At this morning's Open Commission Meeting, the FCC approved by a 4-0 vote a Sixth Report and Order increasing the Affordable Connectivity Program (ACP) monthly benefit from $30 to as much as $75 in high-cost areas where the broadband service provider is able to demonstrate a "particularized economic hardship."
As a direct consequence, the date upon which the $14.2 billion appropriated by Congress will run dry, which is expected to arrive at some point next year, likely will come even sooner. As Free State Foundation President Randolph May wrote in an April op-ed, Congress therefore should "extend it, while mending it."
The ACP was created in 2021 by the Infrastructure Investment and Jobs Act (IIJA). It provides up to $100 dollars toward the purchase of a connected device and a monthly subsidy of $30 ($75 on qualifying Tribal lands) to eligible lower-income households. As of May 2023, over 17 million households were participating in the ACP.
Mr. May first wrote about the ACP in an October 2022 Perspectives from FSF Scholars. He concluded that "a fiscally responsible, targeted American Connectivity Program represents the preferred, marketplace-based approach to subsidizing broadband service." He therefore urged Congress to "extend the lifespan of the ACP through legislation that appropriates additional dollars" – and at the same time "revise the program's eligibility requirements to target its limited resources to those most in need."
In "The Affordable Connectivity Program: Time Is of the Essence for Congress to Act," a Perspectives published in March of this year, Mr. May took note of the accelerated predictions regarding when the ACP will run out of money – according to one observer, that could happen as soon as "early next year" – and in response repeated his "call for Congress to act without further delay to extend and revise the ACP."
The action taken by the FCC today, which will increase the monthly subsidy by up to $45 in certain high-cost areas, will place even greater strain on the dwindling, finite pool of money available.
Specifically, and as required by the IIJA, the Sixth Report and Order defines "particularized economic hardship" – that is, where "a provider is unable to cover the costs of maintaining the operation of all or part of its broadband network at the standard discount level in a high-cost area where the provider seeks to offer the high-cost area benefit" – and establishes implementing rules and processes pursuant to which increased subsidies will be made available.
In a June 2023 post to the FSF Blog, I highlighted a letter from a group of eight Republican Senators to President Biden proposing the redirection of unused COVID-19 relief dollars to the ACP "while we explore alternative sustainable funding mechanisms and updated parameters." While that might serve as a short-term fix, ultimately Congress must take direct action to ensure that the ACP continues on an ongoing, fiscally responsible basis.
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