A Popular FCC Benefit That Helps Millions Afford Internet Is Set to Expire by May

The FCC said this week that it will begin taking steps to wind down the Affordable Connectivity Program, a federal subsidy that chips in $30 to $75 monthly toward home internet for low-income households. 

For the 22.5 million households currently enrolled in the ACP, the end of the program could leave a big hole in their monthly budget. The burden will be especially felt in parts of the country where the poverty rate trends higher, and among Black and Hispanic families.

“Many of us can't quite understand the impact that $30 makes for a family who's working full time and still isn't making ends meet,” FCC spokesperson Paloma Perez told CNET. “$30 is a choice between a tank of gas, school supplies, medication or your internet bill. And that's a choice that we've helped a lot of families avoid for a long time.”

The $14.2 billion originally allocated to the program is almost depleted, and the FCC said it “expects funding to last through April 2024, running out completely in May."

FCC Chairwoman Jessica Rosenworcel on Monday outlined to Congress the steps that would be necessary to start winding down the ACP. A bipartisan group of legislators introduced a bill on Wednesday that would provide $7 billion to extend the program, but its prospects for success are unclear. Without any new enrollments, an additional $7 billion would carry the ACP through March 2025. 

Households can qualify for the ACP if their income is at or below 200% of the federal poverty guidelines -- $60,000 for a family of four -- or if they participate in federal programs like the National School Lunch Program, the Supplemental Nutrition Assistance Program or Medicaid.

Around half of all eligible households are currently enrolled in the program -- 22.2 million households receive a $30 monthly benefit, while 318,000 households living on tribal lands get $75. That’s around half of all eligible households nationwide. About 19% of all broadband subscriptions in the US use the subsidy, with Louisiana, Kentucky and Ohio enrolling at the highest rates. Enrollment has also been higher than expected in areas with larger Black and Hispanic populations, according to an analysis of ACP data by Benton Institute senior fellow John B. Horrigan. 

How the FCC will begin winding down the program

Rosenworcel’s letter to Congress outlines three steps that the FCC will begin taking in the short term to prepare for the ACP’s expiration. First, the FCC will provide guidance to internet providers on how they can notify subscribers about the projected end of the ACP and how that will affect their internet bill. This is expected to happen within the next week. 

“We want to make sure that we avoid bill shock,” Perez told us. “Folks who qualify on this are some of the most vulnerable populations. We want to make sure they don't get stuck with a bill that they can't afford.” Internet providers won’t be able to simply transfer customers to a new plan. The FCC stated that they must obtain “affirmative opt-in, either orally or in writing, to continue providing the household broadband service after the end of the Affordable Connectivity Program.”

After that, the FCC will announce a date for ending enrollment for new subscribers. In 2023, nearly 600,000 new households enrolled in the program each month. The final step will be to determine an official end date where subscribers will stop receiving benefits. 

How likely is an ACP extension?

Although the program enjoys broad support from the public -- a recent poll from a conservative think tank shows 79% of voters support continuing the ACP -- analysts are pessimistic about an extension passing. 

“It's more likely than not to go away,” Blair Levin, a former FCC chief of staff and telecom industry analyst at New Street Research, told CNET. “And it has nothing to do with ACP. It has to do with the politics of the budget.”

In a December letter addressed to the FCC, four Republican lawmakers argued that the ACP isn’t actually helping connect people who wouldn’t have internet otherwise. 

“House Republicans attempting to demonstrate that they are cutting back on government spending, makes re-funding the ACP very difficult,” Levin wrote in a research note a day before the Affordable Connectivity Program Extension Act was introduced.

But proponents of the program argue that price is actually the most significant barrier to connecting people to internet. 

“The digital divide is fundamentally tied to inequality,” Christopher Ali, professor of telecommunications at Penn State University, told CNET. “We often think that it's an infrastructure issue, which is the case in rural and remote and Indigenous communities, but the reason most people don't have internet is price.”

A 2021 Pew Research Center survey found that 20% of people who don’t have a home internet subscription said the main reason was that it is “too expensive” -- the highest of any answer and well above the 9% who said service isn’t available. Another study found that “for every American without broadband service available, up to twice as many have service available but still don’t subscribe.”

Levin added that there's some hope for the program given its popular support -- particularly when public notices start going out to enrollees that the ACP is ending. Funds are spent almost equally in Democratic and Republican House districts. 

“If lawmakers want to have a discussion with us about are there changes to the program? Are there aspects of it that we'd be willing to reexamine in order to extend it? I think we're ready to have those conversations,” Perez told us.

Other ways to save money on internet

While the Affordable Connectivity Program is by far the most significant resource out there for low-income households, there are a few other avenues available to help reduce your internet bill:

• State resources: Perez said some states also offer internet assistance programs. Maryland, for instance, offers a $15 monthly discount for low-income households in addition to the ACP. 
• Low-income programs from internet providers: Before the ACP was created, the main option for discounted internet was through providers themselves, and ISPs like AT&T, Cox, Optimum, Spectrum and Xfinity still offer those plans. The easiest way to see which providers are available in your area is to enter your address on the FCC’s broadband map.
• Lifeline: Like the ACP, Lifeline is a federal program for low-income households. It provides a $9.25 monthly discount for phone, internet, or bundled services. It’s been permanently funded since 1984, but the qualifications are a little more stringent. Household income must be at or below 135% of federal poverty guidelines or participate in SNAP, Medicaid or other federal programs.
• Avoid equipment rental fees: It generally costs between $10 and $15 a month to rent a modem and router from an ISP, but costs can occasionally rise north of $20. If you can afford a higher upfront investment, purchasing your own equipment can save you a lot of money in the long run, especially if you buy used or refurbished equipment. You can typically get all the equipment you need for as little as $100, but you’ll need to make sure your modem is compatible with your internet provider.