afford broadband. Concerns about the size and scope of the program should spark discussion, hearings, and negotiations, not a death knell for a program that could be the “one broadband program to rule them all.” Conservatives have clamored for a tech-neutral voucher program to address broadband affordability. The ACP is the best chance for that.

Republicans, such as Sen. J.D. Vance (R-Ohio), Sen. Kevin Cramer (R-N.D.), and Rep. Brian Fitzpatrick (R-Pa.), recognize the benefits of this program and are the conservative champions to ensure that federal broadband dollars are spent in the most efficient, cost-effective way going forward. This bipartisan bill is a good first step. As Congress looks to reauthorize and extend the ACP, it is important they consider ways to strengthen the program and create transparency.

The ACP, like many federal programs, has been gamed, and unfortunately, there have been issues involving waste, fraud, and abuse due to a lack of significant oversight. Fortunately however, instances of abuse of the program have been quickly remedied by the FCC’s Office of Inspector General. For example, in September last year, the Inspector General completed an investigation that led to a provider voluntarily repaying $49.4 million that was improperly used by providers. With Congress at the helm of the ACP, they can continue to make tweaks and meaningful changes to improve the program to ensure that federal dollars are connecting Americans that depend on the program to remain connected.

Congress has an incredible opportunity to modernize the outdated and bureaucratic bloat of government broadband spending. There are currently over 133 funding programs across 15 agencies that fund broadband. Conservatives are constantly looking for ways to cut spending and ensure that tax dollars are being spent meaningfully. The ACP could be the diamond-in-the-rough program. It is tech-neutral, vouchered, and efficient. Republicans should prioritize and maintain the broadband program we need to ensure Americans can connect and stay connected to the digital economy.