ISPs Phase Out Federal Internet Subsidy for Low-Income Households

Internet Service Providers Shift From Affordable Connectivity Program

Internet service providers (ISPs) including Charter, Verizon, and Comcast are transitioning customers away from the Affordable Connectivity Program (ACP), an expired federal internet subsidy that assisted low-income households in paying for broadband. This shift is occurring as ISPs report earnings and engage in private discussions about the program's future.

The ACP, launched in December 2021, offered a discount of up to $30 per month for qualifying households and $75 for those on tribal lands.

The program served approximately 23 million households, two-thirds of whom lacked consistent or any internet access before enrolling.

The ACP officially ended in June after Congress failed to renew its funding.

Impact of ACP Expiration on Internet Service Providers

While some ISPs supported renewing the ACP before its expiration, they have since been hesitant to revive the program due to uncertainty surrounding funding sources. This uncertainty is partly fueled by the upcoming November elections, which could change the political landscape and influence future funding decisions.

Although some ISPs experienced customer losses following the ACP's end, the overall impact on their businesses has been less severe than initially feared.

ISPs have focused on transitioning customers to other affordable options, minimizing the financial impact of the expired subsidy.

Efforts to Revive the ACP

Despite the ISPs' shifting priorities, some Democratic and Republican lawmakers are pushing to reinstate the ACP, albeit temporarily. Bills have been introduced in both the Senate and House, proposing a temporary extension of the program with a funding allocation of between $6 billion and $7 billion.

The ACP was originally funded as the Emergency Broadband Benefit program during the pandemic, when reliable internet access became crucial for remote work and schooling.

While the ACP garnered bipartisan support in the past, its future remains uncertain due to the upcoming election and the potential change in party control in Congress.

Industry Disenchantment and Future Alternatives

The ISPs' waning interest in reviving the ACP stems from a belief that the subsidy's benefits were too broad and not targeted enough. Some argue that a new subsidy program focused on digital literacy and targeted assistance might be a better approach after the election.

Some ISPs are advocating for permanent solutions like strengthening the Universal Service Fund, a mechanism for providing affordable telecommunications services.

However, the Universal Service Fund has faced legal challenges, and its future is uncertain.

Impact on ISP Businesses

The ACP's expiration has had a significant impact on some businesses, particularly those that invested heavily in enrolling customers in the program.

Companies like Charter, Comcast, and Verizon have experienced customer losses as a result of the ACP's end.

While ISPs have attempted to mitigate these losses by offering new plans and discounts, the full financial impact of the ACP's expiration is still unfolding.

Conclusion: Uncertain Future for the ACP

The Affordable Connectivity Program's future hangs in the balance, with uncertain support from both ISPs and lawmakers. Despite efforts to revive the program, its temporary nature and the political landscape make its reinstatement challenging.

The ACP's expiration underscores the ongoing debate surrounding affordable internet access and the role of government subsidies in ensuring digital equity.